NEW REGULATION ALERT: The Purpose of Industrial Zoning based on Government Regulation of the Republic of Indonesia Number 20 of 2024 (GR 20/2024)

On 7^th May of 2024, the Central Government issued new regulation concerning the Industrial Zoning, which is the Government Regulation Number 20 of 2024 concerning the Industrial Area. This regulation revokes the Government Regulation Number 142 of 2015 concerning Industrial Area. Here are some several points which is the focus of this article:

1. The purpose of the Industrial Zoning, based on PP 20/2024 are as follows:

1. First: accelerate the spread and even distribution of industry throughout the territory of the Republic of Indonesia;
2. Second: Encourage an increase in the contribution of investment in the processing industry sector outside Java to the total investment in the national processing industry sector;
3. Third: Growing new industrial growth centers;
4. Fourth: Increasing the utilization of Industrial Resources into Industrial products that have high added value and/or are highly competitive;
5. Fifth: Increasing the capacity of competent Industrial human resources as part of a sustainable Industrial Resources ecosystem; and
6. Sixth: Facilitate coordination and synergy in industrial development in the region.

2. To realize the objectives of Industrial Area, the Central Government and/or Regional Governments divide and develop into Industrial Development Areas (WPI), where WPI can consist of 1 (one) or several provinces, namely Eastern Papua, Western Papua, Northern Sulawesi and Maluku, Southern Sulawesi, Eastern Kalimantan, West Kalimantan, Bali and Nusa Tenggara, North of Sumatra, Southern Sumatra, And Java.

3. In order to increase the WPI economy, the Central Government and/or Local Government developed four things which are Industrial Growth Center Area (Wilayah Pusat Pertumbuhan Industri or WPPI), Industrial Purpose Area (Kawasan Peruntukan Industri or KPI), Small and Middle Industries Center (Sentra Industri Kecil dan Industri Menengah – Sentra IKM), and Industrial Area.

For Industrial Growth Center Area, Industrial Purpose Area, and Small and Middle Industries Center is stipulated by the Central Government and/or Local Government. In which the government helped developed, facilitates infrastructures and facilitates fiscal and non-fiscal facilities. For the KPI it should be done through Spatial Planning (Rencana Tata Ruang Wilayah or RTRW). Whilst, for the Industrial Area it can be done by business entity which established under Indonesian law and can be in the form of business entity such as:

1. State owned enterprise and Local State owned enterprise;
2. Cooperation; or
3. Limited Liability Company.

The fulfilment and compliance of Industrial field by Industrial Area Company is noticed from:

1. Industrial Area Standard;
2. Industrial Area Data; and
3. Business Permit for business activities of Industrial Area.

Failure to fulfill the compliance for the industrial fields faced with administrative sanction from the Government.

4. The GR Number 20/2024, Industrial Company inside the Industrial Area is also obligated to have this several things such as:

1. Environmental Approval for Industrial Companies or a statement of commitment to environmental management approved by the Industrial Estate Company or its manager;
2. Must have Technical Approval for industrial companies involved in the collection, utilization, and/or management of hazardous and toxic waste (B3);
3. Must comply with land use activities;
4. Fulfill the business licensing requirements for industrial activities;
5. Comply with the applicable Industrial Area Regulations;
6. Maintain environmental carrying capacity by not extracting groundwater; and
7. Construct factories and/or buildings that support business activities within a maximum period of 4 (four) years from the purchase and/or lease of the land, which can be extended for 1 (one) year.

This article is only for general knowledge of New Regulation of the Industrial Area in Indonesia, if you have any problem and/or in need of legal aid in the case of Industrial Area, Suria Nataadmadja & Associates Law Office can help you!