Our company, which is a mineral mining company, intends to cooperate with contractors who will undertake the work of designing, supplying, and then carrying out construction work including stabilizing the location, land, and building foundations in order to build factory infrastructure at the mine site.
Contractors will provide construction equipment (cranes, etc.) and manpower for construction works, particularly those which will involve the preparation of materials, removals, installations of concrete, and other related works. The work is estimated to take around 3-4 months.
In relation to this matter, do contractors require special licenses (Construction Service Business License/ Mining Services Business License) in order to provide services to our company? Which type of business license is it according to the number in KBLI? What are the relevant regulations (after the enforcement of the Omnibus Law)?
DAFTAR ISI
INTISARI JAWABAN
Currently, provisions on business licensing are stipulated under Government Regulation 5/2021 which is referred to as risk-based business licensing.
In relation to your question, it is mentioned that contractors will be carrying out the construction work, therefore, according to our research, this is a civil mining building construction business type, with the code 42916 according to Indonesian Standard Industrial Classification (Klasifikasi Baku Lapangan Usaha Indonesia/ “KBLI”). What are the required business licenses?
Please read the review below for a further explanation.
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Risk-Based Business Licensing
It is important to note that the current guidelines for business licensing in Indonesia are stipulated under Government Regulation 5/2021, which is referred to as risk-based business licensing.
According to Article 1 Section (3) of Government Regulation 5/2021, risk-based business licensing is a business licensing based on the level of risk of business activities. Risk levels for business activities under Government Regulation 5/2021 are divided into:[1]
low-risk business activities;
medium-risk business activities, which are divided into:
low-medium risk level; and
medium-high risk level;
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KBLI for Civil Mining Building Construction Business
Furthermore, since you have mentioned that a contractor company will carry out the construction work, according to our research on the construction sector there is a provision of Article 80 Section (1) of Government Regulation 5/2021 which regulates:
Business Licensing within the public works and public housing sectors comprises the following subsectors:
construction services;
water resources; and
highway construction and maintenance.
These construction services include construction consultation services, construction works, or integrated construction works.[2]
Furthermore, in relation to your question regarding the Indonesian Standard Industrial Classification/ KBLI for the construction business which is listed under Appendix II of Government Regulation 5/2021, Legal Analyst & Content Easybiz, Syarief Toha explained that this business is a type of civil mining building construction with code 42916 according to KBLI. This business group encompasses the development, maintenance, and/or redevelopment of mining production operations and exploration facilities, including the control of environmental impacts.
According to KBLI code 42916, civil mining building construction is a medium to high-risk business that requires business licenses in the form of Business Identification Numbers (Nomor Induk Berusaha/ "NIB") and standard certificates.[3]
Summarized from Appendix III of Government Regulation 5/2021, there are several important aspects that should be considered by a medium-high-risk business, namely:
NIB and standard certificates as business licenses shall be used for the legality of the implementation of preparations to start a business;
Standard certificates are issued by the OSS system after business actors have made an independent statement in the OSS system.
The central government or regional governments will then verify the fulfillment of business activity standards prior to the company engaging in any commercial or operational activities. For certain activities, verification may be conducted in conjunction with the operational implementation of business activities.
Standards for the implementation of business activities must be fulfilled by business actors during the course of carrying out business activities. In addition, supervision will be carried out as well.
Therefore, in order to obtain a business license for the type of civil mining building construction business, that is classified as medium-high risk, instead of the Construction Service Business License or Mining Services Business License, an NIB and a standard certificate are required.
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These are the answers we can provide, we hope you will find them useful.
KBLI 42916, accessed on 19 May 2022, at 13.00 Central Indonesia Time (zone).
NB:
We have conducted an interview with the Legal Analyst & Content Easybiz, Syarief Toha, via WhatsApp on 18 May 2022, at 14.39 Central Indonesian Time (zone).
