to Indonesian

Elucidation
of
Government Regulation No. 6/2011 concerning the management of finance
at the Batam free trade zone and free port management board

I. GENERAL

Article 16 paragraph (3) of Law Number 36 of 2000 concerning the Passage of Government Regulation in lieu of Law Number 1 of 2000 concerning Free Trade Zone and Free Port into Law as amended by Law Number 44 of 2007 stipulates that the Batam Free Trade Zone and Free Port Management Board must manage finance according to the law and regulation.

Since the Batam Free Trade Zone and Free Port Management Board is an institute formed by the Batam Free Trade Zone and Free Port Council to manage, develop and construct the Batam Free Trade Zone and Free Port by receiving freedom to manage revenue sources on its own to finance its internal affairs as well as by obtaining revenue sources from the State Revenue and Expenditure Budget, the Regional Revenue and Expenditure Budget and other sources that are not against the law and regulation, the obligation to follow regulation on the management of state finance in general at a government work unit/agency will hamper its tasks.

Article 68 and Article 69 of Law Number 1 of 2004 concerning State Treasury has opened a corridor for government agencies whose main tasks and functions are to provide public services to apply a flexible financial management pattern by putting emphasis on productivity, efficient and effectiveness. This special regulation is made available to government work units carrying out operational tasks to provide public services (such as healthcare, education, estate management and licensing) to distinguish them from the government function as a regulator and policy maker.

Flexibility is given to implement the budget including revenue and expenditure management, cash management, and goods/service procurement. The afore-mentioned agencies called Public Service Boards (BLU) are expected to set a concrete example for the application of performance-based financial management. Yet Government Regulation Number 23 of 2005 on the Pattern of the Management of Public Service Board as an implementation regulation of Law Number 1 of 2004 on State Treasury which deas viith the management of the finance at Public Service Board has not accommodated the characteristics of the Batam Free Trade Zone and Free Port Management Board due to difference of institutional characteristics between the Batam Free Trade Zone and Free Port Management Board and government work units/agencies in general as provided for in Government Regulation Number 23 of 2005 on the Pattern of the Management of Public Service Board.

Therefore, the application of the pattern of the management of finance of the public service board at the Batam Free Trade Zone and Free Port Management Board needs to be provided for in a separate regulation as a supplement to the regulation on the pattern of the management of finance of public service board as provided for in Government Regulation Number 23 of 2005 on the Pattern of the Management of Public Service Board.

One of the goals of this Government Regulation is to harmonize the management of finance at the Batam Free Trade Zone and Free Port Management Board with the law and regulation on the management of state finance in addition to safeguarding state assets, increasing transparency and accountability of the management of state finance, and laying a legal basis for the application of the pattern of the management of finance at the public service board to government agencies that are not seconded to a ministry/non-ministerial government agencies.

II. ARTICLE BY ARTICLE

Article 1

Self-explanatory.

Article 2

Self-explanatory.

Article 3

Paragraph (1)

Self-explanatory.

Paragraph (2)

Flexibility in the management of finance is aimed at encouraging development and construction of estates to anticipate the challenge of global competition.

Paragraph (3)

Self-explanatory.

Paragraph (4)

Self-explanatory.

Article 4

Self-explanatory.

Article 5

The Management Board is a central government agency set up by the Zone Council with the aim of providing public services and managed based on: be authority delegated by the Zone Council.

The Zone Council is responsible for realizing: e authority delegated to the Management Board so that the Zone Council must play a role in supervising service performance and realization of authority delegated.

Article 6

Paragraph (1)

Letter a

Referred to as “minimum service standard” is a technical specification for the yardstick of minimum services provided by BLU to the public. Minimum service standard referred to herein includes its prognosis.

Letter b

Self-explanatory.

Letter c

Self-explanatory.

Letter d

Self-explanatory.

Letter e

Self-explanatory.

Paragraph (2)

Self-explanatory.

Article 7

Self-explanatory.

Article 8

Paragraph (1)

Referred to as “the user of budget/user of goods” is the official holding the authority to use budget/goods owned by the state at the Management Board.

Paragraph (2)

Self-explanatory.

Article 9

Paragraph (1)

Self-explanatory.

Paragraph (2)

Letter a

Self-explanatory.

Letter b

Self-explanatory.

Letter c

Self-explanatory.

Letter d

Self-explanatory.

Letter e

Referred to as “the results of other businesses” include businesses that have nothing to do with the main tasks and functions of the Management Board.

Paragraph (3)

Self-explanatory.

Paragraph (4)

Self-explanatory.

Paragraph (5)

Self-explanatory.

Paragraph (6)

Self-explanatory.

Article 10

Paragraph (1)

Self-explanatory.

Paragraph (2)

RBA makes a performance plan of the Management Board for 1 (one) year including an indication of budget needs and revenue plan.

Paragraph (3)

Self-explanatory.

Paragraph (4)

Self-explanatory.

Paragraph (5)

The Minister of Finance can set special format of RKA-KL for the Management Board within the framework of giving flexibility by constantly paying attention to accountability.

Paragraph (6)

Self-explanatory.

Article 11

Self-explanatory.,

Article 12

Self-explanatory.,

Article 13

Self-explanatory.

Article 14

Paragraph (1)

Budget realization report/operational report is adjusted to the accounting standard.

Paragraph (2)

Self-explanatory.

Paragraph (3)

Referred to as the face of financial statements is the sheet of budget realization report/operational report, balance sheet, and cash flow report.

Paragraph (4)

Budget realization report, cash flow report, notes of financial statement are conveyed every quarter. A complete financial statement is conveyed for a period of one semester and year.

Paragraph (5)

Self-explanatory.

Paragraph (6)

Self-explanatory.

Paragraph (7)

Self-explanatory.

Paragraph (8)

Self-explanatory.

Article 15

Self-explanatory.

Article 16

Self-explanatory.

Article 17

Self-explanatory.

Article 18

Self-explanatory.

Article 19

Self-explanatory.

Supplement to statute book of the Republic of Indonesia No. 5196