to Indonesian
that to implement the provisions of Article 9 and Article 12 paragraph (6) of Law Number 39 of 2009 concerning the Special Economic Zones, it is necessary to stipulate Government Regulations concerning Special Economic Zones Management;
1. Article 5 paragraph (2) Constitution of the Republic of Indonesia of 1945;
2. Law Number 39 of 2009 concerning the Special Economic Zones (Statute Book of the Republic of Indonesia Number 147 of 2009, Supplement to Statute Book of the Republic of Indonesia Number 5066);
GOVERNMENT REGULATION CONCERNING SPECIAL ECONOMIC ZONES MANAGEMENT
In this Government Regulation what is referred as:
1. Special Economic Zones hereinafter called as KEK is an area with certain boundaries in the jurisdiction of the Republic of Indonesia set to perform the functions of the economic affair and obtain certain facilities.
2. National Council is a council established at the national level to operate KEK.
3. Zone Council is a council established at the provincial level to assist the National Council in the management of KEK.
4. The central government hereinafter called the Government is the President of the Republic of Indonesia, which holds the power of the government of the Republic of Indonesia as intended in Constitution of the Republic of Indonesia of 1945.
5. Province Government is the governor and the regional official as element of provincial government.
6. Regency/municipality government is the regent/mayor and the regional official as element of regency/municipality government.
7. Administrator is part of the Zone Council formed for each KEK to assist Zone Council in the management of KEK.
8. Business Entity is a legal company in the form of State Owned Business Entity, Regional Owned Business Entity, Cooperative, private, and joint venture to carry on KEK business.
9. Business actor is company in the form of legal entity, not a legal entity or individual businesses who does business in the KEK.
10. One Stop Integrated Services hereinafter called as PTSP is the activities to implement licensing, facilitation, and facility that get delegation of authority from the agency or institution that has authority on the licensing, facilitation, and facility that the management process starts from the stage of application to the stage of issuance of documents done in one place.
11. Delegation of Authority is the delivery duties, rights, obligations, and responsibilities on the licensing, facilitation, and facility, including the signing on behalf of the authority giver, by the minister/head of non ministerial government agency, governor or regent/mayor to the Administrator established with a clear description, in accordance with regulation.
KEK Management includes:
(1) KEK consists of one or several zones.
(2) Zone as intended in paragraph (1) may consist of:
(3) Export processing zone as intended in paragraph (2) a, is designed for logistics and industrial activities that production destined for export purpose.
(4) Logistics zone as intended in paragraph (2) b is designed for activities of storage, assembly, sorting, packing, distribution, repair, and recondition of machinery from the country and from abroad
(5) Industrial Zone as intended in paragraph (2) c is designed for industrial activities that process raw materials, intermediate goods, and/or finished goods, as well as agro industries with higher value for its use, including the industrial engineering and construction activities that products for export and/or for domestic.
(6) Technology Development Zone as intended in paragraph (2) d is designed for activities of research and technology, engineering and construction, applied technology, software development and services in the field of information technology.
(7) Tourism Zone as intended in paragraph (2) e is designed for tourism activities in support of the entertainment and recreation, meetings, exhibitions, and related activities.
(8) Energy Zone as intended in paragraph (2) f is designed for activities of research and development in the field of energy and the production of alternative energy, renewable energy, and primary energy.
(9) Other Economic Zone as intended in paragraph (2) g is designed for other activities than as intended in paragraph (3) up to paragraph (8) that is determined by the National Council.
(1) The establishment of KEK proposed to the National Council by:
(2) Proposal for establishment of KEK as intended in paragraph (1) shall be in written according to the format determined by the National Council and signed by:
(3) Business Entity as intended in paragraph (1) a must be established in Indonesia.
(4) The proposed location for the establishment of KEK by the Business Entity as intended in paragraph (1) a is:
(5) The proposed location for the establishment of KEK by regency/municipality government as intended in paragraph (1) b is in an area of a regency/municipality.
(6) The proposed location for the establishment of KEK by the province government as intended in paragraph (1) c is across areas of regencies/municipalities.
(1) In some cases, the Government may establish an area as KEK.
(2) Determination of KEK as intended in paragraph (1) conducted based on the recommendation of the ministry/non ministerial government agency.
Location of the proposed KEK could be:
The proposed KEK location as intended in Article 6 must meet the following criteria:
Regional Spatial Plan as intended in Article 7 paragraph a, covers cultivation area designed in accordance with local regulation of regency/municipality spatial plan that can be used for the proposed KEK activities.
Support from province government and/or regency/municipality government as intended in Article 7 paragraph b of at least includes:
(1) The position is close to the international trade route as intended in Article 7 paragraph c is a location that has access to the ports or airports or other places that serve international trade activities.
(2) The position is close to the international shipping route in Indonesia as intended in Article 7 paragraph c is a location that has access to:
(3) The position is located in area of potential primary resources as intended in Article 7 paragraph c is a location near with the source of raw materials of processing industry developed.
(1) Clear boundaries as intended in Article 7 paragraph d include natural boundaries or artificial boundaries.
(2) In the boundary of KEK should be determined exit or entry gates of good for the purpose of goods monitoring that still contained customs obligations.
(3) Determination of the exit or entry gates of goods as intended in paragraph (2) shall in coordination with the local customs office.
(1) In case of the establishment of KEK is proposed by the Business Entity as intended in Article 4 paragraph (1) a, the proposal is submitted by province government after obtaining the approval of regency/municipality government.
(2) Proposal for establishment of KEK as intended in paragraph (1) is accompanied with a documents of:
(1) For the location of the proposed KEK in the a area of regency/municipality, business entity file application for approval as intended in Article 12 paragraph (1) to the regent/mayor accompanied with:
(2) Based on the application for approval as intended in paragraph (1) regency/municipality government verifies and evaluates the proposal documents within a maximum period of 20 (twenty) working days since received complete proposal documents.
(3) In case of regency/municipality government rejects the application submitted by the Business Entity, the rejection shall be submitted in writing to the Business Entity with the reason.
(4) In case of regency/municipality government approves the application submitted by the Business Entity, regency/municipality government forward the Business Entity proposal to the province government by including of regency/municipality government commitment on the granting incentive plan in the form of exemption or reduction of regional tax and regional retribution as well as facilitation.
If the regency/municipality government rejects the Business Entity application as intended in Article 13 paragraph (3), with the reason not yet/do not fulfill the required proposal documents, the Business Entity may resubmits application to regency/municipality government after the fulfillment of all required proposal documents.
(1) Province Government verifies and evaluates the completeness of submitted proposal documents for establishing of KEK by regency/municipality government within a period of 20 (twenty) working days.
(2) In case of the proposal as intended in paragraph (1) has met the requirements as intended in Article 12 paragraph (2), province government sends the proposal for establishment of KEK to the National Council with entire proposal documents for establishment of KEK.
(1) For the KEK is located across areas of regencies/municipalities, business entity shall apply application to the governor accompanied by:
(2) Based on the application as intended in paragraph (1) province government coordinates the proposal for the establishment of KEK with regencies/municipalities governments whose territory proposed to be part of the KEK location.
(3) Province Government submits proposal of business entity to regencies/municipalities governments whose territory would become part of the KEK location for approval.
(1) Based on the proposal as intended in Article 16 paragraph (3) regencies/municipalities governments verify and evaluate the documents of the KEK establishment within a period of 20 (twenty) working days since received complete proposal documents for approval or rejection.
(2) In case of regencies/municipalities governments rejected the proposal of the establishment of KEK as intended in paragraph (1), the rejection shall be submitted in writing to the province government with the reason.
(3) In case of regencies/municipalities governments approve the establishment of KEK as intended in paragraph (1), regencies/municipalities governments submit approval to the province government.
(4) In approval as intended in paragraph (3), regencies/municipalities governments include regencies/municipalities governments’ commitment on the granting incentive in the form of exemption or reduction of regional tax and regional retribution as well as facilitation.
(1) Province Government verifies and evaluates of the completeness of submitted proposal documents for establishing of KEK that have been approved by each regency/municipality government within a period of 20 (twenty) working days.
(2) If the proposal as intended in paragraph (1) has met the requirements as intended in Article 12 paragraph (2), province government sends the proposal for the establishment of KEK to the National Council with all proposal documents for the establishment of KEK.
If there is a rejection from one of the regency/municipality government as intended in Article 17 paragraph (2), province government return proposal for the establishment of KEK to the Business Entity no later than 10 (ten) working days after received the rejection from the regency/municipality government.
(1) In case of the establishment of KEK proposed by regency/municipality government as intended in Article 4 paragraph (1) b, the proposal is submitted through the province government.
(2) Proposal for establishment of KEK as intended in paragraph (1) is equipped with a documents of:
(1) Regency/municipality Government submits the proposal to establishment of KEK to the National Council through the province government accompanied with documents as intended in Article 20 paragraph (2).
(2) Province government verifies and evaluates the completeness of submitted proposal documents for establishing of KEK by regency/municipality government within a period of 20 (twenty) working days.
(3) In case of the proposal as intended in paragraph (2) has met the requirements as intended in Article 20 paragraph (2), province government sends the proposal for the establishment of KEK to the National Council accompanied with all proposal documents for the establishment of KEK.
(1) In case of the establishment of KEK proposed by the province government as intended in Article 4 paragraph (1) c, proposals is submitted after obtain approval from regency/municipality government.
(2) Proposal for establishment of KEK as intended in paragraph (1) is equipped with documents of:
To obtain approval from regency/municipality government as intended in Article 22 paragraph (1), province government shall submit plan for the establishment of KEK across the areas of regencies/municipalities to the regencies/municipalities governments whose territory would become part of the KEK location.
(1) Based on the submission of the plan as intended in Article 23, regencies/municipalities governments verify and evaluate the documents of the proposal for establishment of KEK within a period of 20 (twenty) working days since received complete proposal documents for approval or rejection.
(2) In case of regency/municipality government rejects the plan of proposal for the establishment of KEK as intended in paragraph (1), the rejection shall be submitted in writing to the province government with the reason.
(3) In case of regency/municipality government approves the plan of the proposal for establishment of KEK as intended in paragraph (1), regency/municipality government submits approval to province government.
(4) In the approval as intended in paragraph (3), regency/municipality government includes regency/municipality government commitment on the plan for granting incentive in the form of exemption or reduction of regional tax and regional retribution as well as facilitation.
Based on the approval of each regency/municipality government as intended in Article 24 paragraph (3), province government sends proposal for the establishment of the KEK to National Council with all documents as intended in Article 22 paragraph (2).
(1) Ministry/non ministerial government agency as intended in Article 5 paragraph (2) sends proposal for establishment of KEK to the National Council in writing in accordance with the format determined by the National Council and signed by the minister/head of non ministerial government agency.
(2) Proposal for establishment of KEK as intended in paragraph (1) accompanied by documents such as:
(3) Proposal of ministry/non ministerial government agency as intended in paragraph (1) shall be submitted to the National Council after consultation with the province government and regency/municipality government.
(1) National Council studies the proposal for establishment of KEK as intended in Article 15 paragraph (2), Article 18 paragraph (2), Article 21 paragraph (3), Article 25, and Article 26 paragraph (3) within a period of 45 (forty five) working days since received complete proposal documents.
(2) Study as intended in paragraph (1) made to:
(1) Based on the results of the study as intended in Article 27, the National Council decides to approve or reject the proposal for establishment of KEK.
(2) The decision as intended in paragraph (1) shall in National Council meeting.
(3) In case of the National Council approves the establishment of KEK, the National Council recommends the establishment of KEK to the President along with the Draft of Government Regulation concerning the establishment of a location as a KEK to be stipulated in accordance with the provisions of regulation.
(4) In case of the National Council rejects the proposal of the establishment of KEK, the rejection shall be submitted in writing to the applicant accompanied with the reason.
KEK already determined should be ready to operate at least 3 (three) years since the date of stipulation.
KEK development includes activities of:
KEK development financed by:
(1) Land acquisition for KEK locations by:
(2) In case of land acquisition for KEK location conducted by the Business Entity in the form of cooperative or private company, the business entity may be given land right in the form building utilization right.
(3) In case of land acquisition for KEK location conducted by the State Owned Business Entity, Regional Owned Business Entity, government province, regency/municipality government, or ministry/non ministerial government agency, the State Owned Business Entity, Regional Owned Business Entity, province government, regency/municipality government, or ministry/non ministerial government agency may be given land right in the form of utilization right or management rights.
Based on KEK determination, province government, regency/municipality government, or ministry/non ministerial government agency determines a Business Entity to undertake the KEK Development.
(1) Determination of business entity as intended in Article 33 conducted based on open and transparent principles.
(2) In case of determined KEK was proposed by Business Entity, the Business Entity that proposed shall be determined as Business Entity to develop the KEK by:
(3) Business Entity as intended in paragraph (2) shall have responsible for financing the KEK development.
(4) In case of determined KEK was proposed by regency/municipality government, determination of Business Entity to develop KEK shall be done by regency/municipality government in accordance with:
(5) In case of determined KED was proposed by province government, the determination of Business Entity to develop KEK conducted by province government in accordance with:
(6) In case of determined KEK was proposed by ministry/non ministerial government agency, the determination of Business Entity to develop KEK conducted by ministry/non ministerial government agency in accordance with:
(1) Business Entity that is determined as intended in Article 33 to implement KEK development based on KEK development agreement signed by Business Entity with the regency/municipality government, province government, or ministry/non ministerial government agency in accordance with their authority.
(2) Agreement as intended in paragraph (1) shall at least contains:
(1) Business Entity that implements the development of KEK shall submit progress report on development implementation to province government, regency/municipality government, or ministry/non ministerial government agency every 12 (twelve) months.
(2) Business Entity that implements the KEK development shall submit status report on the KEK readiness to province government, regency/municipality government, or ministry/non ministerial government agency to be declared ready to be operated by the National Council on the period of maximum 36 (thirty six) months since KEK determination.
(3) Province Government, regency/municipality government, or ministry/non ministerial government agency as intended in paragraphs (1) and (2) forward a progress report on the KEK development implementation and status report on KEK readiness to the National Council through the Zone Council.
(1) National Council conducts an evaluation on the KEK development implementation every year.
(2) The results of evaluation as intended in paragraph (1) shall be submitted to the proposal maker for further action.
In case after 3 (three) years from the KEK was determined, KEK is not ready to operate yet, the National Council:
(1) In case of after extension time as intended in Article 38 paragraph b, KEK is not ready to operate due to force majeure or not due to negligence, Zone Council submit consideration for an extension of time to the National Council no later than 30 (thirty) working days from the expiry of the extension.
(2) Consideration as intended in paragraph (1) based on the results of consultation with relevant government agencies, local government, and the experts according to their field.
(1) National Council conduct evaluations on the consideration given by the Zone Council as intended in Article 39 paragraph (1) within a period of 30 (thirty) working days.
(2) Evaluation as intended in paragraph (1) conducted on the feasibility of the KEK management.
(3) Based on the evaluations, the National Council may:
(3) The extension period as intended in paragraph (3) shall be granted for a maximum of 5 (five) years.
In case of the provisions as intended in Article 38 and Article 40 paragraph (3) a has been done, KEK does not operated yet, National Council proposed revocation of KEK determination to the President along with the Draft of Government Regulation concerning Revocation of Government Regulation concerning determination of a location as a KEK.
KEK management conducted by:
(1) Administrator as intended in Article 42 paragraph a is established by the Zone Council.
(2) The Administrator shall:
(3) The granting license as intended in paragraph (2) a done via PTSP in accordance with the provisions of regulation in capital investment.
(4) In conducting supervision and control of the management of KEK as intended in paragraph (2) b, the Administrator has authority to give:
(5) Report of the KEK operational as intended in paragraph (2) c is submitted periodically every 6 (six) months.
(6) Incidental report of the KEK operational in case of the National Council or Zone Council requires the KEK operational development or Administrator assess the condition should be reported immediately.
(7) Administrator as intended in paragraph (1) must be established no later than the KEK is declared ready for operation.
(1) PTSP at KEK held by the Administrator.
(2) In conducting PTSP at KEK as intended in paragraph (1):
(3) Delegation of Authority as intended in paragraph (2)a is determined through regulation of Minister/Head of the Ministry of Non-Government Agency, Governor, or Regent/Mayor.
(4) The Administrator provides recommendation to the minister/head of non ministerial government agency, governor, or regent/mayor to obtain licenses, facilitations, and facilities that based on regulation are not delegated.
(5) Appointment of Connector as intended in paragraph (2) b is determined by minister/head of non ministerial government agency, governor, or regent/mayor.
(1) Minister/head of non ministerial government agency, governor, or regent/mayor who has the authority of permits, facilitations, and facilities shall determine the types of permits, facilitations, and facilities for management of PTSP at KEK.
(2) The procedure for permits, facilitations, and facilities for each kind as intended in paragraph (1) is governed by the minister/head of non ministerial government agency, governor, or regent/mayor who has the authority in the form of technical guideline that includes:
(3) The procedure for permits, facilitations, and facilities as intended in paragraph (2) prioritizing simplification without compromising safety, security, health, and environmental protection factors of investment activities, refer to the standards are determined by the authorized agencies/institutions.
(4) In determining the type and procedures of permits, facilitations, and facilities as intended in paragraphs (1) and (2), minister/head of non ministerial government agency, governor, or regent/mayor shall coordinate with related agencies/institutions.
Management and development of PTSP at KEK shall be conducted based on the provisions of regulations in capital investment field.
(1) KEK management Business Entity in charge of organizing KEK business activities.
(2) KEK management Business Entity as intended in paragraph (1) is in the form of:
(3) KEK management Business Entity as intended in paragraph (1) shall be determined when the KEK development period and at least before KEK declared ready to be operated by the National Council.
(1) In case of determined KEK is proposed by Business Entity, the proposal maker Business Entity is determined as Business Entity management by:
(2) Business Entity as intended in paragraph (1) has responsible for financing the management of KEK.
(3) In case of determined KEK is proposed by regency/municipality government, determination of Business Entity management is conducted by the regency/municipality government in accordance with:
(4) In case of determined KEK is proposed by province government, the establishment of Business Entity management is conducted by the province government in accordance with:
(5) In case of determined KEK is proposed by ministry/non ministerial government agencies, establishment of Business Entity management is conducted by ministries/non ministerial government agency in accordance with:
(1) Business Entity has determined as KEK management shall implement KEK management based on KEK management agreement signed by the Business Entity with the regency/municipality government, province government, or ministry/non ministerial government agencies in accordance with their authority.
(2) Agreement as intended in paragraph (1) shall at least contains:
(3) In case of land used as KEK location is owned Business Entity, in addition to contains provisions as intended in paragraph (2), the agreement should also contains provisions on the restrictions on transfer a part or all land of KEK location to another party.
(1) Based on the report of the Administrator as intended in Article 43 paragraph (2) c, Zone Council conducts KEK management evaluation.
(2) The results of evaluation as intended in paragraph (1) shall be submitted to:
Administrator uses the results of evaluation of Zone Council as intended in Article 50 for controlling the KEK management.
(1) Based on the evaluation of Zone Council as intended in Article 50, the National Council conduct an assessment of the KEK management.
(2) Based on the assessment as intended in paragraph (1), the National Council may:
(3) Recommendation of termination KEK management agreement is submitted by the National Council to the Zone Council, if the Business Entity management:
(4) Recommendation for revocation of KEK determination is submitted by the National Council to the President in case of KEK management:
(1) In case of Business Entity management status is revoked, province government, regency/municipality government, or ministry/non ministerial government agency processes determination of new Business Entity management within a period of 30 (thirty) working days after the revocation of Business Entity management.
(2) During the period of 30 (thirty) days working as intended in paragraph (1), temporary KEK management is conducted by province government, regency/municipality government, or ministry/non ministerial government agency until the determination of the new Business Entity management.
(3) The process of appointing the new Business Entity management as intended in paragraph (2) refers to the provisions of Article 48 paragraphs (1), (3), (4), and (5).
(1) Delegation of Authority as intended in Article 44 paragraph (2), shall be made at least 12 (twelve) months from the Administrator was established.
(2) In case of licensing, facilitation, and facility as intended in Article 44 paragraph (2) has been given or delegated to the Head of the Investment Coordinating Board, the head of the provincial work unit in the field of capital investment, or head of the regency/municipality working unit in the field of capital investment, then:
This Government Regulation shall come into force on the date of promulgation.
For public cognizance, this Government Regulation shall be promulgated by placing it in the State Gazette of the Republic of Indonesia.
Stipulated in Jakarta
on January 5, 2011
THE PRESIDENT OF THE REPUBLIC OF INDONESIA
signed,
DR. H. SUSILO BAMBANG YUDHOYONO
Promulgated in Jakarta
on January 5, 2011
MINISTER OF LAW AND HUMAN RIGHTS OF REPUBLIC OF INDONESIA
signed,
PATRIALIS AKBAR
STATUTE BOOK OF THE REPUBLIC OF INDONESIA NUMBER 2 OF 2011