T

he Investment Coordinating Board (BKPM) has proposed simplified procedures to the Public Works and Public Housing Ministry in issuing several business permits in a bid to clamp down on bureaucratic red tape in the application process.

In a change to the current situation, a single environmental impact analysis (Amdal) document should serve in the application of three business permits, namely location, environment and building permits, by investors who want to set up a business in Indonesia, according to the board'€™s recommendation.

BKPM deputy director for investment climate development Farah Ratnadewi Indriani said that based on the board'€™s assessment, investors had to provide separate Amdal documents to get the three permits.

Once implemented, the proposal would avoid overlapping requirements to process those permits, she added.

'€œBKPM head [Franky Sibarani] has in talks with Public Works and Public Housing Minister [Basuki Hadimuljono] suggested that the current Amdal documents for those three different permits only need to be integrated with the environment permit,'€ Farah said recently.

The simplified procedures will comprise three basic permits: a location permit that comprises spatial design conformity, land supporting capacity and estimates of the project impacts on surrounding communities; a building permit that consists of construction planning and security, electrical mechanics and plumbing; and an environmental permit that relates to all environmental aspects, including Amdal documents.

Farah said that with the simpler steps, overlapping and interlocking business permits could be avoided, therefore enhancing the ease of doing business and competitiveness.

The complexity in securing building permits has become a major obstacle noted by the annual Ease of Doing Business survey carried out by the World Bank (WB) in recent years.

In terms of '€œdealing with construction permits'€, Indonesia now ranks in 153rd place out of 189 countries, lagging far behind its regional peers, such as Malaysia (18th) and Thailand (26th).

However, Indonesia has made some improvements in indicators set by the global financial institution, which is set to announce the results of its latest survey in October. One of the improvements noted by the WB is a permit related to building construction that has been reduced from 17 procedures to 10 procedures and from 202 days to 149 days.

Indonesia was ranked 114th out of 189 nations in the 2014 Ease of Doing Business report released in October last year '€” a consistent improvement since 2013 when the country stood at 129th.

Franky said the board also proposed that the Public Works and Public Housing Ministry should review its technical guidance about feasible building function (SLF), which was also part of the indicator to determine the ease of getting construction permits.

'€œThe minister basically agreed with the board to simplify the permit process, especially in relation to building construction. On the other hand, the minister hopes that the basic standard of security and environment should be maintained,'€ Franky said.