THE ROLE OF OMBUDSMAN REPUBLIC OF INDONESIA AND EFFORT TO IMPROVE THE EASE OF DOING BUSINESS IN INDONESIA

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THE ROLE OF

OMBUDSMAN REPUBLIC OF INDONESIA

AND EFFORT TO IMPROVE

THE EASE OF DOING BUSINESS

IN INDONESIA

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Speaker

Adrianus Meliala • Drs (UI), MSi.(UI), MSc.(MMU), Ph.D(UQ) • Commissioner/Member of Ombudsman RI, 2016-2021 • Former Commissioner of

National Police Commission, 2012-2016

• Professor of Criminology, University of Indonesia, 2006-Now

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The Ease Of Doing Business

and Public Service

• The Ease of Doing Business closely relates to public service

• The easier service is delivered, the more economic development can be geared toward increasing welfare of society

• State should guarantee good delivery of public service including the ease of doing business in this country to ascertain good investment climate

International Business Integrity

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Position of Ombudsman RI

 Ombudsman RI is the one and only law enforcer in the field of administrative law toward all public and public-related institutions in Indonesia

 Through various mechanisms and using the

perspective of maladministration, Ombudsman RI has a pivotal role in controlling and supporting all public service providers to enable them to deliver a quick, reliable , easy to access and no corruption public service

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Ombudsman RI and Supporting

Business Sector

• Supporting better rank of ease of doing business in Indonesia is rather a new, additional and indirect role of Ombudsman RI

• It seems more strategic and important to be paid attention to since President Joko Widodo has

commented on it several times

• Despite our limitation, Ombudsman RI has dedicated itself to be hand-in-hand with other state institutions by, at least, to pursue anti corruption culture in doing business

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Survey Ease Of Doing Business by

the World Bank

• Indonesia stays at the rank of 109 from 189 countries

• Survey period is started from 2 Juni 2014 to 2015 at One-Door Service Center (PTSP) in Surabaya and Jakarta

• The EODB’s rank should be seen as qualitative image of a country, this deserves a continuing annual increase

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Elements Surveyed

1. Starting A Business *

2. Dealing with Construction Permits * 3. Registering Property *

4. Paying Taxes 5. Getting Credit

6. Enforcing Contract * 7. Getting Electricity

8. Trading Across Borders 9. Resolving Insolvency

10.Protecting Minority Investors *

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* Items seem relevant to Ombudsman scope of work

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The Urgency of this Survey

 To the Government, as indicator of reaction of private sector in responding investment-related policies

 To Private Sector, this may increase positive investment climate

 To Society, better investment climate will directly or indirectly improve public welfare through new investment and availability of job opportunity

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Comparison of Index Score of Indonesia

2015 dan 2016

Aspect 2015 2016 Notes

Starting Business 173 163 Down 10 points Dealing with Construction

Permits 107 110

Registering Property 131 131 Getting Credit 70 71 Protecting Minority Investors 88 87

Paying Taxes 148 160 Up 12 points Trading Across Borders 105 104

Enforcing Contracts 170 170 Resolving Insolvency 77 73

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Comparison with Other Countries

Countries Ranks Laos 134 India 130 Indonesia 109 Filipina 103 Vietnam 90 Tiongkok 84 Thailand 49 Jepang 34 Malaysia 18 Korea 4 Singapura 1

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Notes on 2016 Index

 Starting A Business in Indonesia: suffers declining score since there are still 13 procedure and 47 days needed to start up a business. Ones which still take time more than 10 days are regulation on Surat Ijin Usaha Perdagangan (SIUP) and Tanda Daftar Perusahaan (TDP)

 Taxation enjoys rank increase due to simplification of procedure, from 54 to 10 procedures only

 Permission for Construction (using warehouse as sample) takes average cost of Rp. 86.367.000,-, around 110 working days and 17 procedures

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Our Data

• Ombudsman RI spends resources to focus into several strategic public services that closely related to the ease of business such as: land management, permit and regulations, immigration, tax and custom

• Education, Land Management, Local Government-related Issues and Police Work are 4 (four) sectors most often complained about. Relatively Speaking, Ombudsman RI observes steady but sure improvement in those sectors.

• However, land management as managed by Badan Pertanahan Nasional (the National Land State Body) seems to be the worst .

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Statistic on Public Complaint that relates to Investment Sector and Other Substance that Support Business Investment

(Regulation/PTSP, Tax, Foreign Investment, Banking, Electricity, Land, Custom)

Conference, November 2016 13 6678 6859 7650 1125 1410 2476 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 2014 2015 2016*)

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Total Complaint with Substance on Maladministration Relating Business

Dugaan Maladministrasi

Substansi Laporan

Total Cukai dan Pajak Listrik Penanaman

Modal Perbankan Perijinan (PTSP) Pertanahan

Jml % Jml % Jml % Jml % Jml % Jml % Jml % Berpihak 0 0.0% 1 0.5% 0 0.0% 2 0.6% 0 0.0% 8 0.8% 11 0.4% Diskriminasi 5 1.6% 2 1.1% 1 1.5% 3 0.8% 9 1.4% 6 0.6% 26 0.9% Konflik Kepentingan 60 19.7% 3 1.6% 2 3.0% 4 1.1% 7 1.1% 12 1.3% 88 1.0% Penundaan Berlarut 32 10.5% 20 10.9% 10 14.9% 85 23.5% 163 26.0% 353 37.9% 663 28.6% Penyalahgunaan Wewenang 25 8.2% 22 12.0% 10 14.9% 43 11.9% 82 13.1% 124 13.3% 306 10.5% Penyimpangan Prosedur 40 13.2% 20 10.9% 24 35.8% 100 27.6% 149 23.7% 156 16.7% 489 22.3% Permintaan Imbalan

Uang, Barang dan Jasa 58 19.1% 14 7.6% 3 4.5% 4 1.1% 56 8.9% 41 4.4% 176 5.5% Tidak Kompeten 39 12.8% 10 5.4% 5 7.5% 49 13.5% 53 8.4% 58 6.2% 214 8.9% Tidak Memberikan

Pelayanan 35 11.5% 50 27.2% 4 6.0% 40 11.0% 83 13.2% 146 15.7% 358 17.4% Tidak Patut 10 3.3% 42 22.8% 8 11.9% 32 8.8% 26 4.1% 29 3.1% 147 4.6%

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SUBSTANCE OF COMPLAINT THAT RELATES TRADING, AND BUSINESS PERMISSION

2014 – 2016*)

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By : TIM PTIPP – Pencegahan, Ombudsman RI

DISTRIBUTION ON PROVINCE WHERE COMPLAINANT MAY COME FROM 2014 – 2016*)

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One-Stop Service Center 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.3% 0.3% 0.3% 0.5% 0.7% 0.7% 0.7% 0.7% 0.9% 0.9% 0.9% 0.9% 0.9% 1.0% 1.2% 1.4% 1.4% 1.5% 1.7% 2.4% 2.9% 3.3% 4.1% 9.1% 21.0% 31.3%

Izin Penyelenggaraan Kursus / Balai Pelatihan Izin Perkapalan Izin Usaha Pemotongan Unggas Izin Usaha Perikanan Izin Usaha Perkebunan Permohonan Konvensi TDUP TNKB Izin Usaha Café/Restoran Izin Usaha Panti Pijat SIPA Izin Usaha Toko Modern AMDAL Izin Pendirian SPBU Izin pengelolaan hutan SITU Izin Usaha Jasa Konstruksi (IUJK) Izin Usaha Mikro, Kecil dan Menengah Izin Usaha Perhotelan Izin Usaha Rekreasi dan Hiburan Umum SKDU Izin Prinsip Izin Galian Izin Reklame TDP Izin Usaha Industri Izin Operasional Izin Lokasi izin Gangguan (HO) Izin Usaha Jasa Pertambangan (IUJP) Izin Usaha Perdagangan (SIUP) Izin Pendirian Tower Telekomunikasi Izin Mendirikan Bangunan (IMB) Pelayanan Kantor PTSP

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Tax and Custom

7.0% 0.4% 0.4% 0.4% 0.4% 0.4% 1.2% 1.2% 1.6% 1.7% 1.7% 1.7% 2.1% 2.9% 3.3% 3.7% 3.7% 3.7% 3.7% 4.1% 4.5% 7.8% 12.0% 12.0% 17.4% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0% Lainnya Cukai Rokok Denda Pajak Jasa Konsultasi Pajak Penggelapan Pajak Premi Asuransi Kecelakaan Pajak Reklame Pengurangan Pajak NJOP Pelayanan Petugas Bea Cukai SPPT SPT Tahunan Retribusi Tempat Pariwisata BPHTB Retribusi Daerah Tarif Pas Pelabuhan / Bandara / terminal Bea Ekspor dan Impor NPWP PPn (Pajak Penghasilan) Penetapan Pajak Retribusi Parkir Pajak Bumi dan Bangunan Pelayanan Petugas Pajak Pelayanan Petugas Samsat Pajak Kendaraan Bermotor (PKB)

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Electricity 1.3% 0.6% 0.6% 0.9% 1.3% 1.5% 1.5% 1.7% 1.9% 1.9% 1.9% 2.3% 2.3% 2.6% 2.6% 3.2% 4.0% 13.0% 16.4% 18.1% 20.4% Lainnya Pembangunan Pembangkit listrik Penurunan Daya Listrik P2TL Mutasi Listrik Prabayar Pembangunan SUTET Perbaikan Jaringan Listrik Akses Pelayanan Listrik Distribusi Listrik Penerangan Jalan Gangguan Listrik Penambahan Daya Listrik Pencabutan Meteran Listrik Pembangunan Gardu/Tiang Listrik Pemindahan Jaringan Listrik Pencatatan Meteran Listrik Pemutusan Aliran Listrik Pelayanan Petugas PLN Pemasangan Listrik Tagihan Listrik Pemadaman Listrik

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Foreign and Domestic Investment

16.7% 1.7% 1.7% 1.7% 1.7% 1.7% 1.7% 1.7% 1.7% 1.7% 1.7% 1.7% 1.7% 1.7% 1.7% 1.7% 1.7% 1.7% 3.3% 3.3% 3.4% 6.7% 8.3% 10.0% 20.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% Lainnya Anggaran Belanja Daerah Bunga Pinjaman Invetasi Modal Usaha Lokasi Usaha Pendirian Usaha Industri Badan Usaha Jasa Pertambangan (IUJP) Badan Usaha Mikro, Kecil dan Menengah Jaminan Pinjaman Kepemilikan Saham Pajak Industri Pembayaran Kredit Penerbitan Usaha Pengadaan Barang dan Jasa Penghentian Operasionlisasi BUMD Perjanjian Pinjaman / Pembiayaan Rekening Perbankan Rekomendasi Izin Badan Usaha Pencairan Dana / Modal Pengelolaan Objek Wisata Pengalihan Aset Penggelapan Investasi Usaha Kerjasama Perdagangan Bantuan Dana / Permodalan Penyelenggaraan Koperasi

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Banking 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.5% 0.5% 0.5% 0.5% 0.7% 0.9% 1.2% 1.4% 1.7% 1.9% 2.8% 5.2% 5.4% 6.4% 7.8% 11.3% 14.4% 32.3% Lainnya Deposito Hipotik Pelayanan Petugas OJK Pembiayaan Kepemilikan Emas Pengalihan Aset Jaminan Perbankan PNPM Asuransi Perbankan Bantuan Pembiayaan Penggunaan Dana Permohonan Informasi Kerjasama Perbankan ATM Dana Pensiun Penyitaan Agunan Kredit Kartu Kredit Perjanjian Kerja Kredit Perumahan Proses Pelelangan Account Bank Transaksi Perbankan Pembayaran Kredit Pelayanan Perbankan Jaminan Pinjaman Perjanjian Pinjaman / Pembiayaan

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International Business Integrity Conference, November 2016 23 Land Management 0.5% 0.1% 0.1% 0.3% 0.6% 0.8% 1.2% 1.3% 1.5% 1.5% 2.8% 3.3% 3.8% 4.9% 11.0% 14.0% 17.0% 35.3% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% Lainnya Informasi Status Tanah Tagihan Denda UWTO Informasi Kepemilikan Tanah/Lahan SPPT Sporadik Tanah Izin Mendirikan Bangunan (IMB) Peralihan Tanah Tapal Batas Sengketa Tanah adat/Ulayat Penguasaan Tanah Sepihak Pengukuran Tanah Pembebasan Lahan Ganti Rugi Lahan Hak Guna Usaha (HGU) Hak Guna Bangunan (HGB) Sengketa Lahan/Tanah Sertifikat Tanah

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Subject

of

Complaint

1

2

3

4

• Fail to Deliver Services (17 %) • Breach of Procedure (22 %) • Others (31 %) • Undue Delay (30 %)

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What Happened Once Complaint is Submitted

Ombudsman RI pursues clarification on case complained

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Series of Workshop on EODB, 2016

Palembang

Makassar Surabaya

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Next Year

• To launch massive survey on Index of Public Satisfaction on Public Service

• To launch massive survey on Index of

Maladministration conducted by Public Service Provider Institutions

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