In response to the Covid-19 outbreak, the Indonesian Government has enacted specific regulations to impose the large-scale social restriction policy (pembatasan sosial berskala besar – PSBB). This policy temporarily limits mass activities within certain areas (please see W&P’s previous newsletters on large-scale social restriction and economic stability regulations here and measures taken by the Indonesian Government here).
To further implement the PSBB policy, the Indonesian Minister of Health (“MOH”) has issued Regulation No. 9 of 2020 on the Guidelines of PSBB for the Acceleration of Mitigation of Corona Virus Disease 2019 (Covid‐19) (“MOH Regulation 9/2020”), which allows Regional Governments to declare PSBB in their respective jurisdictions upon obtaining an approval from the MOH.
To support and to ensure the continuity of those sectors considered essential for the public, regardless of the general PSBB policy, certain business sectors are exempted from the application of PSBB. These business sectors include export-import, grocery, medical shop, health facility, gas station, as well as industrial and production sectors.
For the industrial and production sectors in particular, the exemptions include:
- Essential commodity production units, including drugs, pharmaceutical, medical devices or equipment, household health supplies, raw materials and intermediate;
- Production units requiring sustainable processes after obtaining the necessary licenses from the Minister of Industry;
- Production of petroleum and natural gas, coal and mineral, and activities related to mining operations;
- Manufacturing units of packaging materials for food, drugs, pharmaceutical, and medical equipment;
- Farming activities for staple ingredients and horticulture;
- Export goods production units; and
- Production units for agricultural goods, plantations, as well as the production of micro, small, and medium businesses.
In relation to exemption #(ii) above, it is important to note that the exemptions do not automatically apply for industrial companies of industrial estate companies. This is because the Minister of Industry (“MOI”) has recently issued circular letters No. 4, No. 7 and No. 8 of 2020 (collectively, “MOI’s Circular Letters”), requiring all Industrial Companies and Industrial Estate Companies planning to continue their operations during the PSBB to first obtain the so-called Operational and Mobility of Industrial Activity License (“OMIAL”) from the MOI, which can be obtained through the MOI’s website (siinas.kemenperin.go.id). As of the date of this newsletter, it is reported that more than 14,000 industrial companies have secured OMIAL from the MOI. As MOI’s Circular Letters do not specifically limit OMIAL applicants, one interpretation is that OMIAL may be granted to all industrial sectors.
After securing the OMIAL, these companies are then required to implement the health standards set in the Circular 4/2020 and to submit a weekly report to the MOI.
The centralization of OMIAL issuance may contradict the Regional Governments’ policies. For example, in DKI Jakarta, the exemption to PSBB only applies to strategic sectors and therefore not to all sectors—unlike the directive of the MOI. This potentially creates confusion between the Ministry of Industry and Regional Governments on how each institution perceives which industrial sectors are allowed to be active during the PSBB.