Draft Law Strengthens Governance of BUMD

The Government, through the Ministry of Home Affairs (Kemendagri), is finalizing the Draft Law (Rancangan Undang-Undang – “RUU”) on Regional-Owned Enterprises (Badan Usaha Milik Daerah – “BUMD”). The draft will soon be deliberated with the House of Representatives of the Republic of Indonesia (Dewan Perwakilan Rakyat – “DPR”).

“The draft is ready. It is already in the final stage. We just need to submit it to the leaders at the DPR and the State Secretariat (Ministry of State Secretariat),” said Bima Arya Sugiarto, Deputy Minister of Home Affairs to Hukumonline.

This regulation is intended to strengthen the governance of BUMD and reinforce the role of regional heads as the primary managers of regional assets and regional potential. The RUU BUMD is expected to secure increased Regional Original Revenue (Pendapatan Asli Daerah – “PAD”) without reliance on transfers from the central government.

“The BUMD will truly demonstrate strong and transparent performance, and contribute to PAD,” Bima said.