Chairman of Commission VI of Hose Airlangga Hartarto was expecting that
amendment of Law on Industry which at the moment was still at the stage of
hearing session to hear input from expert, the target was that by end of 2013
the law would have been passed. Law no 5 of 1984 on Industry was no longer
relevant to the changed paradigm in industry. Hopefully revision of this Law
would support the development of highly competitive industry.
He remarked further that to promote quality of domestic products,
quality standardization of domestic products would be regulated. The standard
to applied on domestic products would be the Indonesia National Standard [SNI]
which encompassed technical specification and guidelines on procedures.
The industrial Bill would also regulate matters related to financing
resources, whereby the Government would have the authority to facilitate or
ease financing in terms of capitalization, eased credit interest, discount for
machineries and equipment purchases to the private industry. Financing
allocation or eased financing for private companies was burdened on the APBN
Budget. The Industrial Bill also commanded formation of Financing Body for
financing industrial development.
Furthermore the Industrial Bill would regulate empowerment of
small-and-medium industry including obligation for the industry to use local
products. Use of local products was mandatory for government bodies,
State-owned Companies [BUMN] and Provincial State Owned Companies [BUMD] and
Private Owned Companies [BUMS] which in the procurement of goods and services
used APBN Budget or through collaboration with the Government. Soon the
domestic industry must concentrate on making products of added value.
Incentive for Labor Intensive Industry.
Indonesia’s industry was now posting production downturn, not excepting
the labor intensive industry which was under pressure for the past six months
as signaled by their declining output. Many factors accounted for the downturn,
among others high laborers’ wages, lack of incentives, illegal collections, and
high logistics cost.
In response to that matter, Member of Commission VI of House Ida Ria
Simamora stated that Indonesia was offering investment opportunities for
labor-intensive projects. Therefore, incentive must be given to the labor
intensive industry in order to maximize use of local contents in production.
To illustrate, the textile industry sector absorbed most labor, but this
sector was never given the benefit or incentives in the form of exemptions in
sales tax. According to Ida, today Commission VI of House was dissecting the
Industrial Bill and has summoned some associations. It was expected that by the
time the Law was put in effect it would be advantageous to the textile
industry. Incentives would be given to industries as long as they were
labor-intensive.
Illegal collections which was still at large in the industrial world, is
a classical problem. For that matter Commission VI of House would intensely
discuss the matter in the Industrial Bill. Not just illegal collections, the
complicated procedure of the bureaucracy, scarcity of raw materials, and
logistics problems were other matters to enter the inventory list of problems
in dissecting the Industrial Bill. (SS)
Business News - March 08,2013
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