Agricultural Potency of Purbalingga Regency

Purbalingga Regency is one of the 35 regencies in the Central Java Province. Located in its west side, geographical coordinates of Purbalingga are 7.10 o – 7.29 o S and 101.11 o – 109.35 o E. Purbalingga is about 77,764 hectare wide or 2.39 % from the total of the width of Central Java Province. Purbalingga is divided by 18 sub districts (third level autonomous region), 224 villages and 15 Kelurahan (fourth level autonomous region). Purbalingga is surrounded by Pemalang Regency in North, Banjarnegara Regency in the east and Banyumas Regency in the west and south.

In Purbalingga, the utmost use of land is in agricultural activities. It is about 43.273 hectare or 56.65% from the total width. The agriculture area is divided into several types of area: 18,311 hectare for the rice field, dry field for about 20,317 hectare, 4,532 hectare of mixed plantation, single plantation for about 16.4 hectare and 95.3 hectare of fishery.

Purbalingga area lay from the lowlands in the south with 42 meter height above sea level to highland in the north with 3.100 meter height. These unique differences cause wide climate variation and, as a result, promote diverse possibilities to develop various agriculture commodities.

Food crop commodities

Southern Purbalingga is lowlands and it is good to develop the food crop commodities such as grains and crops which are supported by its fertile soil; its nice climate and its sufficient water to irrigate the field. Food crops are mostly planted in sub districts of Bukateja, Kemangkon, Kalimanah, Padamara, and half of Kutasari and Bojongsari. Even in the higher area like sub district of Karanganyar, Kertanegara and Karangmoncol, the food crops could also grow well.

Rice

Rice is staple foods of almost all Indonesian people, including those living in Purbalingga. Paddy field has the widest land area for about 33,357 hectare. It produces in average 2.33 quintal per hectare and the total rice grains productions are 207,916 ton per year. Rice is also produced from different kind of irrigation technique, such as those produced from dry field. It is estimated that as many as 3,426 ton per year is acquired from 759 hectare. This rice grain production exceeds the need of house hold and industry which resulted in its success to produce surplus for about 30,000 ton per year.

Corn

The corn harvest area is about 9,841 hectare. The corn production in average is 31.81 quintal per hectare. The corn production in average is 31.81 quintal per hectare and the total corn production is about 31,302 ton per year. Ever since that corn is not a popular staple food in Purbalingga, people rarely consume it, rather, they use corn as cattle food. Given the fact, the chance to process corn into maize flour, popcorn and corn porridge is wide opened. Moreover, as corn’s production has not sufficiently met the needs of the consumption of household and industry, there might be wide possibilities to develop the capacity of its production in Purbalingga.

Cassava

The biggest cassava area is in sub districts of Pengadegan, Kejobong and Rembang. The total area is about 9,098 hectare. It produces in average 278.87 quintal per hectare with the total cassava production is about 253,716 ton per year. Cassava is mostly processed into tapioca flour and nearly half of them are consumed as or turned into traditional food.

Peanut

The total area is around 2,363 hectare. It produces in average 12.78 quintal per hectare, which is relatively smaller than other crops. It appears that because most of the farmers treat the peanut not as the primary crop, rather as an optional one. Peanut is the main goods of home industry, preferably snack and it’s by products can be utilized as cattle foods. The local peanut production has not met the market needs in Purabalingga.

Sweet Potato

The total area is 234 hectare. It produces in average 55.33 quintal per hectare. The total sweet potato production is 1,329 ton per year. Sweet potato is usually consumed as traditional food.

Soya bean

The total area is around 551 hectare. It produces in average 13.52 quintal per hectare and yielded 13.52 ton per year. Soya bean is processed into one of traditional foods with simple technology (tofu and tempe) and also the main goods of ketchup production. The soya bean production is still very low and the local production has not met the consumers need. Even worse, the production has not met the consumers need. Even worse, the production of tempe and tofu largely relies on imported white soya bean as its main goods. Given these circumstances, the possibilities to invest in soya bean plantation, either the white soya bean or the black one, is still wide open.

Horticulture

The horticulture crops are developed mostly in northern highland Purbalingga. The vegetables and fruits are planted in sub districts of Karangreja and half of that Mrebet.

Potato

The total area is 445 hectare. It produces in average 183.71 quintal per hectare with total potato production around 8,175 ton per year. Potato is the most wanted commodity due to its constant price and its higher margin. In addition to meet the need of local consumption, the potato is also traded in other regions, especially in big cities like Jakarta and Semarang.

Cabbage

The total area is 348 hectare. It produces in average 183.47 quintal per hectare with 6,524 ton total cabbage production per year. People use the cabbages as the main ingredient for vegetable soup. Cabbage produce experienced surplus and is traded to other regions.

Carrot

The total area is 198 hectare. It produces in average 194.04 quintal per hectare with 3,842 ton total carrot production per year.

Beans

The total area is 496 hectare. It produces in average 36.59 quintal per hectare and its total beans production is 1,815 ton per year.

Chili

The total area is 170 hectare. It produces in average 60.35 quintal per hectare and its total chili production is 1,026 ton per year.

Leek

The total area is 176 hectare. It produces in average 47.73 quintal per hectare with 840 ton total leek production per year.

Fruits

Half of Purbalingga area is really good to plant fruits. Several kinds of fruits are grown in Purbalingga, such as: orange, duku, durian, banana, and Salacca. The fruits are planted in the dry area surround sub districts of Kaligondang, Pengadegan, Kejobong and Bukateja.

Siem Orange

Siem orange is planted mostly in Bukateja. The siem orange total production is 127,203 quintal per year with 196,543 total productive crops.

Banana

Purbalingga has various types of banana. The banana total production is 89,884 quintal per year with 537,568 total productive crops.

Durian

The durian is grown in sub districts of Kemangkon, Kejobong and Pengadegan. With its specific taste, Purbalingga durian has its own merit if we compare with other regions’ durian. The durian total production is 52,226 quintal per year with 28,868 total productive crops.

Salacca

With total production crops, Salacca total production is 45,609 quintal per year. Purbalingga Salacca has similar taste with other regions’ produce.

Rambutan

As one of the exotic fruits which grow in tropical zone, rambutan is also well grown in Purbalingga. With 80,630 ton total production crops, rambutan total produce is 41,005 quintal per year.

Duku

Duku is one of Purbalingga prime fruits. Duku grows in specific region and not every region has duku as their specific fruit. With its unique taste, duku has been sold to big cities in Indonesia. The duku total produce is 33,604 quintal per year with 49,793 total productive crops.
Also, Purbalingga has small amount of produce of sour soup, mangosteen, pineapple, tan, mango, avocado and guava.

Plantation

Until recently, the plantation commodity in Purbalingga has not been well cultivated. The nature potency such as its fertile soil and its good climate has not been maximized. However, many peasants and the government have pioneered several kinds of plantation crops development, such as pepper, nilam, sugarcane, coconut, and Gambier jasmine.

Pepper

Purbalingga is the biggest exporter of pepper in Central Java. A percentage of 46% of pepper in Central Java market is produced in Purbalingga. Pepper is mostly cultivated in Pengadegan and Kejobong with 212.40 hectare total area and 307 ton total dry seed produce per year. The pepper plantation’s development is still open either in the on farm stage by increasing population and rising productivity or by means of processed goods. The pepper market chance in Indonesia or abroad is still wide opened.

Nilam

Nilam Commodity is needed by the market. Nilam is the main goods of perfume, soap and medicines. The total area is 607.10 hectare. The total production of dry nilam leaves are 5,039 ton per year. The export chance to international market is still open because the product is favoured mostly in Japan, India and Europe.

Dalam Coconut

Coconut tree is widely grown in almost every area of Purbalingga. People plant the coconut in every agricultural farm, plantation and village. Of 12,032 hectare of the total area, this sector can produce 12,366 ton copra per year. This coconut is the main goods of coconut oil production.

Deres Coconut

The half of the coconut produce in Pubalingga is aimed at producing the palm sugar. Of 5,168 hectare of the total area, Deres coconut produces 52,879 to of palm sugar per year. The development of deres coconut’s plantation is still open either in increasing the number of coconut trees or the implementation of modern technology in palm sugar processing in order to increase palm sugar productivity. Palm sugar industry also supports ketchup industry as the secondary industry of palm sugar commodity.

Sugarcane

As the main goods of sugar, the number of sugarcane crop in Indonesia is very low. Purbalingga, the sugarcane area is just 56 hectare with 215 to total production per year. The opportunity to invest more in Purbalingga is still open mostly for the dry sugarcane plantation. The sugarcane areas include sub districts of Kaligondang, Kemangkon, Mrebet and half of Bojongsari.

Gambier Jasmine

Gambier jasmine is planted in Bukateja with total area around 425.23 hectare and produces as many as 3.269 ton wet flower each year. This commodity promotes high economic value commodity but it needs specific soil and climate. For that reason, the Gambier jasmine can not well developed in other areas.

Source: Vision of Purbalingga, Drs. Triyono Budi Sasongko, M.Si.

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The Soil of Bali Island and Potentials for Farming

Soil texture is relative comparison of three major particle groupings in a soil mass. Singular grains are called soil particle whereas combinations of particles are called soil fractions. Clay fractions are soil fractions with very fine particles measuring (less than) < 0.002 mm. Silt fractions have a diameter of 0.002 – 0.05 mm while the biggest from is sand fractions with particle diameter of 0.05 – 2.0 mm. Soil mass particles can be made up of all three of these types of particles. Soil is considered having a rough texture where the mixture of particles is mainly sand and the proportion of the other particle types is negligible and can be ignored. In soil with medium texture the soil is dominated by silt particles and soil with a dominance of clay particles is classified as fine soil. These are the three simple soil texture classifications and these textures rarely vary. Because these characteristics are permanent these textures have become the basis for soil classification.

The soil of Bali Island is dominated by soil of medium texture and that only minor areas have fine or rough texture. Soils with fine texture can be found at Nusa Dua while soil with rough texture can be found on the island of Nusa Penida which is still a part of Klungkung Regency.

The Latosol soil type covers 44.59% of the total area of Bali and is found in Denpasar City and the Regencies of Badung, Tabanan, Jembrana, part of Karangasem, Buleleng and Klungkung. Latosol soil is soil that has undergone intensive breakdown and development of advanced soil. Specifications: this soil is shades of red raging from red to a reddish yellow or to reddish brown with a pH of $.5 – 6.5, with a fine to medium texture and a structure which is crumbly to slightly sticky, with deep permeability and soil fertility which is low to medium.

Regosol soil which covers 39.92% of the area of Bali Island is divided into volcanic ash regosol (found around volcanoes), regosol sand hills (along the beaches) and regosol sedimentary rock (found around folded hill topography). Generally, regosol soil type is rich in phosphorous and kalium but poor in nitrogen. However the phosphor and kalium are in form which is not ready to be absorbed by plants because they have not yet broken down so that this soil needs organic fertilizer in the form of animal droppings or compost to speed up its breakdown. The acidic level or pH of regosol is around 6 – 7. As it ages the structure and consistency become increasingly solid and even sometimes forms a layer with a porosity and drainage capacity that is restricted or in other words, difficult for water to pass through. Generally this regosol soil type has not yet formed an aggregate so that it is sensitive to erosion. In Bali regosol can be found in the regencies of Gianyar, Bangli, most of Karangasem, part of Klungkung, Boleleng and Denpasar.

Mediterranean soil is classified as red soil type that has undergone soil formation for a long period. This soil has an alkaline character with a pH of 5.5 – 8.0. This soil type contains hardened calcium and iron, has deep permeability and sticky structure but in spite of this has medium to high fertility. This kind of soil can be found at Nusa Penida and Nusa Dua.

Aluvial soil is land which has often or recently undergone a food so that it can be considered young and has not yet undergone horizontal differentiation. Because it has been formed by flooding the characteristic of the soil is depend on the level, origins and material types carried by the flood so that its level of fertility really depend on the material’s origins. Soil of this type only covers 4.87% of the land area of Bali and is mostly found in the western coastal areas.

The Andosol soil found around Lakes Buyan, Tamblingan and Brittan is of a type of Black soil. The word ando comes from the Japanese language and means dark or black. Andosol contains of high level of organic material with high carbon and nitrogen levels but a low level of phosphorous. Andosol has a high water absorption capacity so that it is always saturated if covered by vegetation. This soil type breaks up very easily but has resilient structure so that it is easy to handle. The high permeability is caused by the fact that it contains abundant micropores.

The interaction of soil and agroclimate

When it comes to growing things soil can become the sole factor in determining the suitability of an area for certain commodities. The interaction of soil and agroclimate which include the factor of air, humidity, light intensity and rainfall in the area become interacting factors that influence plant metabolism in order to produce the organs of a plant such as leaves, flowers and fruit. It’s the result of this metabolism which makes the final effect on the quality of a commodity and the taste of its fruit or vegetable.

The soil factor can be modified with soil treatment, fertilizing, applying lime and irrigation but the factor of climate can only be modified by building glass and plastics houses or shade houses to create a micro-climate around the plants. For the small farmer with limited capital these houses are of course not economical. The following is an explanation of how the interaction of soil and agroclimate in the regencies that makes them suitable for the planting of specific commodities.

Farming potentials of the Balinese soil and problems

A. Buleleng Regency

Buleleng Regency’s soils are dominated by Latosol and Regosol, and the area has a rainfall of 2.431 mm / year with an average temperature of 27 C making it an area that is potential for farming. Around 1975 Buleleng was making great headway with keprok Tejakula oranges (Tejakula being the name of the district in which they were grown). This condition was spurred on by the attack of the CVPD virus which destroyed orange trees in Java so that the numbers of trees in Buleleng reached 6 million trees. But in 1983/1984 the CVPD virus also attacked trees in Bali wiping them out completely. From then on there has been the development of grapes has spread in Buleleng so that until now Buleleng has become the centre for grape production in Bali.

Grapevines are suitable and grow well in areas from a height of 0 – 300 m above sea level, with temperatures of 25 – 31 C; a humidity of 40 – 80 %; rainfall 800 mm / year and in a sandy soil with a pH 6.5 – 7.0. If we see from the specifications for growth Buleleng should be suitable for growing grapes and the districts of Grokgak, Seririt and Banjar have become centres for grape growing. The problem faced by growers is attacks funguses in the wet season which result in the fall of fruit quality so that they fail to be competitive with imported grapes in the market. Beside this there is a lack of technology for turning the fruit into grape juice, raisins and other products. Wineries are also limited in number and these are mostly owned by foreigners. Formerly Buleleng was known for its rice which had nice flavor and texture and the emergence of vineyards has lead to a drop in its production so that it is difficult to find Buleleng rice in the market.

The village of Pancasari in Sukasada District of Buleleng Regency is a highland area on the shores of Lake Buyan and is most widely known for its strawberry production but this area also produces high quality, highland vegetables such as cauliflowers, cabbages, carrots, potatoes, and others. Strawberries (Fragaia veesca L) attain optimal growth in areas at a height of 1000 – 1500 m above sea level (asl), with a noon temperature of 22 – 25 C and overnight temperature of 14 – 18 C and with a humidity of 85 – 95 %. These condition need to be supported by porous soil with a high organic content and a pH of 5.8 – 6.5.

The soil around Lake Buyan is black, porous Andosol soil with high organic content and in combination with the height of Pancasari at 1.100 asl, a noon temperature of 23 – 26 C and night time temperature of 18 C it is in fact ideal for growing strawberries and it is not surprising that the strawberries in the supermarkets of Denpasar generally come from here. As well as this Chrysanthemums and orchids are also grown here. The orchid Phaphiopedilum and Cymbidium which cannot be grown in the low lands is brought to flower here sent to markets all over Bali, especially to Denpasar.

Buleleng Regency is also known for its production of Mangoes (Mangifera indica L.) The interaction of soil and agro climate make Buleleng very suitable for their growth and when the harvest time comes from October to June with its peak from November to December the mangoes of Buleleng dominate the supermarkets and traditional markets of Denpasar. It’s a pity that the farmer’s knowledge about the techniques for growing of commodities is not good because if the government were to provide impetus for the mango agribusiness Buleleng could become a major world producer of mangoes with suitable qualities and quantities.

B. Tabanan Regency

Tabanan Regency has medium textured Latosol soil, a rainfall of 2,723.5 mm / year an average temperature of 27 C and is the rice production centre of Bali as it produces 90% of Bali’s rice. Even though the area of rice fields in Bali has been reduced in the last 5 years, this area with its organized subak is still very productive especially in the Guama Subak in Marga District and the ‘Rejasa’nya subak in Penebel District which are both lowland areas and very suitable for rice production.

Tabanan Regency also has a highland area in Baturiti District which borders on Pancasari village in Sukasada District at a height of 1,100 m asl. This area is a centre for the production of highland vegetables of the Brassicaceae varieties such cauliflower, sawi, broccoli, cabbages and others. These highland vegetables, whether grown in Pancasari or Baturiti are facing the same problem of a reduction in quality caused by plant diseases and there is also a problem with the supply of seedlings. Only carrot seedlings can be produced locally and other seedlings must be bought at high prices from other countries. The problem of seeding production, especially for Brassicaceae varieties is a general problem in Bali as it is only possible to produce them with quality in areas with a high temperature fluctuation between night and day temperatures.

With soil and agroclimate conditions of Tabanan Regency it is also possible to plant mangostein (Garcinia mangostana L.). This flavored fruit with its unique shape is very popular everywhere making it an excellent prospect for export as a Balinese tropical fresh fruit.

C. Jembrana Regency

Jembrana Regency is an area dominated by medium textured Lasotol soil with an average annual rainfall 2,585 mm, a mean temperature of 28.4 C but until now it has not become known for the production of any specific commodity. In spite of this if we see the soil conditions and agro climate of the area are suitable for mixed cropping of corn and beans.

D. Karangasem Regency

Karangasem Regency is renown throughout Indonesia and the world as the area for the production of Salak Bali. This dry area having a rainfall of only 197 mm / year and average daily temperature of 27 – 50 C, and predominantly medium textured regosol soil has an agroclimate that is in fact highly suitable for the production of salak, especially the Salacca edulis salak which falls into the category of Palmae plant type.

As with other Palmae species the salak does not require intensive fertilizing as the salak only requires small amounts of organic fertilizers such as animal droppings. With prices for chemical fertilizers such as nitrogen, phosphate, and kalium being expensive this factor makes the salak really worthwhile for farmers. From the point of view of the environmentally friendly and prevents damage to the soil that would come from their use.

There are three salak producing areas in Karangasem including Duda, Manggis and Sibetan villages although Sibetan village is actually located in the District of Sidemen. It was from these villages that the Balinese salak first originated and which has now spread to other places in Bali. The interaction of agro climate and soil of an area are a specific factor in the production of commodity and it is for this reason that the Sibetan salak had a different flavor and was not as nice when it was tried in Pekutatan in Tabanan Regency.

Source: The Soil of Bali Island and Potentials for Farming by Rindang Dwiyani in Indonesian Geographical Expedition 2007, National Coordinating Agency for Survey and Mapping.

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Guide to Agricultural Investment and Trade Opportunities in Indonesia (5)

Immigration

Visa and Immigration Requirements

Tourists and business visitors from Argentina, Australia, Austria, Belgium, Brazil, Brunei, Canada, Chili, Chinese Taipei, Denmark, Egypt, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Jordan, Kuwait, Luxembourg, Malaysia, Maldives, Malta, Morocco, Mexico, Monaco, Netherlands, New Zealand, Norway, The Philippines, Saudi Arabia, Singapore, South Korea, Spain, Sweden, Switzerland, Hong Kong, / China, Thailand, Turkey, United Arab Emirate, United Kingdom, United State of America, Venezuela and Yugoslavia do not require visa for a maximum stay of 2 (two) months. In addition, tourists and business visitors from Hong Kong Special Administrative Region (SAR) and the Myanmar do not require visa for a maximum stay only of 2 (two) weeks. However, these visas are not extendable. The granting of free visa to business visitors is limited for the purpose of business investigations or discussions with their business relations. They are not permitted to conclude any business transaction, engage in local employment, and perform any professional or technical service. Visa is still required for visitors from countries which are not mentioned above.

Multiple-Journey Business Visas

Multiple-Journey Business Visa travel visa gives the bearer the right to make several entries to Indonesia within a period of 12 (twelve) months and each stay up 2 (two) months.

For business or tourist travelers of nationalities that have obtained the two months free visa on arrival, multiple-journey business visas are not necessary for stays within those two months.

Limited Stay Visas or Temporary Residents Visas

Limited stay visas are valid for three months to one year and are issued exclusively to experts for the national development and to expatriates who are involved in training or other educational or scientific programs in line with the prevailing government regulations. Direct dependents can also qualify for this type of visa.

Re-entry Permit

Non-citizens with residential status in Indonesia must have valid re-entry permits to re-enter Indonesia.

Environmental Protection

In 1990, the government established the environmental Impact Management Agency (BAPEDAL) and then, since 2002 this Agency merges into the Ministry of Environment which is responsible for the development and implementation of national policies and programs for environmental management particularly as they relate to urban and industrial pollution and hazardous waste management.

The ministry of Environment oversees a decentralized enforcement system (conducting environmental assessment) through the Regional Environment Management Agency (BAPEDALDA) and regional laboratories to ensure efficient monitoring of the implementation of environmental policies.


Business Entrance

Indonesia has been stipulated the new law No.: 25/2007 concerning Investment (in Indonesia), to meet the above Investment law Indonesia Government is preparing the derivates regulations.

For the transition, few fields of business activities are regulated by President Decree No. 96 of 2000 as amended by No. 118 of 2000. There are 11 (eleven) business activities closed for any investment (domestic as well as foreign / PMA) such as cultivation and processing marijuana, collection / utilization of sponges, Industries of harmful chemicals and chemical weapon, which are listed in the attachment-I of the mentioned decrees. There are 8 (eight) business activities and closed for PMA companies such as germ plasma cultivation, concessions for natural forest, which are listed in the attachment-II. In addition, there are 9 (nine) business activities opened on the condition of joint venture between foreign and domestic capital, such as developing and operating of harbor, electricity production, transmission and distribution, as listed in the attachment-III. List of business activities which are opened for investment if fulfilled certain condition of fish in fresh water, industries of pulp made of wood and ethyl alcohol.

The Indonesian Regulatory Environment

The Indonesian Investment Process

The Capital Investment Board (BKPM) has the responsibility to administer and grant investment application. BKPM issues licenses for both domestic (PMDN) and foreign investment (PMA).

Service and / or licensing convenience may be given and renewed in advance simultaneously and may be further renewed upon request of the investors in form of:

a. Hak Guna Usaha (leasehold) may be given for 95 (ninety-five) years and simultaneously renewed in advance for 60 (sixty) years, and it may be further for 35 (thirty-five) years.

b. Hak Guna Bangunan (building rights) may be given for 80 (eighty) years, and simultaneously renewed in advance for 50 (fifty) years, and it may be further renewed for 30 (thirty) years and

c. Hak Pakai (right of use) may be given for 70 (seventy) years, and simultaneously renewed in advance for 45 (forty-five) years, and it may be further renewed for 25 (twenty-five) years.

The government shall provide the same treatment to any investors originating from any countries making investment in Indonesia pursuant to the rules of law. Treatment set forth shall not apply to investor of certain countries that have received privilege by virtue of an agreement with Indonesia.

On-stop integrated service is meant to assist investor in obtaining service convenience, fiscal facility, and information about investment. One-stop integrated service shall be provided by authorized institution or agency. In investment sector that have been delegated or assigned by institution or agency possess the authority to issue licensing or non-licensing in a province or regency/city. Provisions on the method and implementation of such one-stop integrated service set forth shall be governed with presidential regulation.

The approval process today for foreign investors is easier than before 1997.

The professional adviser is highly recommended for any new company wishing to establish.

There are regional BKPM offices, which are located in provinces, known as BKPM also have responsibility for issuing licenses and approvals.

The investment Law (now under processed) eliminates many impediments and red neck investment procedures.

Source: Guide to Agricultural Investment and Trade Opportunities in Indonesia, Ministry of Agriculture, The Republic of Indonesia

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Agricultural Investment and Trade Opportunities in Indonesia (４)

Relevant International Agreement

Investment Guarantee and Protection Agreement

A number of governments provide investment guarantees to other nationals who make overseas investment in their countries. In most cases, these guarantees cover compensation in case of nationalization or expropriation, damages or losses caused by incidents of war, revolution or insurrection and payments for any approved remittance pursuant to the investment in case of non-convertibility of currency of the host country. To provide security for foreign investment, the Government of Indonesia concludes investment Guarantee Agreement (IGA) with ASEAN governments. Besides, Indonesia signed bilaterally the investment promotion and Protection Agreements with 55 countries, namely: Argentina, Algeria, Australia, Bangladesh, Belgium/Luxemburg, Cambodia, Chile, People Republic of China, Cuba, Czech Republic, Denmark, Egypt, Finland, France, Germany, Hungary, India, Italy, Jamaica, Jordan, Democratic People’s Republic of Korea, South Korea, Kyrgyzstan, People Democratic republic of Laos, Malaysia, Morocco, Mauritius, Mongolia, Mozambique, The Netherlands, Norway, Pakistan, The Philippines, Poland, Qatar, Romania, Singapore, Slovak Republic, Spain, Sri Lanka, Sudan, Suriname, Sweden, Switzerland, Syria, Thailand, Tunisia, Turkmenistan, Vietnam, Yemen and Zimbabwe.

To create a favorable international investment climate, Indonesia has also signed multilateral agreements, thereby promoting foreign direct investment in Indonesia. Indonesia is now a member of the Multilateral Investment Guarantee Agency (MIGA), which will protect investment against various political risks.

To deal with foreign investment disputes, Indonesia has become a signatory member of the investment Center on the Settlement of Investment Disputes (ICSID).

Intellectual Property Right

Indonesia has made a great progress on intellectual property protection since 1986. Indonesia is a member of the World Intellectual Property Organization and is party of certain sections of the Paris Convention for the protection of intellectual property. Pursuant to obligations under the Agreement on Trade-Related Aspect of Intellectual Property Right (TRIPs), one of the Uruguay Round Agreements, Indonesia has amended Patent Law, Copyrights Law and Trademark Law in 1997.

Patent

Indonesia’s first patent law entered into effect on August 1, 2001 by Law No. 14 of 2001. The Law and its implementing regulations outline patent consultants, and patent announcements. Products and production processes are in principle patentable subject to certain requirements. The Law provides protection for a period of 20 years for Patent and 10 years for Simple Patent, both of them can not be extended.

Trademarks

The first Indonesia’s trademark act took effect on April 1, 1993 but then it was replaced by Law No. 15 of August 2001. The act is intended to provide greater protection for well-known foreign and Indonesian marks, and to prohibit the use of deceptively similar marks. The act states that trademark right are determined on a first file basis rather than on a first uses basis. The trademark is filed and it can be extended. After registration, the trademark must actually be used in commerce. The detection of registered trademark from the general list trademark can be undertaken either by the trademark holder initiative or the trademark office if trademark is not used with in 3 years.

Copyright

In 1987 and 1997, the House of Representative – Dewan Perwakilan Rakyat (DPR) passed two amendments to the 1982 Copyright Law. The amended law affords protection to people’s creations on science, art and literature, expands the scope of coverage and rises the terms of protection for most categories of works to international standards. The copyright is valid for:

1. As long as the author’s life until 50 years from the date of death of author; for book, flyer, paper / write. Seminar, lecture, speech, and the like, performance (music, Java traditional music / karawitan, drama, dance, people or puppet performance / pewayangan, pantomime, choreography, created song or music with or without lyric, arts (painting, statue), batiks arts, architecture, map, translation, interpret, and excerpt, writing and work of arts.

2. 50 years from the date of the copyright notification, for broadcasting creation used such as on TV, radio, video, and movie, created song or music with or without lyric, recorded voice or sound, arts (painting statue); cinematography, computer program.

3. 25 years from date of copyright notification; for photography, computer programs, and cover design.

To be continued.

Source: Guide to Agricultural Investment and Trade Opportunities in Indonesia, Ministry of Agriculture, the Republic of Indonesia

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Agricultural investment and Trade Opportunities in Indonesia (3)

Indonesia's land legislations do not recognize the concept of freehold land rights. Instead the various right attached to the land are subdivided into separates titles.

The Basic Agrarian Law (Law no. 5 of 1960) recognizes type of rights on land of non-state-forest area, whereas state forest-area, the Law no 5 0f 1967 on forestry is applied. To foreign as well as domestic investor, the following three main rights are significant; the Land Cultivation Rights (Hak Guna Usaha, abbreviated as HSU), the Right of Building on Land (Hak Guna Bangunan, abbreviated as HGB) and the Right of Use on Land (Hak Pakai, abbreviated as HP). These rights authorize the use of land in some ways, and their differences are mainly on the duration of validity, the nature of utilization, the opportunity to mortgage (to use as asset or collateral) and proof of title:

1. The Land Cultivation Right (HGU) is the right to use a state Owned Land for the purposes of agriculture namely plantation, or cattle rising. By law the title is granted for maximum period of 35 years, but can be extended to 25 years is the land is properly used and managed. This title of right is given to Indonesian individual(s) or legal entities domiciled in Indonesia including PMA companies. It can be used as collateral or transferred to other party with the government approval.
2. The Right Building of the Land (HGU) is the right to construct and own building on a peace of land that one has purchased. The title is granted for a maximum period of 30 years and can be extended for maximum period for 20 years for Indonesian individual(s) and / or legal entities domiciled in Indonesia including PMA companies. It can be used as collateral or transferred to other party. This is also applicable and generally granted to tenants in Industrial estates.
3. Right of Use on Land (HGB) is the right to use land for a specific purpose and granted for a period of 25 years and can be extended for period of 20 years or as long as the land is used for certain (normal) utilization. Now, this right can also be used as a mortgage. In addition, it can also be transferred to other party through a government approval.

Dwelling House or a residence that can be owned by a foreign person shall be :
1. A separate house constructed on a piece of land with the right of utilization on state land or controlled on the basis of an agreement with a land holder: or,
2. An apartment constructed on a piece of land with the right of utilization on state land.

Foreign investors who obtained mining contract from the minister of Mines and Energy or the respective Governor / the District Head or forest exploitation rights and or plantation right from the Ministry of Agriculture or the Respective Governor / District Head could automatically use the land within their business license. In case investors want to use the land for different purposes, special applications should be submitted to the Ministry or the respective Governor / District Head concerned. These rights have no collateral value to the owner.

To be continued.

Source: Guide to Agricultural Investment and Trade Opportunities in Indonesia, Ministry of Agriculture, the Republic of Indonesia

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