Government to Form Mandatory Minimum Local Content Watchdog

TEMPO.CO, Jakarta - The government will form a team to supervise the mandatory use of mandatory minimum local content (TKDN), to boost domestic industries.

Industry Minister Airlangga Hartarto, said that the government will enforce the regulation on the TKDN requirement.

"The regulation [on mandatory minimum local content] has been finalized, and we need to enforce its implementation. There will be a joint team that will monitor [local content] purchases and planning," Airlangga said at his office in Jakarta on Wednesday, April 12, 2017. 

Airlangga revealed that the government will work with the Development Finance Comptroller (BPKP) to enforce the regulation. Airlangga said that the TDKN supervision is expected to boost the development of local industries, such as the oil and gas supporting industries, power plants, electricity distributions, and others.

Airlangga claimed that domestic products have managed to tap into overseas markets, such as Australia, Saudi Arabia and Russia. However, Airlangga expected that Indonesia would step up its game from being a country that assembles imported components to a component manufacturer as well.

I Gusti Putu Suryawirawan, director general of metal, machinery, transportation equipment and electronic industries at the Industry Ministry, added that Indonesia has a number of regulations on local content minimum requirements. However, the implementations of those regulations were often hampered by poor planning.

Therefore, Suryawirawan revealed that the government will initiate a more transparent planning for government's expenditure, particularly for state-owned companies, in order to stimulate domestic industries.

"The Industry Ministry has issued guides for calculating and using local contents. However, they are only applied to institutions with an authority to procure goods. We will form a supervisory team to prevent unplanned expenditures in order to reduce costs," Suryawirawan said.

ANTARA