- The House of Representatives is currently finalizing preparations of the new Draft Bill on the Management of Water Resources (“Draft Bill”), which it is hoping will eventually replace Law No. 7 of 2004 on Water Resources, which was revoked by the Constitutional Court back in 2015.
- However, the Indonesian Business Association (Asosiasi Pengusaha Indonesia/Apindo) is asserting that several aspects of the Draft Bill have the potential to disrupt the Indonesian investment climate.
- Firstly, Apindo is claiming that any charges which are imposed in the form of bank guarantees and compensation for the conversion of water resources (Sumber Daya Air – “SDA”) and which will amount to a minimum of 10% of operating profits will place an excessive burden upon businesses.
- Secondly, Apindo is also claiming that the Draft Bill does not strike a clear and distinct balance between the state’s obligation to provide clean drinking water for the country’s citizens and its obligation to promote economic growth and the role of business within society.
- Thirdly, the Draft Bill is seen as still not adequately emphasizing the protection of Indonesia’s water resources.
- And fourthly, the Draft Bill places businesses and private companies at the lowest level of priority as regards the securing of SDA management licenses, while businesses will also have to meet strict requirements and conditions.
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