OSS Makes Applying for Business Licenses Easier, Says Official

MINISTRY OF ENERGY AND MINERAL RESOURCES

REPUBLIC OF INDONESIA

PRESS RELEASE

NUMBER: 370.Pers/04/SJI/2021

Date: 21 October 2021

OSS Makes Applying for Business Licenses Easier, Says Official

The Indonesian Ministry of Energy and Mineral Resources (EMR) has continuously made efforts to ease licensing in the electricity subsector by utilizing the online system. All business licenses in the electricity subsector are granted through the Online Single Submission (OSS) of Risk-Based Business Licensing (PBBR), Director General of Electricity, Ministry of EMR, Rida Mulyana, has said in webinar titled "Ease of Business Licensing in Electricity Provision" held on Thursday (21/10).

"Directorate General of Electricity uses the system to verify the technical data as the basis to issue a Business License. Because verification is done online, businesses can track their application status," said Rida.

Rida went on to explain that businesses would also be notified to complete or revise their data if their application were rejected.

The government has enforced Law Number 11 of 2020 on Job Creation (Job Creation Law). The Job Creation Law aims to increase employment and provide ease of doing business. As the follow up to the Job Creation Law, the government introduced Government Regulation (GR) Number 5 of 2021 on the Administration of Risk-Based Business Licensing. This government regulation mandates that every state ministry/agency and regional government uses the same approach for business licensing, namely a risk-based approach.

"Every state ministry/agency analyzes the risks of a business, and classes its risk levels into low, medium, or high. This way, starting a business will be faster and easier, and at the same time, we can give business certainty that investors have demanded," said Rida.

Rida said GR 5/2021 also specified Indonesian Standard Classification of Business Lines (KBLI). The KBLI is a reference in classifying Indonesia's business activities into several business lines.

The KBLI distinguishes types of economic activity that produces products/outputs in the forms of goods and services. The KBLI codes for electricity businesses are numbers 35111 to 35118, covering electricity businesses of generation, transmission, distribution, and sales.

On the same occasion, Director of Electricity Business Fostering Ida Nuryatin Finahari explained the documents needed to apply for an electricity business license.

"For a low-risk business line, an entity must have a Business Registration Number (NIB). Next, an NIB and a Standard Certificate are mandatory for a medium-risk business line, and an NIB and a License or a Standard Certificate--if requested--for high-risk business line. The majority of electricity provision businesses are classified high risk, so a license is necessary," said Ida.

Ida then detailed the scheme for electricity provision businesses currently in force, including Determination of Business Area which is the basis for electricity provision for public interest, Electricity Provision License for Public Interest (IUPTLU), and Electricity Provision License for Self Interest (IUPTLS).

"What I need to underline here is that of the various business licenses currently in force, a business entity does not have to hold all these licenses before starting its business. In principle, the licenses that are needed depend on the type of the business line," Ida added.

Other resource people included Director of Business Licensing Services Ariesta Riendrias Puspasari and Director of the Development of Business Licensing Systems Edy Junaedi from the Ministry for Investment/Investment Coordinating Agency (BKPM) as well as Head of Center for Data and Information Technology of the Ministry of EMR (Pusdatin ESDM) Agus Cahyono Adi.

Edy Junaedi said the basic principle of risk-based business licensing was 'trust but verify'. "This means that business people are given complete trust to feed in valid data on their business. Later, the OSS system will verify the data," continued Edy.

Meanwhile, Agus Cahyono Adi said that the OSS PBBR system would be integrated with the ESDM Licensing Application. "Pusdatin ESDM will give our support for the integration of the OSS with the application of the Ministry of EMR to ensure that all technical data are received, verified, and communicated to you all, Ladies and Gentlemen," Agus confirmed.

The webinar "Ease of Business Licensing in Electricity Provision" aims to disseminate the latest regulations and policies on business licensing to stakeholders, especially after the enactment of Job Creation Law. Various stakeholders participated in the webinar, including regional governments, electricity business people, and electricity business associations. (IY)

Head of Bureau of Communication, Public Information Services, and Cooperation

Agung Pribadi (08112213555)

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