Illegal Fee Create High Cost Economy 

Interviwers: G. Windrarto and Pandapotan Simorangkir

Sunday, April 22, 2007

However the said law is not very anticipated by the public. Some parties believe that the presence of the said law will straightened new imperialism in the country. There are some articles in the law are considered to grant freedom for the investors, especially for foreign investors to scrap wealth in this country that later would make this nation more collapse.

On the interview held by Suara Pembaruan in Jakarta recently, Iman posed his views regarding the said new law as followed.

I do not think that there is any difference between domestic and foreign. The purpose of the present Investments Law is to attract investors to invest their capital in Indonesia. By the presence of investors in Indonesia then it automatically will increase the employment opportunities. Now it is time to observe whether the investment in Indonesia will grow better or not. Globally we knew that annually there are tendencies that the investment is decreasing. From the year of 2000, 2001 and 2002 there are reports that the investments in Indonesia are decreasing. Why? It is caused of the various factors. Labor problems interrelated with the regulated law in field have not attract the investors so far.

I presume that it will not be a problem. For example if we come to a country to invest then the goal would be gaining a profit. Regarding this profit if for example we send it out of the country then what is wrong? The most important thing is that the tax provisions that should be applied consistently therefore the country could gain enough incomes from the said invest values. If after tax the said profit is sent out of the country so what is wrong with it?

Principally the national treatment principle is recognized by the WTO rules which mean that we shall treat foreigner as we treat Indonesian people. We also have ratified the WTO rules.

Yes, it is. Especially we also accept free market and free trade.

So there are obligations on how to regulate the non-discriminatory legally. When the investors arrive they are bound by the rules to transfer their technologies. If they break it there will be legal sanctions. I have observed that these kinds of matter have not regulated yet. In various countries, such as Singapore, the provision is acceptable by every investor. It means you are not allowed simply gain and take out profit without transfer the technologies.

There always be possibilities as long as the system is good. It is also related with the government’s control of duties to levy taxes which must be paid by the investors. China and Malaysia applied that kind of system. The regulation mentioned that the deposited period for two years only. System which built in Malaysia has already firmed, starting from the incentive offers and taxes going to be held by the investors.

As an advocate which has accompanying investors that also having investment outside of the country, like Malaysia, are there any chances of opportunities of the inflating of the high cost economy caused by the illegal fees levied?

Investments Law has stated firmly that the permit shall be done in one month since the treatment will be processed under one door, hasn’t it?

According to you, is it possible to process the permission within one door?

There is a spirit for investment attraction after this law regulated. On the other side there is a Regional Government Law regulating about autonomy. Do you see any contradiction might happen in field?

If it is so then the investment which expected to be spread equally all over the Indonesian regions are still limited to the hope only since the realization would need a long time?

Other thing that is still being questioned is related to the land rights. One of the land rights is offered for 90 (ninety) years period of time. How do you see the matter, could it be accepted immediately by the investors?

Once again, what is really needed by the investors is the legal certainty to be implemented consistently. In the other hand, we should be strictly supervised the land utilization. We should not give permission for plantation field opening where in fact there is no plantation, or give an agricultural permit but in fact the investors did not run business in the agricultural field. Especially when the field is being neglected, this would cause a problem.

It is simply because there is no clear regulation where the same cause many problems, especially the problems that could trigger a high cost economy that cannot be settled well.

It should be regulated in the Governmental Regulation.

Well, it is Limited Liability form.

Since the government is the one who gives the permission, then the investors should face the government. But the problem is, if there is a legal dispute where the settlement brought to the arbitration. This is a question that we supposed to be able to answer.


It can be looked that there are lots of problems that have not been settled legally. The investors who wish to invest their capital in Indonesia at the very first thing will consider about the profits that can be taken from this country. The next thing is the availability of facilities whether those have been fully equipped or not, then about the labor regulations and the work ethics. Afterwards they will learn the prevailing law. So basically there are lots of things that shall be noticed and it is not only about the legal certainty matter.

No, it is not allowed. The workers shall be from Indonesia, except for the experts to operate high technology wares. Since the high technology and experts are allowed to be employed by the investors therefore there is a need to regulate the technology transfer provision.