Investors continue to face overlapping procedures involving multiple ministries and regional governments, which create uncertainty over land rights, permits and environmental approvals, according to the Indonesian Industrial Estate Association (HKI).
Industrial cloud: Nickel smelters spew emissions on Jan. 26, 2024, into the skies above Indonesia Morowali Industrial Park and a nearby residential area in Bahodopi district, Morowali regency, Central Sulawesi. (Antara/Dhemas Reviyanto)
The government's plan to establish a new national council on industrial estates, which will report directly to President Prabowo Subianto, is intended to cut through bureaucratic red tape that businesses say has undermined the competitiveness of Indonesia's industrial parks.However, experts argue the proposal risks becoming a politically expedient workaround rather than tackling the root causes of the country's investment challenges, like weak policy implementation, regulatory uncertainty and overlapping bureaucracies.
The proposal, part of an industrial estate bill slated for deliberation under the 2026 national legislation program (Prolegnas), came as industry players grapple with slowing manufacturing activity and industrial estate operators pushing for sweeping regulatory reforms.
