to Indonesian
To turn Indonesian into a fair and prosperous society based on Pancasila and the Constitution of the Republic of Indonesia of 1945, the national economic development must be carried out based on economic democracy embracing the principles of togetherness, efficiency with justice, sustainability, environmental friendliness, independence, and balancing economic progress with the integrated national economy.
In accordance with the mandate of Decree People's Consultative Assembly Decree of the Republic of Indonesia Number XVI/MPR/1998 concerning Economic Policies in respect to economic democracy, Indonesia will require economic policy alignments by giving more opportunities and support for micro, small and medium enterprises (UMKM), as well as cooperatives while simultaneously giving benefits to the domestic manufacturing sector. In this regard, the Special Economic Zones (KEK) will accommodate UMKM and cooperatives. By doing so, there will be linkages with upstream and downstream synergies with large companies. These companies will act as both Entrepreneurs and supporters of fellow Entrepreneurs.
In the framework to accelerate the national economic development achievement, it is necessary increasing of investment through preparation of zones that has geo-political and geo-strategical advantages. These zones will be prepared in such a way to maximize their manufacturing, export, import activities as well as other high value economic activities. KEK is aimed at accelerating regional development and as a breakthrough model for area development to boost their economic growth, among others: manufacturing, tourism and trade sectors so that they can provide employment.
Article 31 paragraph (3) of Law Number 25 of 2007 concerning Investment provides that the provisions on the Special Economic Zones shall be regulated by under the Laws. These provisions shall serve as the legal basis for the need to set separate policies concerning KEK under a Law.
KEK provisions in this Law will include regulating the roles, forms, and criteria for KEK, establishment of KEK, funding for the infrastructure, institution, flow of goods, quarantine and foreign exchange as well as facilities and incentives.
KEK is a zone with certain boundaries within the territories of the Unitary State of the Republic of Indonesia, and has been designated to organize economic function and enjoy certain facilities.
KEK plays the role to run and develop businesses in the field of trade, services, manufacturing, mining and energy, transport, maritime and fisheries, post and telecommunication, tourism and other fields. Accordingly, KEK is made up of one or r several zones, among others export processing zone, logistics, manufacturing, technology development, tourism, and energy. Their activities may be turned into export and domestic activities.
The criteria that must be met for an area to be designated as KEK must comply with the Regional Spatial or Zoning Plan, will not potentially disturb the conservation zones, there is support from the provincial/district/city government, situated in a strategic location or owns the prime resource potentials for marine, fishery, plantation, mining, and tourism. In addition, it has clear boundaries, namely natural and man-made.
To organize KEK, the government will set up KEK organizing institutions comprising the National Council at the central level and the Zone Councils at the provincial level. Further, the Zone Council will set up KEK Administrator in each KEK responsible for providing services, supervision, monitoring, and control of KEK operations. The business activities taking place in KEK will be run by Business Entities and Entrepreneurs.
The facilities offered in KEK are aimed at improving competitiveness so that it will become more attractive to investors. These facilities will include fiscal facilities, namely taxation, customs and excise, local taxes and regional retributions, and non-fiscal facilities consisting of, land facilities, licensing, immigration, investment, and manpower. Other facilities and incentives which may be given to a zone within KEK will be arranged by the competent institutions in compliance to the provisions of laws and regulations.
In terms of supervision, the provisions on prohibition will remain in place in KEK, as well as other regions in Indonesia. However, the provisions concerning restrictions will enjoy ease of the systems and procedures set by the Government, namely focus on the supervision against possible abuse or turning KEK into a zone to commit economic offenses.
The enactment of this Law is expected to provide uniform regulation on special economic zones that exist in Indonesia, and give the opportunities of growth for Special Trade Zones and Free Ports under by Law Number 36 of 2000 concerning the Determination of Government Regulation in Lieu of Law Number 1 of 2000 concerning Free Trade Zones and Free Ports becomes Law (Statute Book of the Republic of Indonesia Number 251 of 2000, Supplement to Statute Book of the Republic of Indonesia Number 4053) as amended by Law Number 44 of 2007 concerning the Stipulation of Government Regulation in Lieu of Law Number 1 of 2007 concerning Amendment to Law Number 36 of 2000 concerning Stipulation of Government Regulation in Lieu of Law Number 1 of 2000 concerning Free Trade Zones and Free Ports become Law (Statute Book of the Republic of Indonesia Number 130 of 2007, Supplement to Statute Book of the Republic of Indonesia Number 4775) to be proposed into KEK, within or after the expiry of the period already set. By the enactment of this Law, there will not be any more designation of free trade zones and free ports.
Self-explanatory.
What is meant by "geo-economics" is the combination of economic and geographic factors in international trade.
What is meant by "geo-strategy" is the combination of geo-political factors (impact of geo-political, economic, and demographic factors in terms of foreign policies of a country) and the strategies which assign certain roles to a geographic zone.
What is meant by "industry activities" are economic activities which involve processing of direct materials, raw materials, semi-finished goods, and/or finished goods with higher value for their use, design & construction, and industrial engineering.
What is meant by "area preparation" is the efforts to develop a given area in such a way as to meet certain infrastructure and service standards.
Letter a
What is meant by "export processing zone" is an area designated for logistic and manufacturing activities of which its production outputs are for export purposes.
Letter b
What is meant by "logistic zone" is an area designated for storage, assembly, sorting, packing, distribution, repair, and machinery conditioning activities from Indonesia and overseas.
Letter c
What is meant by "manufacturing zone" is an area designated for manufacturing activities which processes raw materials, raw materials, direct materials, semi finished and/or finished goods, aw well with agro-industry higher value for its use, including design & construction and industrial engineering industries of which its production outputs are for export and/or for domestic needs.
Letter d
What is meant by "technological development zone" is an area designated for research & technology activities, design & engineering, applied technology, software development, and information technology services.
Letter e
What is meant by "tourism zones" are the areas designated for tourism activities to support entertainment and recreational activities, meetings & conventions, incentive travel and exhibitions, as well as related activities.
Letter f
What is meant by "energy zone" is an area designated among others for the development of alternative energy, renewable energy, energy-efficient technologies, and processing of primary energy.
Letter g
What is meant by "other economic zones" such as creative industrial zones and sports zones.
What is meant by "support facilities" such as worship facilities, hotels, hospitals, education, and training facilities.
Self-explanatory
Letter a
What is meant by "conservation areas" are the territories designated to mainly function as protection of sustainable environment which comprise natural resources and man-made resources.
Letter b
Self-explanatory.
Letter c
What is meant by "international shipping channel" includes:
Letter d
What is meant by "having clear boundaries" are natural boundary (rivers or seas) or man-made boundaries (fences or walls).
Self-explanatory
Self-explanatory
Letter a
The proposed area of development may comprise a new area or expansion of existing KEK.
Letter b
What is meant by "zoning regulation" is the provisions which govern the requirements of spatial utilization and its controlling regulations, and will be drafted for each designated zone of which its spatial arrangement will be carried out in detail.
Letter c
Self-explanatory.
Letter d
Self-explanatory.
Letter e
Self-explanatory.
Letter f
Self-explanatory.
Self-explanatory.
Self-explanatory.
Self-explanatory.
Government regulations such as arrangement the outer boundaries, zones within KEK, and extent of KEK area.
What is meant by "in certain matters" are matters of national interests that are strategic for the national economic development, and to maintain the balance of the progress of a particular area.
Self-explanatory.
Self-explanatory.
Self-explanatory.
What is meant by "must be ready to operate" is the fulfillment of all infrastructure requirements, human resource, and administration control devices.
Self-explanatory.
Self-explanatory.
Letter a
What is meant by "changes" such as includes the extent of the proposed area, zone, and funding sources.
Letter b
Self-explanatory.
Letter c
What is meant by "steps to resolve" such as the replacement the Business Entities and proposing to cancel the location.
Self-explanatory.
Paragraph(6)
Self-explanatory.
Paragraph(1)
Self-explanatory.
The material and terms and conditions of cooperation include period of cooperation, accountability of the assets belonging to the Government, regional government, and private companies, as well as ownership after the working period expires.
Self-explanatory.
Self-explanatory.
Self-explanatory.
Self-explanatory.
Letter a
Self-explanatory.
Letter b
Self-explanatory.
Letter c
Self-explanatory.
Letter d
Self-explanatory.
Letter e
Self-explanatory.
Letter f
Self-explanatory.
Letter g
What is meant by "strategic issues" such as issues that cannot be resolved by Zone Council or related to national and/or regional policies which affect the management and development of KEK.
Letter h
Self-explanatory.
Letter a
Self-explanatory.
Letter b
Self-explanatory.
Letter c
What is meant by "others" such as the National Council/KEK managers of other countries, Indonesian Chamber of Commerce and Industry, businessmen associations, and non-profit colleges.
Self-explanatory.
Self-explanatory.
Self-explanatory.
Self-explanatory.
Self-explanatory.
Self-explanatory.
Self-explanatory.
Self-explanatory.
Self-explanatory.
Self-explanatory.
What is meant by "to KEK and from KEK" will also include the goods entered to and released from inter-KEKs.
Self-explanatory.
Self-explanatory.
Self-explanatory.
Self-explanatory.
Self-explanatory.
Self-explanatory.
Self-explanatory.
Self-explanatory.
The facilities given among others accelerated services for the measurement, title registration, and issuance of land title certificates.
Self-explanatory.
Self-explanatory.
Under this provision, the provisions on closed business fields as regulated in the provisions of regulations concerning List of Closed and Open Business Fields provided that the prerequisites of Investment will remain in effect in KEK.
Self-explanatory.
What is meant by "directors or commissioners position" is the positions of directors or commissioners whose names are contained in the company notary deed or its amendment.
The use of Indonesian manpower follows the Indonesian principles as an integrated national working market based on working competence.
Employers must give priority to the local workers in case the working competence requirements have been met.
What is meant by "Special Tripartite Cooperation Institution" is the Special Tripartite Cooperation Institution existing in KEK.
Self-explanatory.
Self-explanatory.
Self-explanatory.
Self-explanatory.
In accordance with the principle of freedom of association, the forum must not reduce the independence of trade/labor unions.
Self-explanatory.
Paragraph(1)
What is meant by "collective labor agreement (PKB)" means collective agreement entered into by the trade/labor union or employee union/labor union or several employees union/labor unions already registered at the competent institution responsible for manpower with the employers.
What is meant by "the PKB agrees" means when a company intends to subcontract some of its works to other companies and/or carries out employment in the form of collective labor agreement under certain period employment agreement or indefinite employment agreement, the employers and employees union/labor union will negotiate to agree these issues in the PKB.
Self-explanatory.
Self-explanatory.
Self-explanatory.
Self-explanatory.
Self-explanatory.
SUPPLEMENT TO STATUTE BOOK OF THE REPUBLIC OF INDONESIA NUMBER 5066