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Legal Updates | Manpower Ministry Issues Regulation on Delegation of Licensing Authority to the BKPM

The Indonesian Ministry of Manpower has issued a regulation concerning the delegation of some licensing authority to Indonesia’s Investment Coordinating Board (Badan Koordinasi Penanaman Modal or “BKPM”).

Ministry of Manpower Regulation No. 22 of 2017 regarding the Implementation of the One-Stop Integrated Service (Pelayanan Terpadu Satu Pintu or “PTSP”) for the Manpower Sector at the Investment Coordinating Board (“Regulation 22/2017”) was issued in December.

One-Stop Service at BKPM

The general concept of the PTSP was introduced several years ago, through Presidential Regulation No. 97 of 2014 on the Arrangements of PTSP. Regulation 22/2017 is, in essence, a compilation of previous Manpower Ministry regulations governing the implementation of PTSP for the manpower sector. Regulation 22/2017 revokes these previous regulations but does not introduce any substantial changes.

Regulation 22/2017 defines PTSP as an integrated service through a single, unified process, from the application stage through the final delivery of the product or service, all through one door.

Transfer of Licensing Authority

Regulation 22/2017 delegates the authority to issue certain business licenses related to the manpower sector to the BKPM.

The types of licenses the BKPM may issue include licenses for services involving the placement of Indonesian workers domestically; the provision of temporary workers domestically by labor supply companies; and the organization of work training programs.

Such business licenses are issued by the BKPM for and on behalf of the Ministry of Manpower. A copy of the licenses must be provided to the Manpower Ministry, though Regulation 22/2017 does not stipulate the process or timeline for this.

In issuing business licenses for the manpower sector, the BKPM must, among other things, follow the relevant licensing procedures stipulated by the Ministry of Manpower.

Manpower Licenses the BKPM Cannot Issue

The authority to issue certain licenses has not been delegated to the BKPM, with such authority staying with the Ministry of Manpower. These licenses include:

  • Work Permit for Foreigners (“IMTA”)
  • IMTA renewals for foreign workers working in more than one province

Regulation 22/2017 stipulates that officials from the Ministry of Manpower will be assigned to the BKPM to process and sign licenses that remain outside the authority of the BKPM.

SSEK - 22nd February 2018

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Indonesia Snapshot

Capital: Jakarta
Population: 259 million (2016)
Currency: Indonesian Rupiah
Nominal GDP: $936 billion USD (IMF, 2016)
GDP Per Capita: $3,620 USD at Current Prices (IMF, 2016)
GDP Growth: 5.0% (2016)
External Debt: 36.80% of GDP (BI, Q2 2016)
Ease of Doing Business: 91/190 (WB, 2017)
Corruption Index: 90/176 (TI, 2016)