House of Representatives Highlights the Alignment of Authorities Between the Ministry of Trade and the Ministry of UMKM in the PMSE Regulations

The Ministry of Micro-, Small-, and Medium-Scale Enterprises (“UMKM”) is finalizing the drafting of Regulation of the Minister (“Draft Regulation”) on the Protection and Enhancement of the Competitiveness of Micro- and Small-Scale Enterprises (“PMSE”) in Electronic Commerce (“PMSE”). Member of Commission VI of the House of Representatives of the Republic of Indonesia (“DPR RI”) Darmadi Duriyanto highlighted the importance of clarity regarding the division of authority between the Ministry of UMKM and the Ministry of Trade, which had previously updated the PMSE regulations through Regulation of the Minister of Trade.

According to Darmadi, certainty regarding coordination between the two ministries is needed so that the policies issued do not overlap or cause confusion for business actors. “So, to what extent is the coordination between these two ministries? This is very important. After all, the Ministry of UMKM also wants to enter the trade sector,” said Darmadi.

Based on the Draft Regulation obtained by Hukumonline, the Ministry of UMKM is granted primary authority over the standardization of fair and transparent partnership agreements. Under these provisions, platform organizers must include minimum clauses in partnership agreements and provide a service fee discount of at least 50 percent to verified UMKM selling domestic products.

In the area of supervision, the Ministry of UMKM has the authority to conduct periodic monitoring to ensure the application of healthy partnership principles. Additionally, the ministry may facilitate binding negotiation processes if there are objections regarding service fees. Although general licensing authority lies with other ministries, the Minister of UMKM may recommend the revocation of business licenses for platforms proven to violate UMKM protection regulations.