Indonesia to Tighten Up Permits for Foreign Contractors

TEMPO.CO, Jakarta - The Ministry of Public Work has revised the Government Regulation Number 5 of 2011 on Permit of Foreign Business Entity.

Head of Construction Regulating Agency of the Ministry of Public Work Hediyanto W Husaini said that the revision of the regulation is still being discussed at the Secretary General of the Ministry.

"We will tighten up the permit of foreign contractors working here,” he said on Friday, August 22, 2014.

According to Hediyanto, foreign contractors working in Indonesia will be selected based on their quality.

Hediyanto added the agency will not extend the permit of foreign contractors who do not undertake projects in the period of three years.

The agency, he added, also requires in its regulation that foreign contractors must renew their permit every three years.

According to Hediyanto, those inactive contractors bring disadvantages to the government, as they do not provide transfer of technology and skills to the local contractors.

In addition, those foreign contractors who are secretly violating the government by including local contractors in their cooperation but not involving them will have their cooperation contract terminated.

"They are active but they do not really work the Indonesian people. They include Indonesian people but in reality they do not involve our people in decision making,” he said.

"Many Indonesian constructors end up becoming sleeping partners only,” he added.

Unfortunately, Hediyanto declined to mention the number of foreign contractors who are secretly violating the government regulation.

According to him, in 2013, there are 302 foreign contractors in Indonesia while the latest data shows that the number of foreign contractors in the country is 298 contractors.

ALI HIDAYAT