21 Oct 2016
AMENDMENT TO NUISANCE PERMIT REGULATION

The Minister of Home Affairs has recently enacted Regulation No. 22 of 2016, resulting in an amendment of Regulation of the Minister of Home Affairs No. 27 of 2009 on Guidelines for the Granting of Regional Nuisance Permits. This amendment is part of President Joko Widodo’s policy to reduce the number of required business permits/licenses to start a business.

The amendment results in two important changes. While under Regulation No. 27/2009 environmental criteria were relevant, under Regulation No. 22/2016, the application for a Nuisance Permit is only assessed on the basic of social and economical criteria. Furthermore, Regulation No. 22/3016 exempts upstream oil and gas businesses from the requirement to obtain the Nuisance Permit.

A Nuisance Permit is now required for all business activities except for:

1. Activities located in Industrial Zones (Kawasan Industri), Bonded Zones (Kawasan Berikat), and Special Economic Zones (Kawasan Ekonomi Khusus);
2. Activities in a building which already obtained a Nuisance Permit;
3. Activities of Micro and Small Businesses located in a building or on a parcel of land which will not have an impact outside said building or parcel of land;
4. Upstream oil and gas business activities.

An applicant may submit an application for a Nuisance Permit to the regional government agency (SKPD) in the relevant city or regency or, in case of Special Capital Region of Jakarta, the province. The Nuisance Permit is valid as long as the business activities continue, although in several Regional Regulations (Peraturan Daerah) the Nuisance Permit is subject to periodic renewal.

The applicant must complete the application form, submit a copy of the Resident Identity Card (Kartu Tanda Penduduk), in case of an individual applicant, or a copy of the deed of establishment (Akta Pendirian), in case of a legal entity, and submit a copy of land ownership title. The requirements to apply for the Nuisance Permit is also subject to the relevant Regional Regulations, hence additional documents or forms may be required to be submitted or completed. The application for the Nuisance Permit is also subject to additional fees as may be set out in the relevant Regional Regulations.

Regulation No. 27/2009 provides that the Nuisance Permit should be issued within 15 business days after the application is declared to be complete and correct. In case this term is not met by the regional government, the application is deemed to have been accepted. Again, regions may set shorter timelines. In Jakarta, for example, the Governor of DKI Jakarta should issue the Nuisance Permit within 10 business days after the application is declared to be complete and correct.

Regulation No. 27/2009 does not formulate sanctions for the violation of the Nuisance Permit provisions. Instead, it delegates the power to formulate administrative sanctions to the relevant Mayor, Regent and Governor of DKI Jakarta. Depending on the prevailing regulations in the relevant regions, the sanctions could consist of a written warning, fines, and a suspension of business activities.

Regulation of the Minister of Home Affairs No. 22 of 2016 came into force on 2 May 2016. (By: Adithya Lesmana)