Draft Law on Regional-Owned Enterprises to Strengthen Supervision

The Government is currently preparing a Draft Law (Rancangan Undang-Undang– “ RUU ”) on Regional-Owned Enterprises (Badan Usaha Milik Daerah– “ BUMD ”). One of the key objectives of this RUU is to strengthen supervision mechanisms over the performance of BUMD, particularly for entities deemed non-transparent, unprofitable, or potentially harmful to regional finances.

“We have conducted extensive studies. It is important to ensure that the more than one thousand BUMDs truly demonstrate good and transparent performance and contribute to regional own-source revenue,” said Bima Arya, Deputy Minister of Home Affairs, to Hukumonline.

The BUMD RUU is currently in the harmonization stage at the Ministry of State Secretariat. As an initial step to strengthen supervision and guidance, the Ministry of Home Affairs has elevated the status of the Sub-directorate for BUMD Supervision and Guidance to an echelon I unit. “This allows us to provide more effective guidance to BUMDs,” he added.