National industry policy promulgated

Although it takes almost twenty five years after the enactment of Law No. 5/1984, Indonesia finally has a comprehensive national policy on the country’s industry. The policy is contained in Presidential Regulation No. 28 of 2008 regarding National Industry Policy. The details of the National Industry Policy (“NIP”) are set forth in the Attachment to the Presidential Regulation No. 28 of 2008. The Regulation imposes on the Minister of Industry the task of compiling a “Road Map” that sets out the direction for master industries such as manufacturing, agro-business, electronics, and telematics, creative industries, as well as certain small and medium scale industries. It opens the possibility for the provision by the government of fiscal or non-fiscal facilities to priority industries, pioneer industries, industries located in remote areas, innovative industries, industries carrying out infrastructure development, industries that are focused on technology transfers, and industries that open up job opportunities The NIP also foresees a fundamental change in the structure of the Indonesian economy from traditional agriculture being the most significant contributor to a more diverse and high technology agribusiness cluster, among others. It sees a shift in the country’s major exports from textile and forest products to stainless steel, motors and motor vehicles, electronics, and basic chemicals. With the NIP, it is hoped that by 2025 the country will have a competitive, world class manufacturing sector of unabated growth that will be the prime mover of the economy. The Regulation has become effective since the day of its issue on 7 May 2008.

West Java proposes five new geothermal sites

West Java Mining and Energy Office proposes five new geothermal sites to be considered as power plants. They are located at Mount Papandayan, Ciremai, Cikuray, Guntur Masigit, and Malabar. “Mount Papandayan and Ciremai are still under Pertamina’s management,” West Java Mining and Energy Office chief, Tb. Hisni, in Bandung. For these two sites in particular, Hisni said it needed to be discussed with the Mining and Energy Department. Previously, Pertamina agreed to hand over these sites to the government. “The government will then hand them over to the West Java Regional government.” (http://www.tempointeraktif.com/)

An energy self-sufficient village in NTB to be built

The West Nusa Tenggara Mining and Energy Office is developing an energy self-sufficient village to cope with electricity shortages. The project will exploit water falls in seven locations to construct the Teras Genit micro hydro power plant in West Lombok. West Nusa Tenggara Mining and Energy Office deputy-chief, Heryadi Rahmat, said the power plant will be able to produce 30 KW of electrical power. The project is expected to become an example in exploiting new, untapped energies. “The potential is huge”, said Heryadi in Mataram yesterday. Besides the waterfalls, the energy self-sufficient village will make use of geothermal energy source in Sembalun, East Lombok. Based on a study by the Geological Agency, geothermal sources can generate 65 MW of energy. The same goes for the geothermal source in Dompu regency. Meanwhile, garnering energy from under-sea current sources in East Lombok will be one of three similar projects in the world. (http://www.tempointeraktif.com/)

Investment promotion will be focused on eight provinces

The Investment Coordinating Board (BKPM) is giving priority to eight provinces in order to attract foreign investments in Indonesia this year. These eight provinces are Riau, Bengkulu, West Kalimantan, Central Java, Central Sulawesi, Gorontalo, North Maluku, and Papua. The potential investment projects of these provinces are still large according the BKPM. The potential investment projects are 5.15 milliard hectare land for palm oil processing in Riau, coal 160 km railways in Bengkulu, bauxite mine in West Kalimantan, textile, shoes, and automotives industry in Central Java, petrochemical industry in Central Sulawesi, corn and sugar plantations in Gorontalo, and nickel mine in North Maluku. (Bisnis Indonesia, July 18, p. 2)

Change of operating hours applicable only in Java and Bali

The policy to change industrial work hours from Monday-Friday to Saturdays and Sundays starting July 21, will only be applied in Java and Bali. Industry minister Fahmi Idris said that to facilitate implementation, the policy will be divided based on four major areas: West Java and Banten, West Java and Yogyakarta area, East Java and Bali. “There are 12.000 industrial plants in the four areas,” said Fahmi. “They use 38 percent of the total electricity required,¨ he added. (http://www.tempointeraktif.com/)

State electricity company (PLN) and entrepreneurs discuss rates for industry

The State Electricity Company (PLN) began negotiations with the Indonesian Chamber of Commerce and Industry (Kadin) about the electricity rates for industry. “We want the rates on weekdays to be Rp1,300 kilowatt per hour,” said PLN's director Fahmi Mohtar yesterday. He said that by using this, rates on weekends will be cheaper than weekdays. Fahmi explained that PLN has divided work hours into 12 clusters based on the distribution region. The cluster will shift work hours every month. Earlier, the entrepreneurs preferred to have higher rates than it does with shifting the work schedule to weekends. According to Kadin's head, Mohammad S. Hidayat, around 40 percent of 120 members of Kadin's members support the rate rise. “We are being realistic about the electricity supply,” he said. (http://www.tempointeraktif.com/)

Fuel oil consumption to be only 20 percent in 2025

The government is trying to reduce the consumption of crude oil to 20 percent in 2025. Luluk Sumiarso, Director General for Oil and Gas from the Energy and Mineral Resources Department said that this was an initiative for developing a green oil and gas industry. “We need to secure fuel and gas supply,” he said yesterday (14/7). It is also aimed at encouraging gas consumption, increasing public and industrial awareness to save energy, and to reduce oil and gas waste that could damage the environment. There are supply and demand perspectives in this policy. (http://www.tempointeraktif.com/)