The Supreme Audit Agency (BPK) has noted that there were 4,103 foreign investments that did not meet the minimum investment value requirements, based on the results of the 2019-2020 audit.
“This, among other things, resulted in investment activities with a realisation of Rp75.94 trillion being potentially problematic and have not met the legal requirements to be recognised, recorded, and reported as the realisation of foreign investments,” wrote the Supreme Audit Agency through the Semester Examination Results Summary (IHPS) II/2021.
Their findings refer to the Investment Coordinating Board (BKPM) regulation number 6/2018 concerning Guidelines and Procedures for Licensing and Investment Facilities. It stipulates that foreign investment must be in a large business that must have an investment value of Rp10 billion, excluding land and buildings.
The BPK has recommended to the Head of the Investment Coordinating Board to instruct the Deputy for Investment Services to request the Directorate of Business Licensing Compliance Monitoring to monitor foreign investment business actors who invest less than Rp10 billion and take action in accordance with the laws and regulations.
In addition, the Head of the Investment Coordinating Board is to perfect the online single submission (OSS) application. This is designed to be able to refuse business license applications from foreign investors with a planned investment value of less than Rp10 billion, excluding land and buildings, automatically and in real-time.
Overall, the results of the examination of the management of the implementation of investment in 2019-2020 at BKPM revealed seven findings containing two problems.
“The problems consist of eight weaknesses in the internal control system and four non-compliance with the provisions of the legislation,” explained IHPS II/2021.