President Joko Widodo alias Jokowi has warned his ministers to revise regulations that hamper investment. He pointed to the example of a regulation issued by the Environment and Forestry Ministry and Energy and Mineral Resources Ministry that was not responded well by investors.
Jokowi conveyed the message yesterday in a cabinet plenary at the Presidential Office in Jakarta. It was the second warning issued by the President to his ministers.
President Jokowi expects his subordinates to take into account the impacts of any regulations. He said that regulation changes may necessarily be made gradually to allow stakeholders to adapt. Ministries ought to listen to companies that expect bureaucratic reforms.
“Don’t issue any ministerial regulation that would hamper the business world and would only create more tasks for the ministry itself,” the President said.
Environment Minister Siti Nurbaya declined to comment on Jokowi’s remarks. She said that the ministry was mentioned for reference only.
Energy Deputy Minister Arcandra Tahar was also of the opinion that the President’s message was made in general, not specifically about his office. He, however, has promised to improve any regulations that hamper investment. “We have taken note of the President’s message,” he said after attending the meeting.
He has called on business players to open their perspective on new regulations. He reasoned that the government will not only issue regulations for business interest but also for the wider public.
One of the most controversial regulation being Energy Ministry Regulation No. 12/2017 on New Renewable Energy Utilization for Power Plants. The ministry scrapped feed in tariff provision that increases electricity sales price. The regulation said that power purchase is made based on power plant production cost.
The Indonesian Power Plant Company Association said that the policy may pose risk of hampering investment in micro-hydro plant with a capacity of up to 300 megawatts, most of which are located in West Sumatra, South Sumatra, Lampung and South Sulawesi. The Association chairman Riza Husni said that investment has been blocked due to financial institutions’ refusal to fund micro-hydro projects for low sale price.