AmCham Update Vol. 4 #11

Job Creation Law Regulations, AmCham ASEAN Committee, Biodiesel and Coal Plant Emissions, Vaccines For Kids in March

Feb 01, 2023

Omnibus Law Derivative Regulations To Be Revised

The government will revise a number of derivative regulations related to the omnibus Job Creation Law to ensure investment realization runs smoothly. Coordinating Minister of Economic Affairs Airlangga Hartarto said revising Government Regulation 5/2021 on the implementation of risk-based business licensing was essential, along with regulations related to building permits, spatial planning, and environmental permits.

However, these revisions will have to wait until the omnibus law is declared constitutionally legal, following the Supreme Court’s ruling in 2021. With licensing services hampered due to lack of supporting regulations, there have been concerns over jeopardizing potential investment. President Joko Widodo has also stressed the importance of business related licensing being quickly issued, such as building permits, which have a positive impact on investment and generate a multiplier effect such as opening employment opportunities.

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AmCham ASEAN Committee: Taking Stock of Indonesia’s Chairmanship

AmCham’s ASEAN Committee held its first meeting of 2023 on Jan 31, discussing Indonesia’s ASEAN Chairmanship and collecting aspirations from participants on committee activities this year.

The meeting began with opening remarks from Co-Chair Lydia Ruddy, who said she expects more committee activities this year as Indonesia’s ASEAN Chairmanship will lead to more opportunities for US businesses to contribute. Co-Chair Shanti Shamdasani then gave a brief presentation on Indonesia’s ASEAN Chairmanship in 2023. As revealed by Coordinating Minister for the Economy Airlangga Hartarto, Indonesia’s chairmanship will focus on three priority economic issues: recovery and rebuilding, the digital economy, and sustainability, the implementation of which has been made into 16 Priority Economic Deliverables (PED) for 2023.

Participants were eager to ask questions regarding Indonesia’s chairmanship, and how businesses can participate. The committee agreed that last year’s G20 was a good example of where the private sector was heavily involved in providing input to the multilateral platform, and the participants hoped AmCham could actively contribute this year.

For inquiries about the committee, please contact Peter Lie at [email protected].

AmCham Cares: Merck Sharp & Dohme

Merck Sharp & Dohme (MSD) has partnered with Mercy Corps Indonesia to provide humanitarian assistance for earthquake relief efforts to impacted regions and communities in Cianjur. On Dec 27, 2022, Dr Irvan Nur Fauzy, Head of Cianjur Public Health Authority, symbolically accepted the assistance at the Cianjur Regent’s office. This assistance will reach 450 Households through the following interventions:

Clean water access through 10 water points
Kitchen and cutlery kits to 450 households
Voucher assistance for target participants to buy items according to their unique needs (especially the most vulnerable) and purchase nutritious food materials from the local market. This will also contribute to the local market and economy recovering faster
Advocate a clean and healthy lifestyle and the five pillars of community-based total sanitation promotion to transmit healthy living experiences
Nutritious food processing and consumption promotion. Training of trainers will be conducted for local promoters in collaboration with health agencies and the Integrated Healthcare Center (Posyandu). The local champions will then train women with babies on the importance of nutritious food and give examples through demonstrations on how to prepare and cook healthy food for babies.

This humanitarian aid is prioritized for families with vulnerable family members, namely pregnant women, nursing mothers, and mothers with children aged five to 10 years. MSD has a long history in Indonesia, and this support is a commitment to strengthen the communities where it operates around the world.

Gov't Starts B35 Program

The government kick-started the implementation of the B35 biodiesel program today, Feb 1, and it is a step forward in increasing the amount of biofuel mixed in diesel oil to 35 percent, up from the 30 percent in the previous B30 launched in 2019. B35 will have a myriad of benefits: reducing diesel imports, saving up to Rp 161,25 trillion of foreign exchange reserves, and reducing greenhouse gas emissions by 34.9 million tonnes of CO2, said Minister of Energy and Mineral Resources Arifin Tasrif.

Domestic automotive industry players have said they are ready for the program, including the Indonesian Automotive Industry Association (Gaikindo). However, Gaikindo has some reservations, such as whether it is in accordance with international standards such as Euro 4 emission standards.

Analysts also said B35 will potentially reduce the supply of crude palm oil (CPO) intended for cooking oil production, which could lead to an increase in prices.

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Coal Power Plant Emission Quotas Set

The Ministry of Energy and Mineral Resources (ESDM) has established a set of emission quotas for coal power plants, following the issuance of Ministerial Regulation 16/2022 which created a carbon trade scheme for power plants. The quotas are set in the form of carbon emission ceilings that will be applied to 99 power plants.

There are four types of limits on greenhouse gas emissions (PTBAE) with limits ranging from 0.911 to 1.297 tonnes of CO2 per Megawatt/hour (MWh), varying according to the size and classification of each coal power plant.

The thresholds will be dynamically lowered each year through consultation with stakeholders, said acting Director General of Electricity Dadan Kusdiana. As for the carbon price per unit in the carbon trade, it will be left to the market to decide. The implementation of carbon trade for power plants is projected to bring down carbon emissions by 500,000 tonnes in 2023.

Previously, Executive Director of the Institute for Essential Services Reform (IESR) Fabby Tumiwa called for more progressive emission quotas for coal power plants, in order to accelerate emission reduction.

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Gov't Prepares Covid-19 Vaccinations for Children

The Ministry of Health has said it will start administering Covid-19 vaccines for children aged above six months in March, following an internal evaluation and collaboration with the World Health Organization (WHO).

Pfizer is currently the only vaccine allowed to be administered, Head of Ministry of Health’s Communications and Public Services Bureau Siti Nadia Tarmizi said. The Ministry also received recommendations from Indonesia Technical Advisory Group of Immunization (ITAGI) and the Food and Drug Control Agency (BPOM) in regard to vaccination.

The government has prepared 4.7 million primary doses for the next six months. Socialization to the public is also being carried out through public figures and professional organizations, as well as SMS messages.

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Tourism Improved Post-PPKM

The domestic economy and tourism activities have recovered significantly since social activity restrictions (PPKM) were lifted, Minister of Tourism and Creative Economy Sandiaga Uno said. The government also plans to increase the number of domestic and international flights this year to achieve its goals in attracting more foreign tourists. President Joko Widodo has also expressed his optimism over the tourism sector.

As a part of Indonesia’s ASEAN Chairmanship, the ASEAN Tourism Forum (ATF) will be hosted in Yogyakarta this month. It serves as a platform for regional cooperation in the tourism industry. The ATF series features discussions with government officials and relevant stakeholders, including businesses, from ASEAN Plus Three countries.

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Now is the Time to Join AmCham!

We offer a full slate of meetings, events, and information for our community online. But we can only do this through the support of our members. If you are not yet an AmCham member, please join now.

AmCham Indonesia is open to all companies with an interest in US business relations and we have many non-American members. We are a community and we welcome you!

Reach us at [email protected] or click below!

JOIN AMCHAM

What is Your Company Doing on COVID-19?

Please let us know what measures your company may be taking in the form of donations and other assistance to help Indonesia during this time of confusion and concern. Contact [email protected] with your news. We would like to publicize the ways that our AmCham companies are pitching in.

Stay well

We urge you to send us press releases and other information that we can pass on to the broader AmCham community. If you have items of interest, please email material to [email protected]. Follow this link to information provided by the US Embassy

Stay safe, call a doctor if you have a high fever, cough, or difficulty breathing. Stay healthy above all else.

AmCham Update is AmCham's regular newsletter on developments related to the pandemic crisis and other issues in Indonesia. It is edited by AmCham Managing Director A Lin Neumann and written by the AmCham Staff. Paul L Goddard is the Managing Editor.

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