GOVERNMENT REGULATION OF THE REPUBLIC OF INDONESIA

NUMBER 29 OF 2018
CONCERNING
INDUSTRIAL EMPOWERMENT

BY THE GRACE OF GOD ALMIGHTY

PRESIDENT OF THE REPUBLIC OF INDONESIA

Considering :
that to implement the provisions of Article 76, Article 83, Article 84 paragraph (9), Article 86
paragraph (3), Article 90, and Article 95 of Law Number 3 of 2014 concerning Industry, it is
necessary to stipulate Government Regulations on Industrial Empowerment.

In view of :
1. Article 5 paragraph (2) of the 1945 Constitution of the Republic of Indonesia;
2. Law Number 3 of 2014 concerning Industry (State Gazette of the Republic of
Indonesia of 2014 Number 4, Supplement to the State Gazette of the Republic of
Indonesia Number 5492).

DECIDES:

Establish: GOVERNMENT REGULATION CONCERNING INDUSTRIAL

EMPOWERMENT.

CHAPTER I
GENERAL PROVISIONS

Article 1
In this Government Regulation what is meant by:
1. Industry is an order and all activities related to Industrial activities.
2. Industry is all forms of economic activities that process raw materials and / or utilize
industrial resources so as to produce goods that have higher added value or benefits,
including industrial services.
3. Industrial Empowerment is a planned, directed and measurable policy and effort of
the Central and Regional Government to enable and empower Industry players in a
participatory manner to increase competitiveness.
4. Small and Medium Industries, hereinafter referred to as IKM, are industrial
companies whose business scale is determined based on the number of workers and
investment value by the Minister as Small and Medium Industry.
5. Green Industry is an industry which in its production process prioritizes efficiency and
effectiveness of sustainable use of resources so as to be able to harmonize industrial
development with the preservation of environmental functions and can provide
benefits to the community.
6. Strategic Industry is an industry that is important to the state and that controls the
livelihoods of many people, increases or produces added value for strategic natural
resources, or has a connection with the interests of defense and state security in the
context of fulfilling the duties of the state government.
7. Raw materials are raw materials, semi-finished goods, or finished goods that can be
processed into semi-finished goods or finished goods that have a higher economic
value.
8. IKM Center is a group of SMEs in one location / place consisting of at least 5 (five)
business units that produce similar products, use similar raw materials, and / or carry
out the same production process.
9. Partnership is the collaboration of business activities both among IKMs and with large
industries and / or other economic sectors based on the principle of mutual need and
mutual benefit.
10. The Technical Services Unit is a work unit in the ministry that organizes government
affairs in the field of Industry that are professionally managed with non-profit
principles that have the duty and function of providing services to companies or
business actors of IKM in the context of fostering and developing IKM, including the
growth of new entrepreneurs or entrepreneurs .
11. Field Extension Workers, hereinafter referred to as TPL, are people who have certain
expertise assigned based on work agreements or appointments as permanent
employees with the function as facilitators, motivators, communicators, initiators and
dynamists to guide and assist business development and overcome problems faced
by business actors IKM.
12. IKM Consultants are individuals or groups that already have competency certificates
and have been recorded in the ministry that organizes government affairs in the
industrial sector to provide IKM consultancy services.
13. Apprenticeship is a learning and training activity that is followed by IKM and IKM
coaches carried out in more advanced companies, institutions, or educational
institutions within a certain period of time to improve knowledge, expertise, skills and
insights.
14. Mentoring is supervision activities to help improve the technical and managerial
capabilities of IKM companies that are carried out continuously within a certain period
of time.
15. Industrial Entrepreneurial Incubator is an intermediary institution that carries out an
incubation process for incubation participants (tenants) in the Industrial field.
16. An industrial company is any individual or corporation that carries out activities in the
industrial business sector domiciled in Indonesia.
17. Industrial type is a part of an industrial branch that has the same special
characteristics and / or results that are final in the production process, which are
determined according to classification in the standard classification of Indonesian
business fields.
18. The Green Industry Standard is the standard for realizing the Green Industry set by
the Minister.
19. Green Industry Certification is a series of activities to issue certificates to Industrial
Companies in fulfilling Green Industry Standards.
20. A Green Industry Certificate is an acknowledgment given by a Green Industry
Certification agency to declare that an Industrial Company has met the Green
Industry Standards.
21. Domestic Products are Goods and Services, including design and engineering, which
are produced or worked by companies that invest and produce in Indonesia, use all
or part of the workforce of Indonesian citizens, and the process uses Raw Materials
or components which are wholly or partly derived from domestic.
22. Goods are any objects both tangible and intangible, movable or immovable, to be
used or traded by users of goods.
23. Services are services of work carried out by service providers, which include
construction services including integrated construction services, consulting services,
and other services.
24. Level of Domestic Component, hereinafter referred to as TKDN, is the amount of
domestic content in goods, services, and combined goods and services.
25. Weight of Company Benefits is the value of awards given to Industrial Companies
that invest and produce in Indonesia.
26. Verification is the activity of calculating TKDN value of goods / services and value of
company benefit based on data taken or collected from business activities of goods
manufacturers, service companies, or providers of combined goods and services.
27. Price Preference is the value of price adjustment to the bid price in the final
evaluation price process in the procurement of goods / services.
28. International Cooperation in the Field of Industry is a form of cooperative relations
carried out across national borders in the context of national Industry development by
the Central Government, business entities, community organizations, or Indonesian
citizens.
29. Global Supply Chain is a system of organizations, people, activities, information, and
resources used in producing and distributing goods and services products from
suppliers to customers globally.
30. Industry Officials Abroad are officials of the Industry sector who come from ministries
that carry out government affairs in the field of Industry that are placed and assigned
abroad.
31. The Central Government is the President of the Republic of Indonesia who holds the
executive power of the Republic of Indonesia, assisted by the Vice President and
ministers referred to in the Constitution of the Republic of Indonesia Year 1945.
32. Local Government is the head of the official elements of the Regional Government
which led the implementation of governmental affairs authority of the autonomous
region.
33. The Minister is the minister who organizes government affairs in the field of Industry.

Article 2
The scope of regulation in this Government Regulation includes:
a.​ ​strengthening institutional capacity and providing facilities to IKM;

b.​ ​Green Industry;

c.​ ​Strategic Industry;

d.​ ​increased use of Domestic Products; and

e.​ ​International Cooperation in the Field of Industry.

 CHAPTER II
STRENGTHENING INSTITUTIONAL CAPACITY AND GIVING FACILITIES TO SMALL
AND MEDIUM INDUSTRIES

Part One
General

Article 3
1. The Central Government and / or the Regional Government shall carry out
development and empowerment of the IKM to realize the IKM which is:
a. competitive;
b. play a significant role in strengthening the structure of the national industry;
c. play a role in alleviating poverty through expanding employment opportunities;
and
d. produce industrial goods and / or services for export.
2. To realize the IKM as referred to in paragraph (1) is carried out:
a. formulation and stipulation of policies;
b. strengthening institutional capacity; and
c. provision of facilities.
3. Strengthening institutional capacity as referred to in paragraph (2) letter b and giving
facilities as referred to in paragraph (2) letter c refers to the policy as referred to in
paragraph (2) letter a.

Part Two
Strengthening Institutional Capacity

Article 4
Strengthening institutional capacity as referred to in Article 3 paragraph (2) letter b
shall at least be carried out through:
a. enhancing the capability of IKM Centers, Technical Service Units, TPL, and
IKM Consultants; and
b. cooperation with educational institutions, research and development
institutions, and industry associations and related professional associations.

Article 5
1. Increasing the capability of the IKM Center as referred to in Article 4 letter a shall be
carried out at least by:
a. establishing IKM Centers;
b. facilitate the formation of management;
c. enhance the ability of business activities; and
d. establishing a Technical Service Unit.
2. Provisions regarding the procedure for establishing a Technical Service Unit as
referred to in paragraph (1) letter d are regulated in a Ministerial Regulation.
 Article 6
1. Increasing the capacity of the Technical Service Unit as referred to in Article 4 letter a
shall be carried out by means of:
a. optimization and / or restructuring of machinery / equipment;
b. organizational development and working procedures of the Technical Service
Unit;
c. increase in human resources; and / or
d. ​network expansion.
2. Provisions regarding the development of the organization and working procedures of
the Technical Service Unit as referred to in paragraph (1) letter b are regulated in a
Ministerial Regulation.

Article 7
1. Increasing the ability of TPL and IKM Consultants as referred to in Article 4 letter a
shall be carried out by means of:
a. education and training;
b. Apprenticeship; and / or
c. competency certification.
2. Provisions regarding the procedures for education and training, apprenticeship, and
competency certification as referred to in paragraph (1) are regulated in a Ministerial
Regulation.

Article 8
1. If the number of TPL or IKM Consultants for an area is insufficient, the Central
Government and / or Regional Government can hold the procurement of TPL or IKM
Consultants from other regions.
2. Further provisions regarding the procurement of TPL and IKM Consultants as
referred to in paragraph (1) are regulated in a Ministerial Regulation.

Article 9
Cooperation with educational institutions as referred to in Article 4 letter b is carried
out at least including:
a. education and training;
b. establishment of Industrial Entrepreneurial Incubator;
c. survey and market research; and / or
d. utilization of research results.

Article 10
1. Cooperation with research and development institutions as referred to in Article 4
letter b is carried out at least including:
a. identification of technical and managerial problems;
b. identification of machine and equipment needs;
c. design and product development;
d. laboratory utilization;
e. survey and market research;
f. utilization of research results; and / or
 g. competency certification.
2. The research and development institution as referred to in paragraph (1) is an
accredited research and development institution.

Article 11
1. Cooperation with Industry associations as referred to in Article 4 letter b is carried out
at least including:
a. development of the IKM Sentra product market;
b. technology transfer to IKM and Technical Service Unit;
c. human Resource Development;
d. Apprenticeship;
e. Assistance to IKM Centers and Technical Service Units; and / or
f. opening access to sources of Raw Materials for IKM Centers.
2. Industry Association as referred to in paragraph (1) is an association that has a deed
of establishment and articles of association made by or in the presence of a notary.

Article 12
1. Cooperation with professional associations as referred to in Article 4 letter b is carried
out at least including:
a. transfer of technology to IKM Centers and Technical Service Units;
b. human Resource Development;
c. survey and research; and / or
d. Mentoring to IKM Centers and Technical Service Units.
2. Professional associations as referred to in paragraph (1) are associations that have a
deed of establishment and articles of association made by or before a notary.

Part Three
Provision of Facilities

Article 13
Provision of facilities as referred to in Article 3 paragraph (2) letter c shall be given in
the form of:
a. increasing the competence of human resources and competency certification;
b. technical assistance and guidance;
c. assistance of Raw Materials and auxiliary materials;
d. assistance of machinery or equipment;
e. product development;
f. assistance in preventing environmental pollution to realize the Green Industry;
g. market information, promotion and marketing assistance;
h. access to finance, including the provision of initial capital for new
entrepreneurs;
i. provision of industrial estates for SMIs that have the potential to pollute the
environment; and / or
j. development, strengthening of linkages, and relations of Partnerships
between Small Industries and Medium Industries, Small Industries with large
 Industries, and Medium Industries with large Industries, as well as IKM with
other economic sectors with the principle of mutual benefit.

Article 14
1. Provision of facilities in the form of increasing the competence of human resources
as referred to in Article 13 letter a shall be carried out by means of the provision of
education and training.
2. Education and training as referred to in paragraph (1) are carried out based on
learning needs, goals and objectives.
3. Education and training includes technical education and training and managerial
education and training.
4. Education and training is organized by the Central Government, Regional
Governments, and / or in collaboration with accredited educational institutions.
5. The costs of education and training come from the state budget and expenditure,
regional income and expenditure budgets, and / or other legitimate and non-binding
funding sources.
6. Further provisions regarding the procedures for carrying out the improvement of the
competence of human resources are regulated in a Ministerial Regulation.

Article 15
1. Provision of facilities in the form of competency certification as referred to in Article
13 letter a is carried out by facilitating business actors and / or IKM workers to take
competency tests in accordance with their fields of work and duties.
2. Competency testing in accordance with the field of work and duties as referred to in
paragraph (1) is carried out based on Indonesia's national work competency
standards.
3. Provision of facilities as referred to in paragraph (1) in the form of assistance in the
cost of competency testing.
4. Competency test as referred to in paragraph (2) is carried out by a professional
certification institution that has obtained a license from the National Professional
Certification Agency.
5. Cost assistance as referred to in paragraph (3) originates from the state revenue and
expenditure budget, regional income and expenditure budget, and / or other
legitimate and non-binding funding sources.
6. Provisions regarding the terms and procedures for providing cost assistance to
participate in the competency test are regulated in a Ministerial Regulation.

Article 16
1. Provision of assistance and technical guidance facilities as referred to in Article 13
letter b is carried out by apprenticeship and assistance.
2. The provision of facilities as referred to in paragraph (1) is given to business actors
and / or IKM workers.
3. The apprenticeship and accompaniment fees as referred to in paragraph (1) originate
from the state revenue and expenditure budget, regional income and expenditure
budget, and / or other legal and non-binding funding sources.
 Article 17
1. Apprenticeships as referred to in Article 16 paragraph (1) are carried out by placing
business actors and / or IKM workers in more advanced Technical Service Units and
/ or Industrial Companies.
2. Apprenticeship as referred to in paragraph (1) includes:
a. business management;
b. mastery of technology;
c. production process and layout of machines / equipment;
d. quality system and quality standards;
e. product design; and / or
f. packaging design.
3. Apprenticeship as referred to in paragraph (1) is carried out in accordance with the
needs of business actors and / or IKM workers.
4. Further provisions regarding the conditions and procedures for administering
apprenticeship are regulated in a Ministerial Regulation.

Article 18
1. Assistance as referred to in Article 16 paragraph (1) is carried out by placing experts,
TPL, and / or IKM Consultants on IKM business units and / or IKM Centers.
2. Assistance as referred to in paragraph (1) includes:
a. business management;
b. mastery of technology;
c. production process and layout of machines / equipment;
d. quality system and quality standards;
e. product design;
f. packaging design; and / or
g. intellectual property rights.
3. Further provisions regarding the conditions and procedures for administering
Mentoring are regulated in Ministerial Regulations.

Article 19
1. Provision of facilities in the form of assistance of Raw Materials and auxiliary
materials as referred to in Article 13 letter c is given:
a. based on the scheme of supplying Raw Materials and auxiliary materials;
b. through service units for Raw Materials and auxiliary materials; and / or
c. through the introduction of the use of Raw Materials and alternative auxiliary
materials.
2. In addition to the provision of facilities as referred to in paragraph (1), assistance for
Raw Materials and auxiliary materials can be provided directly to Small Industries.
3. The provision of facilities as referred to in paragraph (1) and paragraph (2) is given to
IKMs that face obstacles and problems in the number, quality or sustainability in the
procurement of Raw Materials and auxiliary materials.
4. Funding for the provision of facilities as referred to in paragraph (1) and paragraph
(2) originates from the budget of state revenues and expenditures, regional income
and expenditure budgets, and / or other legal and non-binding funding sources.
 Article 20
1. Provision of facilities based on the scheme for the supply of Raw Materials and
auxiliary materials as referred to in Article 19 paragraph (1) letter a is carried out
through cooperation in the provision of Raw Materials between the Central
Government and / or Regional Government with providers of Raw Materials and IKM.
2. Further provisions regarding the provision of facilities based on the scheme for
supplying Raw Materials and auxiliary materials are regulated in a Ministerial
Regulation.

Article 21
1. The Central Government and / or the Regional Government establish and manage
service units for Raw Materials and auxiliary materials as referred to in Article 19
paragraph (1) letter b.
2. The location of the Raw Material and auxiliary material service units as referred to in
paragraph (1) is determined by taking into account the potential of the IKM Center
and its development plan.
3. The service unit for Raw Materials and auxiliary materials as referred to in paragraph
(1) can carry out initial processing to prepare Raw Materials.
4. Further provisions regarding the establishment and management of service units for
Raw Materials and auxiliary materials as referred to in paragraph (1), paragraph (2),
and paragraph (3) are regulated in a Ministerial Regulation.

Article 22
1. The introduction of the use of alternative raw materials and auxiliary materials as
referred to in Article 19 paragraph (1) letter c shall be carried out by testing
alternative raw materials and auxiliary materials in the IKM company.
2. Alternative raw materials and auxiliary materials as referred to in paragraph (1) come
from research results that have been tested using local and national resources.
3. Further provisions regarding the introduction of the use of alternative Raw Materials
and auxiliary materials as referred to in paragraph (1) and paragraph (2) are
regulated in a Ministerial Regulation.

Article 23
1. Provision of machine or equipment assistance facilities as referred to in Article 13
letter d shall be carried out in the framework of increasing the productivity, quality and
/ or variety of products.
2. The provision of machine or equipment assistance facilities as referred to in
paragraph (1) is carried out by:
a. direct giving; or
b. discount the purchase price of a machine or equipment.
3. Machine or equipment assistance facilities through direct giving as referred to in
paragraph (2) letter a are given to small industry joint business groups that still use
equipment with traditional / manual technology.
4. Machine or equipment assistance facilities through price discounts as referred to in
paragraph (2) letter b can be given in the current year or the following year.
 Article 24
1. Ministers, governors, and / or regents / mayors verify the requests for machinery and
equipment assistance facilities as referred to in Article 23.
2. In conducting verification as referred to in paragraph (1), the Minister, governor or
regent / mayor may appoint or working with independent institutions.
3. Independent institutions as referred to in paragraph (2) can be in the form of research
and development institutions, universities, and / or other institutions that have
competencies according to their needs.
4. Further provisions regarding the provision of machinery and equipment assistance
facilities as referred to in Article 23 and in paragraph (1), paragraph (2), and
paragraph (3) are regulated in a Ministerial Regulation.

Article 25
1. Provision of product development facilities as referred to in Article 13 letter e is given
to IKM which are included in the priority of developing IKM in the context of
diversification, downstreaming, or standardization of products.
2. Provision of product development facilities as referred to in paragraph (1) in the form
of:
a. product research and development assistance;
b. promotion of technology transfer;
c. product design assistance;
d. packaging design assistance;
e. manufacture of product prototypes; and / or
f. market trials.
3. In addition to the facilities as referred to in paragraph (2), facilities for small industries
can be provided:
a. providing consultancy, guidance, advocacy and protection of intellectual
property rights; and / or
b. certification guidance and facilitation assistance for Indonesian National
Standards, technical specifications and / or procedural guidelines, and other
quality standards.
4. The provision of facilities as referred to in paragraph (2) and paragraph (3) is carried
out through cooperation with research and development institutions, product
certification bodies, or other institutions.
5. Cooperation as referred to in paragraph (4) is funded by the Central Government,
Regional Government, and / or other institutions either alone or jointly with IKM
companies.
6. Provisions regarding the criteria and procedures for granting product development
facilities are regulated in a Ministerial Regulation.

Article 26
1. Provision of assistance for the prevention of environmental pollution to realize the
Green Industry as referred to in Article 13 letter f is given by means of:
a. assistance in the formulation of efforts for environmental management, efforts
to monitor the environment, and a statement of ability to manage and monitor
the environment;
 b. guidance and provision of information on the application of environmentally
friendly production;
c. organizing joint waste water management; and / or
d. Green Industry Certification.
2. Assistance facilities for preventing environmental pollution to realize the Green
Industry as referred to in paragraph (1) are given to SMIs that have the potential to
cause environmental pollution.
3. Assistance in the formulation of environmental management efforts, environmental
monitoring efforts, and a statement of ability to manage and monitor the environment
as referred to in paragraph (1) letter a and guidance and provision of information on
the application of environmentally friendly production as referred to in paragraph (1)
letter b is implemented through cooperation with research and development
institutions, environmental consultants, or other experts who have the competence in
implementing environmentally friendly production and the Green Industry.
4. The implementation of joint waste water management as referred to in paragraph (1)
letter c is implemented by the Regency / City Regional Government.
5. The Central Government or Provincial Government can assist Regency / City
Governments in the management of shared wastewater as referred to in paragraph
(4) at the request of the Regency / City Government.
6. The Minister determines the IKM which has the potential to cause environmental
pollution as referred to in paragraph (2).

Article 27
1. Provision of market, promotion and marketing information assistance facilities as
referred to in Article 13 letter g is given by:
a. providing data and / or information on market opportunities;
b. providing promotional facilities and participation in exhibitions and other
promotional forums;
c. business meeting; and / or
d. innovative and creative product competitions.
2. Further provisions regarding the provision of market information, promotion and
marketing assistance facilities as referred to in paragraph (1) are regulated in a
Ministerial Regulation.

Article 28
Provision of financing access facilities as referred to in Article 13 letter h is carried out
by:
a. providing information on financing schemes; and
b. preparation of business feasibility studies.

Article 29
1. Provision of initial capital provision facilities for new entrepreneurs as referred to in
Article 13 letter h aims to provide an opportunity to start business activities.
2. The provision of facilities as referred to in paragraph (1) is given at most 1 (one) time
by means of:
 a. investment in the form of machinery, equipment, and / or production
technology including software; and / or
b. working capital in the form of Raw Materials, auxiliary materials, and / or
leases of business premises no later than 3 (three) years.
3. The provision of initial capital provision facilities for new entrepreneurs as referred to
in paragraph (1) is given to new entrepreneurs of Small Industries who are
participants of the Central Government program and / or Regional Government.
4. New Entrepreneurs of Small Industries who want to get initial capital provision
facilities must submit an application by attaching a business plan.
5. The Central Government and / or Regional Government assigns an expert team to
evaluate the business plan and provide recommendations on the needs and amount
of initial capital needed.
6. Provisions regarding the programs of the Central Government and Regional
Governments to grow new entrepreneurs in Small Industries, the determination of
criteria, quantities, procedures and procedures for granting initial capital for new
entrepreneurs are determined by the Minister, governor, and regent / mayor.

Article 30
1. Provision of industrial estate provision facilities for SMIs that have the potential to
pollute the environment as referred to in Article 13 letter i shall be carried out by
means of:
a. relocation of SMEs that have the potential to cause environmental pollution in
existing industrial zones; and / or the
b. construction of industrial estates for SMIs that have the potential to cause
environmental pollution.
2. Relocation of SMIs that have the potential to cause environmental pollution in
industrial estates as referred to in paragraph (1) letter a is carried out by the Regency
/ City Regional Government.
3. Construction of industrial estates as referred to in paragraph (1) letter b is
implemented in accordance with the provisions of the legislation.

Article 31
1. Provision of development facilities, linkage strengthening, and the relationship of
partnerships between Small Industries and Medium Industries, Small Industries with
large Industries, and Medium Industries with large Industries, as well as IKM with
other economic sectors with the principle of mutual benefit as referred to in Article 13
letter j shall be conducted by way of:
a. business meeting activities;
b. assistance in preparing proposals, contracts, and / or profiles; and
c. other facilities necessary to establish partnership relations in accordance with
the provisions of the legislation.
2. Further provisions regarding the relationship of Industrial Partnership are regulated in
Ministerial Regulations.

CHAPTER III
GREEN INDUSTRY
 Part One
Standardization of the Green Industry

Article 32
Standardization of the Green Industry consists of:
a. Green Industry Standards; and
b. Green Industry Certification.

Article 33
Green Industry Standards as referred to in Article 32 letter a shall at least contain
provisions concerning:
a. Raw materials, auxiliary materials, and energy;
b. production process;
c. product;
d. business management; and
e. waste management.

Article 34
1. Raw materials and auxiliary materials as referred to in Article 33 letter a must be
used efficiently and effectively by seeking the use of Raw Materials and renewable
auxiliary materials.
2. Energy as referred to in Article 33 letter a must be used efficiently and effectively by
seeking the use of new and renewable energy.
3. The production process as referred to in Article 33 letter b is carried out by optimizing
the performance of the production process.
4. Products as intended in Article 33 letter c must meet the quality requirements,
including the packaging.
5. Business management as referred to in Article 33 letter d must adopt the applicable
management system.
6. Waste management as referred to in Article 33 letter e must use effective technology
to meet environmental quality standards.

Article 35
1. The Minister prepares the Green Industry Standards as referred to in Article 33
based on Industrial Types according to the standard classification of Indonesian
business fields.
2. The preparation of the Green Industry Standard as referred to in paragraph (1) is
carried out in coordination with the relevant ministries and / or non-ministerial
government institutions, Industry associations, Industrial Companies, and / or related
institutions.
3. The preparation of the Green Industry Standard as referred to in paragraph (1) and
paragraph (2) is carried out based on the guidelines stipulated by the Minister.
 Article 36
1. The application of the Green Industry Standards as referred to in Article 33 can be
applied gradually.
2. The enactment of mandatory Green Industry Standards as referred to in paragraph
(1) is carried out by considering:
a. availability of natural resources; and / or
b. environmental carrying capacity.
3. The enforcement of mandatory Green Industry Standards as referred to in paragraph
(1) is determined by the Minister.

Article 37
Industrial companies that have met the Green Industry Standards are given a Green
Industry Certificate.

Article 38
1. Green Industry Certification as referred to in Article 32 letter b is carried out through a
series of inspection and testing processes by Green Industry Certification institutions
that are accredited and appointed by the Minister.
2. The Green Industry Certification Institute is accredited by the National Accreditation
Committee.
3. In the event that there is no accredited Green Industry Certification institution as
referred to in paragraph (2) the Minister may appoint a Green Industry Certification
institution.
4. The Minister supervises the designated Green Industry Certification institution as
referred to in paragraph (3).

Article 39
1. The Green Industry Certification Agency in carrying out inspection and testing as
referred to in Article 38, is carried out by the Green Industry auditor.
2. The Green Industry Auditor as referred to in paragraph (1) must have a certificate of
competence for the Green Industry auditor.
3. Further provisions regarding the competence of the Green Industry auditor as
referred to in paragraph (2) are regulated in a Ministerial Regulation.

Article 40
1. The Minister supervises the implementation of the Green Industry Standards which
are enforced compulsorily.
2. In carrying out supervision as referred to in paragraph (1), the Minister appoints
supervisory officials and / or Green Industry Certification institutions.
3. Further provisions regarding the supervision of the application of the Green Industry
Standards which are compulsorily enforced as referred to in paragraph (1) are
regulated by a Ministerial Regulation.

Part Two
Green Industry Facilities
 Article 41
The Central Government and Regional Government can provide facilities to Industrial
Companies that carry out efforts to realize the Green Industry.

Article 42
1. Facilities as referred to in Article 41 are in the form of fiscal facilities and non-fiscal
facilities.
2. Fiscal facilities as referred to in paragraph (1) are given in accordance with the
provisions of the legislation.
3. The form of non-fiscal facilities as referred to in paragraph (1) can be in the form of:
a. training to increase the knowledge and skills of industrial human resources in
the application of the Green Industry;
b. delegation of production rights to a technology whose patent license has been
held by the Central Government and / or Regional Government;
c. security guidance and / or security of industrial sector operational activities for
the continuity or smoothness of logistics activities and / or production for
industrial companies which are national vital objects and have green industry
certificates; and / or
d. providing promotional assistance for products.
4. In certain cases, the Minister may determine the form of non-fiscal facilities other
than as referred to in paragraph (3).

Part Three
Use of Green Industry Products

Article 43
The Central Government and Regional Governments prioritize the use of products that have
Green Industry Certificates.

CHAPTER IV
STRATEGIC INDUSTRY

First Section
General

Article 44
1. Strategic Industry consists of industries which:
a. fulfill needs that are important for people's welfare or control the livelihood of
many people;
b. increase or produce added value for strategic natural resources; and / or
c. has a relationship with the interests of the defense and security of the country.
2. The Strategic Industry as referred to in paragraph (1) is controlled by the State.
3. Mastery as referred to in paragraph (2) is carried out through:
a. ownership arrangements;
b. policy setting;
 c. licensing arrangements;
d. production, distribution and price arrangements; and
e. supervision.

Part Two
Arrangement of Ownership

Article 45
1. Strategic Industrial Ownership as referred to in Article 44 paragraph (3) letter a is
carried out by the Central Government through:
a. full capital participation by the Central Government;
b. establishment of joint ventures between the Central and private Governments;
or
c. ownership restrictions by foreign investors.
2. The implementation of capital participation as referred to in paragraph (1) letter a is
carried out in accordance with the provisions of the legislation.
3. The establishment of a joint venture between the Central Government and the private
sector as referred to in paragraph (1) letter b shall be carried out with the limit of
shares owned by the Central Government at least 51% (fifty one percent).

Article 46
1. The Minister proposes ownership of the Industry as referred to in Article 44
paragraph (1) letters a and b which will be designated as Strategic Industry.
2. Ownership of Strategic Industries which has links with the interests of the defense
and state security as referred to in Article 44 paragraph (1) letter c is regulated in
accordance with the provisions of the legislation.

Part Three
Policy Determination

Article 47
Determination of policies as referred to in Article 44 paragraph (3) letter b consists of:
a. determination of the type of strategic industry;
b. provision of facilities; and
c. compensation for losses.

Article 48
1. The Minister proposes the Type of Strategic Industry after coordinating with the
minister and / or the head of the relevant institution.
2. The type of Strategic Industry as referred to in paragraph (1) is stipulated by a
Presidential Regulation.

​ rticle 49
A
1. The provision of facilities as referred to in Article 47 letter b is carried out by the
Central Government in the framework of the development and development of
Strategic Industries.
 2. Facilities as referred to in paragraph (1) are given to Strategic Industries which carry
out:
a. deepening the structure;
b. technology research and development;
c. testing and certification; or
d. ​restructuring of machinery and equipment.
3. Facilities as referred to in paragraph (1) are in the form of fiscal facilities and
non-fiscal facilities.
4. Fiscal facilities as referred to in paragraph (3) are given in accordance with the
provisions of the legislation.
5. Non-fiscal facilities as referred to in paragraph (3) can be given at least in the form of:
a. ease of licensing services;
b. ease of obtaining land / location; and
c. providing technical assistance.

Article 50
1. The provision of compensation for losses as referred to in Article 47 letter c is carried
out by the Central Government for Strategic Industry.
2. Compensation as referred to in paragraph (1) is given for losses suffered by the
Strategic Industry in accordance with the regulation of production, distribution, and
prices set by the Central Government.
3. The provision of compensation for losses as referred to in paragraph (1) shall be
given in the form of margin implemented in accordance with the provisions of the
laws and regulations.

Part Four
Production, Distribution and Price Settings

Article 51
1. The regulation of production, distribution and price as referred to in Article 44
paragraph (3) letter d shall be carried out in the context of maintaining national
economic stability and national security.
2. The arrangement as referred to in paragraph (1) is carried out at least through the
determination of the amount of production, distribution and price of the product.
3. Determination of the amount of production, distribution, and price of the product as
referred to in paragraph (2) is carried out on:
a. Strategic Industrial products used by the Central Government; or
b. products related to community needs that are only produced by Strategic
Industries.
4. Determination of the amount of production, distribution, and / or product prices as
referred to in paragraph (3) is determined by the Minister.

Article 52
Strategic Industrial Companies must report plans and realization of production, needs and
stock of Raw Materials, distribution, and product prices to the Minister every 6 (six) months
and / or at any time if necessary.
 Part Five
Supervision

Article 53
1. Supervision as referred to in Article 44 paragraph (3) letter e shall be carried out by
the Minister at least above:
a. stipulation of Strategic Industry as a national vital object; and
b. product distribution.
2. Supervision as referred to in paragraph (1) is carried out on ownership status,
implementation of policies, legality of licensing, activities of production, distribution
and application of product prices from Strategic Industries.
3. Determination of Strategic Industry as a national vital object as referred to in
paragraph (1) letter a is stipulated by the Minister.

CHAPTER V
IMPROVEMENT OF USE OF STATE PRODUCTS

First Section
General

Article 54
Increasing the use of Domestic Products aims to:
a. empower domestic industries; and
b. strengthen the structure of the Industry.

Article 55
Users of Domestic Products as referred to in Article 54 consist of the Central Government,
Regional Government, business entities, and the community.

Article 56
The scope of regulation for increasing the use of Domestic Products includes: the
a. obligation to use Domestic Products;
b. efforts to increase the use of Domestic Products by private enterprises and
the public;
c. TKDN;
d. team increasing use of Domestic Products;
e. guidance and supervision; and
f. appreciation for the use of Domestic Products.

Part Two
Obligation to Use Domestic Products

Article 57
Domestic products must be used by users of Domestic Products as follows:
 a. state institutions, ministries, non-ministerial government agencies, other
government institutions, and regional work units in the procurement of goods /
services if the source of funding comes from the state revenue and
expenditure budget. regional income and expenditure budget, including loans
or grants from domestic or overseas; and
b. state-owned enterprises, other state-owned legal entities, regionally-owned
enterprises, and private business entities in the procurement of goods /
services which:
1. financing comes from the state budget and expenditure or regional
income and expenditure budget;
2. its work is carried out through a pattern of cooperation between the
Central Government and / or the Regional Government with business
entities; and / or
3. seek resources controlled by the state.

Article 58
1. The obligation to use Domestic Products as referred to in Article 57 is carried out at
the stage of planning and implementing procurement of goods / services.
2. Domestic Product Users as referred to in Article 57 must provide information
regarding the planned annual needs of Goods / Services to be used.
3. Planned annual needs of goods / services as referred to in paragraph (2) include
technical specifications, quantities, prices, and implementation of procurement of
goods / services.
4. Information as referred to in paragraph (2) must be announced through electronic
media, print media, and / or through the national Industrial information system.

Article 59
1. Compilation of plans for the annual needs of goods / services as referred to in Article
58 paragraph (3) shall be carried out by considering the capabilities of the domestic
industry in accordance with the inventory list of domestic products issued by the
ministry which administers government affairs in the industrial sector.
2. The preparation of the needs plan as referred to in paragraph (1) is carried out
through a technology audit.
3. The technology audit as referred to in paragraph (2) is carried out in accordance with
the provisions of the legislation.

Article 60
Procurement of Domestic Products consists of:
a. procurement of goods;
b. procurement of services; and
c. procurement of combined goods and services.

Article 61
1. In the procurement of goods / services, users of domestic products as referred to in
Article 57 must use domestic products if there are domestic products that have the
 sum of TKDN values ​and the value of the weight of company benefits at least 40%
(forty percent).
2. Domestic Products that must be used as referred to in paragraph (1) must have a
TKDN value of at least 25% (twenty five percent).
3. Procurement of goods / services that meet the provisions of TKDN value and the
weight of company benefits as referred to in paragraph (1) can be done through
tendering or direct electronic purchases (e purchasing) in accordance with the
provisions of the legislation.
4. TKDN value and value of Company Benefits Weight as referred to in paragraph (1)
refer to the inventory list of domestic production of Goods / Services issued by the
Minister.
5. The Minister can set a minimum limit on TKDN values ​in certain Industries outside
the provisions as referred to in paragraph (2).
6. The magnitude of TKDN value and value of Company Benefit for Domestic Products
delivered by Goods producers and / or Service providers in the procurement of
Domestic Products must be in accordance with the value stated in the inventory list of
domestic production of Goods / Services as referred to in paragraph (4) .
7. Goods producers and / or service providers must guarantee that domestic products
delivered in the procurement of domestic products as referred to in paragraph (6) are
produced domestically.

Article 62
1. In preparing goods / services procurement documents, officials of procurement of
goods / services must include requirements for domestic products that must be used.
2. Officials of procurement of goods / services can ask for clarification of the
correctness of TKDN values ​listed in the inventory list of domestic production of
goods / services to the ministry that organizes government affairs in the field of
industry.

Article 63
1. In the procurement of services as referred to in Article 60 letter b and the
procurement of combined goods and services as referred to in Article 60 letter c,
users of domestic products as referred to in Article 57 must include domestic service
companies.
2. The domestic service company as referred to in paragraph (1) is a state-owned
business entity, other state-owned business entity, regionally-owned business entity,
or business entity that produces services established in accordance with the
provisions of legislation and works and domiciled in the region The Unitary State of
the Republic of Indonesia with share ownership of more than 50% (fifty percent) by
state-owned enterprises, regionally owned enterprises, business entities that are
wholly owned by Indonesian citizens, and / or individual Indonesian citizens.

Article 64
1. Domestic Product Users as referred to in Article 57 must provide Price Preference for
Domestic Products that have a TKDN value greater than or equal to 25% (twenty five
percent).
 2. Domestic Product Price Preference for Goods is given at a maximum of 25% (twenty
five percent).
3. Domestic Product Price Preference for construction services carried out by domestic
companies is given a maximum of 7.5% (seven point five percent) above the lowest
bid price of a foreign company.
4. Provisions and procedures for granting Price Preferences in accordance with those
stipulated in the Presidential Regulation on Government Procurement of Goods /
Services.

Part Three
Efforts to Increase the Use of Domestic Products by
Private Enterprises and Communities

Article 65
1. The Central Government, Regional Government, and / or other stakeholders seek to
increase the use of Domestic Products to private enterprises and the public through:
a. promotion and dissemination of Domestic Products;
b. early education about love, pride and passion for using Domestic Products;
and
c. providing access to information on Domestic Products.
2. The Central Government and / or Regional Government can provide fiscal facilities
and / or non-fiscal facilities to private business entities that use Domestic Products.
3. Fiscal facilities and / or non-fiscal facilities as referred to in paragraph (2) are
provided in accordance with the provisions of the legislation.

Article 66
Further provisions regarding guidelines for increasing the use of Domestic Products are
regulated in a Ministerial Regulation.

Part Four
Level of Domestic Components

Article 67
1. Domestic products are determined based on the size of the domestic component in
each Goods / Services indicated by the TKDN value.
2. TKDN as referred to in paragraph (1) consists of:
a. TKDN Goods;
b. TKDN Services; and the
c. combined TKDN of Goods and Services.
3. TKDN value of goods as referred to in paragraph (2) letter a is calculated based on
production factors which include:
a. direct material / material;
b. direct labor; and
c. factory indirect costs (factory overhead).
4. TKDN value of services as referred to in paragraph (2) letter b is calculated based on
costs which include:
 a. labor;
b. work tools / work facilitation; and
c. public services.
5. The combined TKDN value of goods and services as referred to in paragraph (2)
letter c is calculated based on a combination of production factors as referred to in
paragraph (3) and costs as referred to in paragraph (4).
6. The value of intellectual ability (brainware) can be calculated as a cost in calculating
the TKDN value.

Article 68
1. Goods producers and / or service providers can be given an award in the form of
Company Benefit Weight.
2. The value of the value of the Company Benefit Weight as referred to in paragraph (1)
is calculated based on the determinant factors.
3. Provisions regarding the determinants as referred to in paragraph (2) are regulated in
a Ministerial Regulation.

Article 69
Provisions and procedures for calculating TKDN values ​as referred to in Article 67 and the
amount of value of the Company's Benefits as referred to in Article 68 are regulated in a
Ministerial Regulation.

Article 70
1. Calculation and Verification of the amount of TKDN value and value of Company
Benefit Weight shall be carried out through TKDN certification by the Minister.
2. The Minister in carrying out the calculation and Verification of the TKDN value and
the value of the Company's Benefits as referred to in paragraph (1) may appoint an
independent verification institution that is competent in its field.
3. Verification as referred to in paragraph (1) is carried out on goods producers, service
providers, or joint providers of goods and services that have industrial business
licenses issued in accordance with the provisions of the legislation.
4. In calculating TKDN value and value of Company Benefit as referred to in paragraph
(1) must refer to the provisions and procedures for calculating TKDN value and
amount of value of Company Benefit as referred to in Article 69.
5. Results of calculation and Verification of TKDN value of Goods and Weight value The
Company's benefits as referred to in paragraph (3) are legalized by officials
appointed by the Minister in the form of TKDN certificates.
6. The amount of TKDN value of Goods and / or value of Company Benefit weight
contained in the TKDN certificate as referred to in paragraph (5) shall be included in
the inventory list of domestic production of Goods / Services issued by the ministry
which organizes government affairs in the field of Industry.
7. Further provisions regarding the appointment of an independent verification
institution are regulated by a Ministerial Regulation.
 Article 71
Industrial companies as producers of goods include the amount of TKDN value of goods that
has been validated on the product label.

Article 72
1. Goods producers can carry out self-assessment of TKDN value of goods and value
of company benefits according to the provisions and procedures for calculating TKDN
value and value of company benefit as referred to in Article 69.
2. TKDN value of goods and value of company benefits by the producers of goods as
referred to in paragraph (1) to be the initial consideration for independent verification
institutions in calculating the amount of TKDN value of goods and the value of the
weight of company benefits for users of domestic products.
3. Service providers and / or joint providers of goods and services can self-calculate the
TKDN value of services and / or the combined TKDN value of goods and services in
accordance with the provisions and procedures for calculating TKDN values ​and the
value of company benefits as referred to in Article 69 for one tender .

Part Five
Team for Increasing Use of Domestic Products

Article 73
1. In the context of implementing increased use of Domestic Products, the Central
Government shall form a National Team for Increasing Use of Domestic Products,
hereinafter referred to as the P3DN National Team.
2. The P3DN National Team as referred to in paragraph (1) is stipulated by a
Presidential Decree.
3. To support the P3DN National Team, a P3DN work unit is formed under the Minister.

Article 74
1. To optimize the use of Domestic Products, a P3DN Team is established for each
user of Domestic Products as referred to in Article 57 which has representatives from
elements of the Central Government or Regional Government and elements of the
business world.
2. The P3DN Team as referred to in paragraph (1) has the duty:
a. to coordinate, supervise and evaluate the implementation of increased use of
Domestic Products in their respective environments;
b. provide final interpretation of the problem of the correctness of the TKDN
value between the Goods producer or the Service provider with the Goods /
Services procurement team; and
c. perform other duties related to increasing use of Domestic Products.
3. Further provisions regarding the establishment of the P3DN Team as referred to in
paragraph (1) shall be regulated in a Ministerial Regulation.

Part Six
Coaching and Supervision
 Article 75
1. The Minister shall provide guidance to Goods producers and / or Service providers to
be able to fulfill plans for the use of Domestic Products by users of Domestic
Products as referred to in Article 57.
2. To carry out guidance as referred to in paragraph (1), the Minister prepares plans for
developing value enhancements. TKDN of priority products to be developed.
3. Guidance implementation as referred to in paragraph (1) is carried out by a work unit
under the Minister in accordance with their duties and functions.
4. The Central Government can provide the least facilities in the form of:
a. Price preferences and ease of administration in the procurement of goods /
services; and
b. TKDN certification.

Article 76
1. Supervision of the implementation of increased use of Domestic Products is carried
out by the Government Internal Supervisory Apparatus and internal supervisory
officials and P3DN Team as referred to in Article 74 paragraph (1) in accordance with
their respective authorities.
2. Supervision as referred to in paragraph (1) is carried out to determine compliance
and compliance with the implementation of increased use of Domestic Products
including consistency of commitment of users of Domestic Products and / or Goods
producers and / or Service providers in increasing use of Domestic Products.
3. Goods producers and / or service providers as referred to in paragraph (2) may be
subject to sanctions if:
a. making and / or submitting documents and / or other information that is
incorrectly related to the TKDN value; and / or
b. based on the results of the inspection it was found that there was a mismatch
in the procurement of domestic production of goods / services.

Part Seven
Award

Article 77
1. The Government gives awards to users of Domestic Products as referred to in Article
57.
2. Provisions concerning procedures for awarding the use of Domestic Products are
regulated in a Ministerial Regulation.

CHAPTER VI
INTERNATIONAL COOPERATION IN THE INDUSTRIAL FIELD

First Section
General
 Article 78
International Cooperation in the Field of Industry is intended for:
a. opening access and developing international markets;
b. opening of access to Industrial resources;
c. utilization of the Global Supply Chain network as a source of increased
industrial productivity; and
d. increased investment.

Article 79
The scope of international cooperation arrangements in the field of industry includes:
a. facilities of international cooperation in the field of industry;
b. Industry officials Abroad; and
c. fostering, developing and supervising international cooperation.

Part Two
Facilitating International Cooperation in the Field of Industry

Article 80
1. In the framework of industrial development, the Central Government shall carry out
International Cooperation in the Field of Industry.
2. In conducting International Cooperation in the Industry Sector as referred to in
paragraph (1), the Central Government may:
a. develop a strategic plan;
b. stipulate steps to save Industry; and / or
c. provide facilities.

Article 81
1. The strategic plan referred to in Article 80 paragraph (2) letter a is prepared by taking
into account the National Industrial Development Master Plan.
2. The strategic plan referred to in paragraph (1) includes at least: the
a. target of international cooperation;
b. scope of international cooperation;
c. the strategy of International Cooperation in the Field of Industry; and
d. plans for action on International Cooperation in the Field of Industry.
3. The strategic plan as referred to in paragraph (1) is prepared for a period of 20
(twenty) years and can be reviewed every 5 (five) years.

Article 82
1. The strategic plan as referred to in Article 80 paragraph (2) letter a is prepared by the
Minister.
2. In preparing the strategic plan as referred to in paragraph (1), the Minister can
coordinate with the relevant minister and consider input from relevant stakeholders.
3. The strategic plan as referred to in paragraph (1) is stipulated by a Ministerial
Regulation.
4. Further provisions regarding the procedures for preparing a strategic plan as referred
to in paragraph (1) are regulated in a Ministerial Regulation.
 Article 83
1. The Central Government shall determine the steps to save the Industry as referred to
in Article 80 paragraph (2) letter b if International Cooperation in the Field of Industry
has the potential to harm or endanger the interests of the national Industry.
2. The potential to harm or endanger the national industrial interests as referred to in
paragraph (1) is based on the results of studies conducted by the Minister.
3. The steps to rescue the industry can be:
a. temporary delays in either part or all of the cooperation agreement; and / or
b. review of cooperation agreements.

Article 84
In determining the steps to save the Industry as referred to in Article 83, the Central
Government may consider input from relevant ministries / institutions, Industry associations,
and the public.

Article 85
Further provisions concerning the stipulation of steps for rescuing industries shall be
regulated by Ministerial Regulation.

Article 86
1. Every international cooperation that has an impact on the Industry must first be
carried out through consultation, coordination and / or Ministerial approval.
2. Consultation and / or coordination with the Minister as referred to in paragraph (1) is
required for international cooperation which has an impact on the Industry intended
for:
a. opening of access to Industrial resources;
b. utilization of the Global Supply Chain network as a source of increased
industrial productivity; and / or
c. increased investment.
3. The Minister's approval as referred to in paragraph (1) is required in writing for
international cooperation that has an impact on the Industry intended to open access
and develop international markets.
4. In providing consultation, coordination, and / or approval, the Minister can consider
input from industry associations, the business world, and academics.

Article 87
1. The provision of facilities as referred to in Article 80 paragraph (2) letter c includes at
least:
a. guidance, consultation and advocacy;
b. negotiation assistance;
c. Industry promotion; and
d. ease of flow of goods and services.
2. Provisions regarding industry criteria, conditions, and procedures for granting
facilities as referred to in paragraph (1) are regulated by a Ministerial Regulation.
 Article 88
In the framework of opening international market access and development as
referred to in Article 78 letter a, the Minister carries out:
a. negotiating positions based on the National Industrial Development Master
Plan;
b. proposing the elimination of the policies of partner countries / international
organizations that hinder market access for industrial products;
c. network development with overseas partners; and / or
d. promotion of national industrial products and services abroad.

Article 89
In the framework of opening access to Industrial resources as referred to in Article 78
letter b, the Minister shall at least carry out:
a. information on the needs of domestic Industrial resources and the provision of
information on Industrial resources in partner countries;
b. international cooperation in the fields of:
1.​ ​improvement of industrial human resource capabilities;

2.​ ​development of access to natural resources;

3.​ ​development and utilization of industrial technology;

4.​ ​increased research and development;

5.​ ​increasing sources of industrial project financing; and / or

6.​ ​development of product quality standards and Industrial Services.

Article 90
In the framework of utilizing the Global Supply Chain network as a source of
increasing industrial productivity as referred to in Article 78 letter c, the Minister
develops a national Industry by integrating the national Industry into the Global
Supply Chain network by:
a. establishing networks with state and industrial partners;
b. building networks in the country to support national industries integrated into
the Global Supply Chain network; and
c. adjust national product quality standards and competencies of Industrial
Services to partner country standards.

Article 91
1. The Minister develops the national Industry through increasing investment in the
Industrial sector.
2. To increase investment in the Industrial sector, the Minister undertakes:
a. preparation of investment needs planning in the Industrial sector by involving
government agencies, associations, and related business sectors;
b. coordinating the implementation of investment plans in the Industrial sector
with relevant agencies; and / or
c. promotion of investment in the Industrial sector.
 Part Three
The Industry Officials Abroad

Article 92
1. Industry Officials Abroad are civil servants who come from ministries that carry out
government affairs in the field of Industry placed in potential countries to enhance
International Cooperation in the Field of Industry.
2. Industry Officials Abroad as referred to in paragraph (1) may consist of Industry
attaches and / or Industrial technical staff.
3. Industry Officials Abroad as referred to in paragraph (2) are assigned to ministries
that carry out government affairs in the field of relations and foreign policy and are
placed in Republic of Indonesia Representatives abroad with diplomatic status to
carry out technical duties, in accordance with the main tasks of the ministry that
organizes government affairs in the field of industry.
4. Determination of position formation for Officers of Industry Abroad is carried out by
the minister who organizes government affairs in the field of relations and foreign
policy based on:
a. mission weight;
b. the intensity and degree of relations between Indonesia and the recipient
country; and / or
c. benchmarks of national interest.
5. Industry Officials Abroad as referred to in paragraph (2) carry out duties and
functions in the field of Industry which includes the assessment of Industrial
resources, analysis of potential investment cooperation in the Industrial sector,
penetration of Global Supply Chain utilization for domestic Industries, identification of
barriers to market access Industrial products, and maintenance of the continuity of
industrial cooperation.
6. In the event that there are no Industry Officers Abroad at the Representative of the
Republic of Indonesia as referred to in paragraph (3), the implementation of the
duties and functions of Industry Officials Abroad shall be carried out by diplomatic
functional officials.

Article 93
Placement of Industry Officials Abroad as referred to in Article 92 is carried out in
accordance with the provisions of the legislation.

Article 94
1. In carrying out their duties and functions, Industry Officials Abroad can be assisted by
staff from the ministry that organizes government affairs in the field of Industry.
2. Staff as referred to in paragraph (1) has the task of helping to handle the substance
of industrial resource studies, analysis of potential investment cooperation in the
industrial sector, penetration of global supply chain utilization for domestic industries,
identification of barriers to market access for industrial products, and maintenance of
industrial cooperation. .
 Article 95
1. In order to facilitate the implementation of its duties and functions, the Industry
Official shall be responsible directly to the Head of Representative of the Republic of
Indonesia.
2. Collaboration between fields is regulated by the Head of Representative in
accordance with the services in the Representative of the Republic of Indonesia.

Article 96
1. Industry Officials Abroad submit reports periodically every 1 (one) month to the
Minister.
2. The report as referred to in paragraph (1) contains at least information about:
a. opportunities or potential utilization and opening of market access for
industrial products in partner countries;
b. opportunities or potential use of Industrial resources in partner countries;
c. opportunities or potential utilization of the Global Supply Chain network;
d. opportunities and potential of Industrial investment sources in partner
countries;
e. profile of superior industry and industrial technology in partner countries; and /
or
f. developments in the implementation of international cooperation with partner
countries and partner countries with other trading countries.
3. The relationship of reciprocal communication of ministries which organizes
government affairs in the field of industry with the Industry Officials Abroad is carried
out through the ministry which organizes government affairs in the field of relations
and foreign policy.

Article 97
Further provisions regarding the assignment and placement of Industry Officials Abroad shall
be regulated by a Ministerial Regulation.

CHAPTER VII
ADMINISTRATIVE SANCTIONS

Article 98
1. The minister, governor, or regent / mayor in accordance with his authority gives
administrative sanctions to industries that violate the Green Industry Standards which
are enforced compulsorily as referred to in Article 36.
2. Administrative sanctions as referred to in paragraph (1) are in the form of:
a. written warnings;
b. administrative fines;
c. temporary closure;
d. suspension of industrial business licenses; and / or
e. revocation of industrial business licenses.
3. The governor or regent / mayor as referred to in paragraph (1) provides
administrative sanctions after obtaining a recommendation from the Minister.
 Article 99
1. Written warnings as referred to in Article 98 paragraph (2) letter a are given a
maximum of 3 (three) consecutive times with a maximum grace period of 3 (three)
months.
2. Written warning as referred to in paragraph (1) is given based on the results of field
checks by officials appointed to supervise the Green Industry Standards.
3. Further provisions regarding the provision of written warnings are regulated in a
Ministerial Regulation.

Article 100
1. If the Industrial Company continues to not meet the Green Industry Standard which is
imposed compulsorily in the period of the written warning as referred to in Article 99
paragraph (1), the minister, governor or regent / mayor shall impose administrative
penalties.
2. The amount of administrative penalty as referred to in paragraph (1) shall be a
maximum of Rp. 3,000,000,000 (three billion rupiah).

Article 101
1. Administrative fines must be deposited to the state treasury or regional treasury in
accordance with the provisions of the legislation.
2. Payment of administrative fines as referred to in paragraph (1) shall be made no later
than 30 (thirty) working days after the letter of imposition of administrative fines is
determined.
3. Administrative penalties as referred to in paragraph (1) are state revenues not tax or
regional revenues.

Article 102
1. Industrial companies that do not meet the Green Industry Standards which are
enforced compulsorily and do not pay administrative fines within the period referred
to in Article 101 paragraph (2) are subject to administrative sanctions in the form of
temporary closure.
2. Temporary closure as referred to in paragraph (1) is suspended for a period of 6 (six)
months for an Industrial Company paying the administrative fine as referred to in
Article 100 paragraph (2).
3. The Industrial Company as referred to in paragraph (2) which still does not meet the
Green Industry Standards after the period of suspension is ended, will be subject to
administrative sanctions in the form of a temporary closure.

Article 103
Temporary closure is carried out by:
a. Minister after coordinating with governors and / or regents / mayors; or
b. governor and / or regent / mayor after obtaining a Minister's recommendation.
 Article 104
1. The issuing agency permits to freeze industrial business licenses from industrial
companies subject to administrative sanctions in the form of temporary closure as
referred to in Article 102.
2. The suspension of industrial business licenses as referred to in paragraph (1) shall
be subject to a period of 3 (three) months.

Article 105
1. If an Industrial Company does not comply with the Green Industry Standard which is
enforced compulsorily until the end of the administrative sanction in the form of an
industrial business license is suspended, administrative sanctions shall be imposed
in the form of revoking the Industrial business license.
2. Revocation of Industrial business licenses as referred to in paragraph (1) shall be
carried out by the permit issuing agency.

Article 106
1. Independent TKDN institutions that violate the provisions referred to in Article 70
paragraph (4) are subject to administrative sanctions.
2. Administrative sanctions as referred to in paragraph (1) are in the form of:
a. written warnings; and / or
b. revocation of appointment as an independent TKDN verification institution.
3. Further provisions regarding the procedure for granting sanctions as referred to in
paragraph (2) shall be regulated in a Ministerial Regulation.

Article 107
1. Officials of procurement of goods / services in state institutions, ministries,
non-ministerial government institutions, other government institutions, and regional
apparatus work units, state-owned enterprises, other state-owned legal entities,
regionally owned enterprises, and private business entities as intended in Article 57
which violates the provisions referred to in Article 61 paragraph (1) and / or
paragraph (2) is subject to administrative sanctions in the form of:
a. written warnings;
b. administrative fines; and / or
c. dismissal from the position of procurement of goods / services.
2. Sanctions as referred to in paragraph (1) are carried out by:
a. leaders of state institutions, ministries, non-ministerial government agencies,
other government institutions, and regional work units for procurement of
goods / services carried out by state institutions, ministries, non-ministerial
government institutions, government agencies others, and regional work
units;
b. the head of a government agency that:
1. provides financing from the state revenue and expenditure budget or
regional income and expenditure budget;
2. responsible for work carried out through a pattern of cooperation
between the Central Government and / or the Regional Government
with a business entity; and / or
 3. regulating-controlled resources,
the operation of state for the procurement of goods / services carried out by
state-owned enterprises, other state-owned legal entities, regionally-owned
enterprises, and private business entities.
3. Provision of sanctions as referred to in paragraph (2) is carried out based on a letter
of recommendation from the Government Internal Supervisory Apparatus and internal
supervisory officials and P3DN Team if the procurement official does not fulfill the
obligations referred to in Article 61 paragraph (1) and paragraph (2).
4. Written warning sanctions as referred to in paragraph (1) letter a are imposed on the
first violation up to the third violation.
5. Administrative penalty sanctions as referred to in paragraph (1) letter b are imposed
on the fourth violation.
6. Administrative penalty sanctions as referred to in paragraph (5) shall amount to 1%
(one percent) of the value of the contract for the procurement of goods / services with
a maximum value of Rp500,000,000.00 (five hundred million rupiahs).
7. Termination sanction from the position of procurement of goods / services as referred
to in paragraph (1) letter c is imposed on the fifth violation.

Article 108
1. Administrative penalties as referred to in Article 107 paragraph (1) letter b must be
deposited to the state treasury or regional treasury in accordance with the provisions
of the legislation.
2. Payment of administrative fines as referred to in paragraph (1) shall be made no later
than 30 (thirty) working days after the letter of imposition of administrative fines is
determined.
3. Administrative penalties as referred to in paragraph (1) are state revenues not tax or
regional revenues.
4. In the event that the administrative fine as referred to in Article 107 paragraph (1)
letter b is not implemented, the official of the procurement of Goods / Services shall
be subject to administrative sanctions for dismissal from the position of procurement
of goods / services.

Article 109
1. Goods producers and / or service providers who violate the provisions referred to in
Article 61 paragraph (6), Article 61 paragraph (7), and / or Article 76 paragraph (3)
are subject to administrative sanctions in the form of:
a. revocation of TKDN certificates;
b. blacklisting; and
c. administrative fines.
2. Revocation of TKDN certificate as referred to in paragraph (1) letter a is carried out
by officials who certify TKDN certificates.
3. The inclusion in the black list as referred to in paragraph (1) letter b is carried out in
accordance with the provisions of the legislation.
4. Administrative penalties as referred to in paragraph (1) letter c are imposed if the
Goods producer and / or Service provider violates the provisions:
 a. Article 61 paragraph (6) in the form of a reduction in payment of the difference
between the TKDN bid value and the maximum TKDN value of 15% (fifteen
percent ); and
b. Article 61 paragraph (7) in the form of 3 (three) times the value of imported
goods.
5. Administrative penalties as referred to in paragraph (4) are imposed on Goods
producers and / or service providers by:
a. leaders of state institutions, ministries, non-ministerial government institutions,
other government institutions, and regional work units for procurement of
goods / services carried out by state institutions, ministries, non-ministerial
government institutions, other government institutions, and regional work
units;
b. the head of a government agency that:
1. provides financing from the state revenue and expenditure budget or
regional income and expenditure budget;
2. responsible for work carried out through a pattern of cooperation
between the Central Government and / or the Regional Government
with a business entity; and / or
3. regulating-controlled resources,
the operation of state for the procurement of goods / services carried out by
state-owned enterprises, other state-owned legal entities, regionally-owned
enterprises, and private business entities.
6. Further provisions regarding the procedure for granting sanctions as referred to in
paragraph (1) shall be regulated in a Ministerial Regulation.

Article 110
1. Administrative fines as referred to in Article 109 paragraph (1) letter c must be
deposited to the state treasury or regional treasury in accordance with the provisions
of the legislation.
2. Payment of administrative fines as referred to in paragraph (1) shall be made no later
than 30 (thirty) working days after the letter of imposition of administrative fines is
determined.
3. Administrative penalties as referred to in paragraph (1) are state revenues not tax or
regional revenues.

CHAPTER VIII
TRANSITIONAL PROVISIONS

Article 111
When this Government Regulation comes into force:
1. all Industrial Empowerment activities that have been carried out are stated as
Industrial Empowerment activities that apply according to this Government
Regulation; and
2. Industrial Empowerment activities that are still carried out at the time of promulgation
of this Government Regulation, remain valid until completion.
 CHAPTER IX
CLOSING PROVISIONS

Article 112
Presidential Regulation as referred to in Article 48 paragraph (2) shall be stipulated no later
than 2 (two) years as of the promulgation of this Government Regulation.

Article 113
This Government Regulation shall come into force on the date of promulgation.

For public cognizance, this Government Regulation is promulgated by placing it in the State
Gazette of the Republic of Indonesia.

Stipulated in Jakarta,
On July 13, 2018
PRESIDENT OF THE REPUBLIC OF
INDONESIA,

Signed.

JOKO WIDODO

Promulgated in Jakarta,
On July 18, 2018
THE MINISTER OF LAW AND HUMAN RIGHTS
OF THE REPUBLIC OF INDONESIA,

Signed.

YASONNA H. LAOLY

STATE GAZETTE OF THE REPUBLIC OF INDONESIA OF 2018 NUMBER 101

Copy in accordance with the original

MINISTRY STATE SECRETARIAT OF
THE REPUBLIC OF INDONESIA
Law and Legislation,

signed

Lydia Silyanna Djaman