Legal Framework
From The Report: Indonesia 2024
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In line with national development and sustainability efforts, changes to Indonesia’s legal framework aim to enable green financing, facilitate land acquisition and management for international companies and outline the formation of public-private partnerships. Carbon and emissions trading, as well as the newly formed Land Bank Agency are set to influence the expansion and diversification of Indonesia’s economy in the coming years.

The update to Indonesia’s Job Creation Law aims to make it easier for businesses to operate by simplifying the process of getting licenses. This new regulation replaces older rules and introduces a system where businesses are categorised by the level of risk they pose. Based on this risk—low, medium, or high—different types of permits are required. Low-risk businesses only need a registration number, while high-risk businesses need government-issued permits and must meet strict standards. This new licensing system is meant to be more efficient and is handled electronically through the Online Single Submission platform. Companies need to provide detailed information about their business, including their activities, product types, number of workers and planned investment.

This chapter contains a viewpoint from Leonard Arpan Aritonang, Partner in LSM Law Firm.

Articles from this Chapter

Overview

Balanced governance: Regulations on green finance, land acquisition and public-private partnerships are poised to unlock new areas of investment
OBG
plus

In line with national development and sustainability efforts, changes to Indonesia’s legal framework aim to enable green financing, facilitate land acquisition and management for international companies, and outline the formation of public-private partnerships (PPPs). Carbon and emissions trading, as well as the newly formed Land Bank Agency (LBA) are set to influence the expansion and diversification of Indonesia’s economy in the coming years. Carbon Trading Carbon trading is a market-based mechanism to reduce greenhouse gas (GHG) emissions through the sale and purchase of carbon units – whereby a carbon unit equates to proof of carbon…

Viewpoint

Raising efficiency: Leonard Arpan Aritonang, Partner, LSM Law Firm, on legislative changes aimed at improving permit processing
OBG
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In the five years leading up to 2022 the government worked to centralise permit applications through an online single submission (OSS) system to make the submission and processing of such applications more efficient. In light of this, Law No. 11 of 2020 on job creation (Job Creation Law) amended Law No. 30 of 2014 on government administration (Government Administration Law). However, in November 2021 the Job Creation Law was declared conditionally unconstitutional because it was created via omnibus…