Revision of KADIN Law Requires All Business Actors to Become Members of KADIN

The revision of Law No. 1 of 1987 on Indonesian Chamber of Commerce and Industry (“Law 1/1987”) will require business actors to become members of KADIN. Firman Soebagyo, a member of the Legislative Body of Indonesia’s House of Representatives (“DPR RI”), stated that this provision is intended to enable KADIN to perform its supervisory function more effectively.

“If all business actors become members, KADIN can be held accountable for the conduct of its members, for example if a contractor fails to fulfill its responsibilities in the execution of government projects,” he told Hukumonline.

According to Firman, by mandating membership for all business actors, KADIN would be able to ensure that the implementation of government programs involving business actors does not fail midway. This is because KADIN would have the authority to impose sanctions on irresponsible business actors that cause harm. Such sanctions may take the form of administrative measures, such as blacklisting from government projects.

Furthermore, Firman added that the requirement for KADIN membership would also serve to ensure more comprehensive registration of business actors. With more complete data, KADIN could optimize its role as a government partner in economic development, from the implementation stage through to supervision at both the central and regional levels.