Regional Investment Policy Package Of Pinrang Regency (PAKSI PINRANG)
Regional Investment and One Stop Service Agency of Pinrang Regency

A. Problem Analysis

 1. What was the problem before the implementation of the initiative?
Regional development objectives to achieve public welfare should be done with a sustainable development. The level of competitiveness is one of the parameters in the concept of sustainable area. The higher the level of competitiveness of a region, the increase in welfare even higher, so that local governments with the private sector to form a partnership to create new jobs and stimulate local economic growth. According to The Central Bureua of Statistics Republic of Indonesia (BPS) data in 2011, economic growth of Pinrang regency of 7.12 percent. It is higher than the national economic growth of only 6.49 percent. The growth rate of the population, especially of childbearing age who are ready to work by 8% or 8,000 people every year to become a demographic bonus and a threat for Local Government of Pinrang regency (Pinrang) to prepare for employment. Regional government budget of Pinrang Regency (APBD) have limitations in creating new job opportunities for the productive age. The economic growth of Pinrang in the economic structure is dominated by the agricultural sector as a national agricultural buffer, so it needs a breakthrough to mobilize other sectors such as industry, tourism, and so on. The Pinrang has potential and investment opportunities that can be driven by the private sector (domestic and foreign direct investment). According to BPS data in 2011, realized regional investment of Pinrang only Rp. 50 Billion and only contributes 0.02% of the regional investment realization of South Sulawesi province. Therefore, the Pinrang must have the innovation to solve major issues include economic growth, new jobs, the regional investment realization, limited of APBD, and the development of potential sectors (tourism, local culture, products, and industries by partnering with SMEs) , One of the innovations that the Pinrang establish institutions that can provide services to the public integrity that is One Stop Service (OSS). According to the survey results public service integrity conducted by the Canadian International Development Agency in cooperation with the Corruption Eradication Commission (KPK) In 2011 the perception of people who use services unit OSS, OSS in Pinrang value integrity of 5.83, meaning that the value is still below the value of the minimum standards of integrity set by the KPK. This fact confirms that OSS in Pinrang, have a high frequency of the occurrence giving gratuities to officers. This indicates that the eradication program and the prevention of corruption has not been fully implemented, and if it has been implemented has not shown significant results. In the Year 2012, the Pinrang issued answer innovation to address major issues such as ease of doing public service for potential investors. The breakthrough is Regional Investment Policy packages of Pinrang Regency (Paksi Pinrang) that raise four policies that local tax incentives, regional aid policy, OSS, and licensing service online system. Paksi Pinrang expected to give effect to the social groups include the poor and vulnerable, job seekers, women, and so forth. The impact is expected to Paksi Pinrang the jobs available, corporate social responsibility, and improve household incomes.

B. Strategic Approach

 2. What was the solution?
Regional Investment Policy Package of Pinrang Regency (Indonesian : Paket Kebijakan Investasi Kabupaten Pinrang), abbreviated as PAKSI PINRANG.

 3. How did the initiative solve the problem and improve people’s lives?
Paksi Pinrang an initiative Regent Pinrang period 2009-2014 to create regional competitiveness through innovations that make potential investors interested in investing in Pinrang. Pinrang must have advantages in other areas in treating potential investors to become interested investment. Paksi Pinrang further developed by Regional Invesment and One Stop Service Agency of Pinrang Regency (DPMPTSP) by conducting various policies to support the preparation of such innovations. The main problem is the potential investors the certainty of land, availability of electricity and water, environmental security, licensing, fiscal and non-fiscal facilities offered. While the main issue Pinrang today is the increasing of productive age in 5-10 years ahead that need jobs, so Pinrang in need of outside investment (APBD is insufficient to provide new jobs). Paksi Pinrang be a solution to solve the above issues, assuming that Pinrang competitive areas such as the availability of land is still cheap (industrial area), infrastructure support, security, availability of local manpower, availability of electricity and water, labor, ease licensing, local incentives, commodity, etc. For example, Potential Investors will build a processing plant Seaweed in Pinrang, it takes 15 hectares of land, labor 500 people, and an investment of 300 billion rupiah. Paksi Pinrang offers the ease of obtaining land including low prices even LGs Pinrang own land in an industrial area that can be cooperated (Public Private Partnership), provide incentives for the area in the form of exemption of taxes and levies, aid for the fiscal facility of the Central Government, accelerating licensing, warranties availability of electricity and water, an online licensing and requirements of the local labor force of at least 75%. This means: (1) potential investors were interested because it was given a variety of convenience compared to other areas, (2) community Pinrang also benefit the jobs available, and (3) Local Government Pinrang benefit from significant economic growth. Strategies currently include: a. promotional opportunities and potential investments, consisting of: one on one meeting, exhibitions, informal communication with local businessmen to invite other investors, etc; b. Potential investors will be picked up at the airport or meeting in Jakarta or other areas to introduce investment opportunities; c. Expose potential investors attended by the Regent and some related regional organizations (OPD) including National Electricity Company (PLN); d. A review of the land or the planned location (when the industry will be directed to the industrial area); e. The signing of a memorandum of understanding between the Local Government of Pinrang with potential investors; f. Licensing and other facilities; g. Plant groundbreaking, h. Recruitment of local labor; and i. Commercial operation (the inauguration). Pinrang through DPMPTSP will ensure that the project or the investment goes well. So Paksi Pinrang now has provided benefits for society Pinrang with the presence of various potential investors to invest in Pinrang. The main purpose of Paksi Pinrang are as follows: a. Improving the realization of the regional investment that will affect economic growth of Pinrang; b. Creating jobs for people Pinrang of various classes or social groups eg youth, the poor, women, etc. While the additional objective is to create an attraction and interest in investment for potential investors. The target groups who will benefit from Paksi Pinrang are: a. Potential Investors: interested in investing in Pinrang; b. Community Pinrang: the requirements of the local labor force of at least 75% of the total workforce will be to create jobs; c. Local Government of Pinrang Regency: economic growth

C. Execution and Implementation

 4. In which ways is the initiative creative and innovative?
Paksi Pinrang be unique from other region of investment policy for collecting 4 investment policy in an integrated package. For example, (1) Other Region have OSS and licensing service online system (SPIPISE) but do not have the local tax incentives (KID) and regional aid policy (KKD); (2) Other region offer guarantees of land and electricity but did not have one of these investment policies, it will hinder the investment process itself; and (3) Other region have a KID and KKD the region but do not have a policy of OSS and SPIPISE, it will hinder investment as long as the licensing process is not integrated with the Indonesian Investment Coordination Board (BKPM). Approaches were made to realize this innovation as follows: 1. Philosophical approach : covering public services will be successful if all stakeholders participate as regent commitment, Parliament, OPD, vertical Agencies, etc. 2. Sociological Approaches : covering public awareness of the importance of the development process by providing the land that will be used whenever possible do not generate high costs. 3. Juridical approach : covering investment policy-making, socialization, with a consistent policy implementation, and M & E.

 5. Who implemented the initiative and what is the size of the population affected by this initiative?
This innovation is implemented by the DPMPTSP since the Year 2012 by issuing Paksi Pinrang such as local tax incentives (KID), regional aid policy (KKD), one stop service (OSS), and licensing service online system (SPIPISE). DPMPTSP consists of four fields include: 1. Division of Development and Investment Promotion tasked to set up policies and promotion opportunities and investment potential in Pinrang; 2. Division of Data Processing and Information Systems in charge of setting up an online service system; 3. Division of Licensing Services tasked with licensing services quickly and thoroughly; and 4. Division of control for the implementation duty to direct and supervise the implementation of the investment. The measures used to ensure this successful innovations are: 1. The economic growth of at least 7% annually; 2. Absorbed 5-6% productive workforce in new jobs, or about 4,000 people annually; 3. Realized regional investment increased by 20% -30% annually; and 4. Regional investment interest increased 10-20% annually.
 6. How was the strategy implemented and what resources were mobilized?
Action plan of Paksi Pinrang, includes the following activities: 1. Introduction of Investment Opportunities a. One on One Meeting The meeting between the DPMPTSP with potential investors in an event BKPM or independently by inviting investors through Embassies targets. b. Investment promotion Good investment exhibition activities carried out at the local, provincial, national, and international. c. Temu Potential Investors The meeting, facilitated by local entrepreneurs to meet with potential investors. 2. Investment interest a. Prospective investors will expose to introduce our company profile and investment plans. b. The consultation meetings to discuss investment policies that will be given to potential investors related to investment plans. c. Field trips, to see firsthand the location of the investment plan. 3. Signing of Memorandum of Understanding (MoU) a. The drafting of a MoU to ensure the rights and obligations of each party, namely the Pinrang and Potential Investors, including time and place. b. The signing of a MoU between the Pinrang with Potential Investors. 4. Regional Aid Policy (KKD) a. Paksi Pinrang will provide data and information on investment opportunities such as data commodity, land, production, and so on. b. Paksi Pinrang can provide infrastructure such as road widening and pathfinding or access to the project, and so on. c. Paksi Pinrang could provide or facilitate land, such as the local government land (industrial area) with the Public Private Partnership system, facilitating the search of land that guaranteed cheap and safe, and so on. d. Paksi Pinrang can provide technical assistance, such as the supply of labor in the labor market online, training local manpower, etc. e. Paksi Pinrang will help accelerate licensing, such as charging and permits, both within the local government as well Pinrang Provincial and Central Government. 5. The One Stop Servive (OSS) a. Paksi Pinrang will simplify the number of licenses, such as disturbance permit, environmental permit, building permit, location permit, etc. b. Paksi Pinrang will simplify the document, such as potential investors simply provide a single document for all kinds of permissions needed. c. Paksi Pinrang will facilitate the licensing in the province and BKPM, such as the maintenance of Principle License (FDI), the import duty engines, etc. 6. Licensing Service Online System (SPIPISE) a. Paksi Pinrang would facilitate the potential investors to acquire online rights ases. b. Paksi Pinrang will facilitate the licensing through SPIPISE, such as input permission FDI through SPIPISE. c. Paksi Pinrang would facilitate the potential investors to acquire access rights investment activity report (LKPM) Online, such as input LKPM periodically conducted online. 7. Regional Tax Incentive (KID) a. Paksi Pinrang will provide reductions, waivers, or regional tax exemptions, such as land & build tax, the underground water tax, advertisement tax, etc. b. Paksi Pinrang will provide a reduction, relief or exemption levies, such as build permit, usiness licenses fisheries, etc. c. Paksi Pinrang will provide funds stimulants, such as seedlings or seeds or fertilizers to help farmers to increase productivity. d. Paksi Pinrang will provide capital assistance, such as aid to farmers' groups, etc. 8. Construction stages a. Ensure that the licensing documents and the environment and meets the requirements have been met. b. Ensure safety in the construction phase. 9. Commercial operation a. Ensure investors have had a project operating license in accordance with law. b. Ensure security during commercial operations. c. To provide guidance and oversight to investors on a regular basis.

 7. Who were the stakeholders involved in the design of the initiative and in its implementation?
Stakeholders or implementers Paksi Pinrang as follows: a. Regent Pinrang : Paksi initiator Pinrang b. DPMPTSP : investment policy design (4 policy) and ensures consistently implemented Paksi Pinrang c. Regional Organizations (OPD) : facilitation Paksi Pinrang such as infrastructure, regional tax incentives, guidance and supervision, and technical assistance / capital. d. Civil Society Organizations (CSOs): Paksi Pinrang ensure appropriate statutory provisions. e. Canadian International Development Agency and the Corruption Eradication Commission (KPK) : assistance (support) improved public services.

 8. What were the most successful outputs and why was the initiative effective?
Output Paksi Pinrang form of potential investors who are interested in investing in Pinrang as follows: a. Shipbuilding industry (ship repair - ship building): Investors Japanese (Tsuneishi Group) in collaboration with local entrepreneurs (PT. Baruga Asrinusa Development) to form a joint venture as an investor FDI. Needs 100 hectares of land, 450 billion investment plan (phase I), the absorption workforce of 3,000 people. b. Hydroelectric Power Plant (HEPP): Investor Malaysia in collaboration with national employers (PT. Mega Karya Energi) as a domestic investor for a capacity of 2 x 40 MW. 10 hectares of land requirement, the investment plan of 1.3 trillion rupiah (phase I), the absorption workforce of 1,000 people. Investors as well as SOEs namely PLN for hydroelectric power capacity of 2 x 65 MW land area of 5 hectares. c. Property development such as housing: there are 11 local investors (PT. Sarana Sukses Persada, PT. Hartha Mas Abadi, CV. Simple, PT. Faralindo Intama Sari, CV. Golden Queen, PT. Widya Tunggara Karya, CV. Ilham Jaya Batara, CV . Bambu Kuning Perkasa, CV. Pole Waliwali, PT. Sinergi Jaya land, and CV. Kalloloe) to use an average of 1-3 hectares of land, estimated total investment of 150 billion rupiah and labor absorption 30 -50 people per project. d. Commercial Facility Development (fuel depot): National Investor (PT. Bumi Sarana Migas) for the construction of fuel depot for the MFO, requires two hectares of land, plans investment of 15 billion rupiah, and the absorbance of a workforce of 50 people. e. Seaweed Processing Industry (carrageenan): Chinese Investors FDI (PT Biota Laut Ganggang) for development activities seaweed processing factory, needs 32 hectares of land, the realization of investment of 300 billion rupiah, and labor absorption of 400 people. f. Wood Processing Industry: Domestic (PT. Albasia Pinrang Sejahtera) for the construction of timber processing plant into plywood and exports to several countries, needs 5 hectares, the realization of investment of 150 billion rupiah, and labor absorption of 300 people.

 9. What were the main obstacles encountered and how were they overcome?
Obstacles or barriers in the implementation of Paksi Pinrang, include: a. Regional Tax Incentive Policy (KID), the main obstacle is a demand incentive that exceeds the provisions of the legislation, such as the United Nations exemption granted exemption for three years, but sometimes want a longer potential investors. Such cases will be approach to potential investors by offering relief payment of taxes or other levies, such Disturbance Permit, build permit. b. Regional Aid Policy (KKD), the main obstacle is the pricing of land by investors sometimes below market prices, for example, the market price of 25,000 rupiah / m2 but offered more below. Cases like this will do the negotiations with the land owners with local government facilities by offering other benefits. c. The One Stop Service (OSS), the main obstacle is licensing at the Central Government level that require considerable time and should under all relevant ministries. The solutions that we do through BKPM for facilitation to the relevant ministries. d. Licensing service online system (SPIPISE), the main obstacle is a disorder which result in slow data network licensing. The solution is to do a manual data input.

D. Impact and Sustainability

 10. What were the key benefits resulting from this initiative?
For examples of associated benefits for society Paksi Pinrang Pinrang: a. Shipbuilding industry, requires the employment of 3,000 people, of which 75% is required by local labor, means minimal public Pinrang 2,250 people will work on the project with the Provincial minimum wage (UMP) Rp. 2.500.000, - meaning a total of Rp. 48 Billion per year. The incentive is the UN exemption for 5 years or Rp. 2 billion / year, so it is very beneficial for the community Pinrang not include the goods and services sectors lainnya. b. Pabrik seaweed processing, requires 400 people, of which 75% is required by local labor, means that at least 300 people Pinrang work with UMP Rp. 2,500,000, meaning a total of 6.4 billion / year. UN exemption incentives provided for 3 years or Rp. 300 Million / Year and exemption permits interference.

 11. Did the initiative improve integrity and/or accountability in public service? (If applicable)
Paksi Pinrang born because of the issue of the integrity of public service covering issues of human resource competencies, service ethics, and indications of corruption. Paksi Pinrang have a transparent system through the online system so that no meeting between the community service officers. Competence of human resources continue to be developed through service execellence, personality training, and technical guidance services so that service personnel can provide excellent service. Service ethic supervised by their code of ethics that guide care workers in providing services. Efforts to avoid corruption done in various ways include the payment of taxes is done in banks, reducing public meeting with ministry officials, and signing the pact of integrity. Integrity and accountability of public services can be measured by: a. Community satisfaction survey conducted every six months with a minimum of 75% satisfaction rate. b. Diminishing public complaints on public services; c. No findings were made by the external auditors of government; and d. Surveying the integrity of public service by the Commission of at least the value of integrity 6.00

 12. Were special measures put in place to ensure that the initiative benefits women and girls and improves the situation of the poorest and most vulnerable? (If applicable)
Paksi Pinrang will prioritize local labor to work in the company at a minimum of 75% of the workforce of the total workforce of the company, in particular women and girls with the following measures: a. Signing the MoU with the company to employ women and anakn women for decent work in the company; b. Guidance and supervision by DPMPTSP each quarter; and c. Local tax Incentives for companies employing local women and girls.

Contact Information

Institution Name:   Regional Investment and One Stop Service Agency of Pinrang Regency
Institution Type:   Local Government  
Contact Person:   Nasruddin Muhamadong
Title:   Head of Division For Information system  
Telephone/ Fax:   +62421921695, +62811440304 (Tel), +62421921695
Institution's / Project's Website:  
Address:   Jalan Jenderal Sukawati Nomor 40
Postal Code:   91212
City:   Pinrang
State/Province:   South Sulawesi

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