DPR Proposes Ministerial Regulation on Supervision of Regionally-Owned Enterprises

The House of Representatives of the Republic of Indonesia (“DPR RI”) has requested that the Ministry of Home Affairs prepare a draft Regulation of the Minister to fill the legal vacuum regarding the supervision and guidance of Regionally-Owned Enterprises (Badan Usaha Milik Daerah - “BUMD”).

Vice Chair of Commission II of the DPR RI, Aria Bima, stated that this regulation is a crucial initial step to ensure that supervision and guidance of BUMD can be carried out more swiftly and effectively. Currently, supervision only applies to BUMD in the water supply and banking sectors. Supervision of other sectors is also necessary.

“This is part of implementing good corporate governance and is also important in ensuring standardized evaluation and accountability,” Aria told Hukumonline.

He emphasized that the regulation is still in line with the principle of regional autonomy and can be used as a guide for the government in choosing business lines to increase regional income.

“The spirit remains regional autonomy. The region is able to develop economic growth through the development of various resources. So it does not take over the authority of the regional (government),” continued Aria.