TEMPO.CO, Jakarta - The Investment Coordinating Board has canceled 6,541 foreign direct investment (PMA) permits, as the investors never submited their Investment Activity Report (LKPM).

"This is a warning to all investors to submit their LKPM on time," said BKPM deputy chairman Azhar Lubis on Thursday, March 19, 2015.

The requirement to submit an LKPM is stipulated in Law No. 25/2007 on investment and also BKPM Chief Regulation No. 3/2012.

Azhar said the affected companies had previously received warning letters. However, due to a lack of response, their permits were revoked. BKPM has so far finished the administration process to cancel 3,158 PMA permits. "The rest will be completed on March 23 at the latest," Azhar said.

BKPM chairman Franky Sibarani said the lost investment value is US$23 billion. Some factors that make it difficult for investors to realize their business is the slow issuance of local permits as well as difficulties with land acquisition and environmental permits. West Java has the most canceled permits, but East Java loses the largest chunk of investment at US$6,489 billion.

The Mining service sector contributes the biggest loss, which is at US$3,311 billion while South Korea becomes the country with the highest number of canceled investment plans, reaching up to a value of US$4.622 billion.

Azhar said even though these companies were not blacklisted, they can no longer continue their business in Indonesia. "There is no legal basis," he said, adding that all investment companies must submit LKPM for the first quarter of 2015 on April 10 at the latest.

URSULA FLORENE SONIA