Industrial Zone Draft Bill Sets Out Industry Obligations to Regional Governments

Commission VII of the House of Representatives (“DPR”) has proposed that the Draft Bill on Industrial Zones regulate the obligations of industries toward regional governments whose territories are designated as industrial zones.

The Chair of Commission VII of the DPR, Saleh Partaonan Daulay, stated that he has frequently heard complaints from heads of regional government who object to infrastructure damage caused by industrial activities. However, because industrial operating permits are issued by the central government, regional governments often receive no compensation for the use of their territory. In fact, the negative impacts of industrial operations are often felt directly by the local communities.

“What happens is that roads in these local areas are damaged by industrial activities, yet they are not repaired, and there is no budget allocated for them,” said Saleh.

The National Mandate Party (PAN) lawmaker explained that under the Industrial Zones Draft Bill, the central government, regional governments, and industry can engage in trilateral communication to formulate the form of direct contributions to be provided. 

“At that meeting, they will discuss what form the obligations or incentives will take, for example, regarding the repair of roads damaged by distribution activities, conservation of the surrounding natural environment, and so on,” he said.