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LAW
PARAGRAPH 5 YEAR 1984
REGARDING
INDUSTRIAL AFFAIRS

PRESIDENT OF INDONESIAN REPUBLIC,

Considering: a. that the goal of the national development is to achieve a

wealthy and fair community and balanced in material and
spirituality based on the Pancasila Principles, also that the
aim of National Development is for a wholesome
Indonesian Human Development, such that the
fundamental basis of the National Development
implementation are the Pancasila and The Constitution
1945;
b. that the direction of long term development in the national
economic sector is the achievement of a balanced economic
structure wherein an advanced industrial power and ability
are supported strongly by agricultural power and ability,
being the starting point for Indonesian people to grow and
develop based on own power;
c. that in order to achieve such targets of development in the
economic sector in the national development, industries
hold a determining Paragraph and therefore it will need to
be further developed and integrated through increasingly
active Participation by the people and optimal utilization of
all natural, human resources and available funds;
d. that according to the above passage and to provide a
strong foundation for setting up the regulation,
supervision, and sustained development of the industry,
and in the absence of the necessary legal instrument to
universally regulate this field, it is necessary to establish
Law regarding Industry;

Recalling: 1. Article 5 para (1), Article 20 para (1), Article 27 para (2), and
Article 33 para (3) of the 1945 Constitution;
2. Law Paragraph 7 Year 1960 regarding Statistics (State
Gazette Year 1960 Paragraph 109, Supplement to State
Gazette Paragraph 2048);

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 3. Law Paragraph 12 Year 1967 regarding General Provisions
on Cooperatives (State Gazette Paragraph 23/1967,
Supplement to State Gazette Paragraph 2832);
4. Law Paragraph 1 Year 1970 regarding Occupational Safety
(State Gazette Year 1970 Paragraph 1, Supplement to State
Gazette Paragraph 2918);
5. Law Paragraph 5 Year 1974 regarding General Provisions of
Regional Government (State Gazette Year 1974 Paragraph
38, Supplement to State Gazette Paragraph 3037);
6. Law Paragraph 4 Year 1982 regarding Basic Provisions for
Management of the Environment (State Gazette Year 1982
Paragraph 12, Supplement to State Gazette Paragraph
3215);
7. Law Paragraph 20 Year 1982 regarding Basic Provisions for
National Defense and Security of the State (State Gazette
Year 1982 Paragraph 51, Supplement to State Gazette
Paragraph 3234);

With the Approval of

Indonesian Legislative Assembly

DECIDED

To Establish: LAW REGARDING INDUSTRIAL AFFAIRS

CHAPTER I
GENERAL STIPULATIONS

Article 1
In this Law, the meaning of:
1. Industrial Affairs are orders and all activities related to the industrial activity.
2. Industry is an economic activity that process raw materials, base materials,
intermediate products, and/or final products to become products with higher
values in usage, including industrial design and engineering.

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3. Industrial Groups are the major players in the industrial activity, comprising of
the upstream industrial group called the basic industrial group, and the
downstream industrial group, and the smaller industrial groups.
4. Branch of industry is that Paragraph of specific industrial group having similar
general characteristics in their production process.
5. Industry Type is that Paragraph(s) of specific branch of industry having similar
spesific characteristics and/or results in final products of their production
process.
6. Field of Industry is the field of activity related to the branch or type of industry.
7. Industrial Company is a business entity that conducts their activities in the field
of industry.
8. Raw Materials are all the materials obtained from natural resources and/or
from man’s work for further utilizations.
9. Industrial Base Materials are processed or non-processed raw materials that
can be used as production means in industry.
10. Intermediate Products are raw or base materials that had passed one or more
industrial process stages and can be further processed to become Final Products.
11. Final Products are the materials resulted from an industry and are ready to be
used for final consumption or as production tool.
12. Industrial Technology is a processing methodology applicable in the specific
industry.
13. Appropriate Technology is a suitable and useful technology for processing in
industry, resulting added values to the final products.
14. Engineering Design is that activity that relates to the construction plans of an
entire industry/factory or Paragraphs of it..
15. Industrial Engineering an industrial activity related to the design and assembly
of factory machinary/equipment and other industrial equipment.
16. Industrial Standards are the industrial codes applicable to industrial products
that on the one hand concern with the shape, dimension, composition, quality,
etc., whilst on the other hand concern with the methods of processing, drawing,
testing, etc.
17. Industrial Standardization is uniformity and implementation in applying
industrial standards.
18. Industrial Order is the arrangement and regulation in the broadest sense for
industry.

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 CHAPTER II
FUNDAMENTALS AND GOALS OF AN INDUSTRIAL DEVELOPMENT

Article 2
Industrial development should be founded on economic democracy, belief in self
power and capabilities, benefits, and sustainability of the environment.

Article 3
The goals of Industrial Development include:
1. Improvement of people’s welfare in a balanced and fair manner through the
utilization of the funds, natural resources, and/or results of their cultivation
and in consideration the balance and sustainability of the environment;
2. Stagewise economic growth, changing the economic structure towards a better,
advanced, healthy and balanced way in the effort to realize stronger and
broader foundations for the economic growth in general, as well as to provide
specific added values in the growth of industries;
3. Enhancing the capacity in and mastering of, and encouragement of the
inventions of appropriate and useful technologies and promoting trust on the
national business capabilities;
4. Increasing community’s involvement and enhancement of economically weak
group’s capabilities, including those craftsmen to actively Paragraphicipate in
the industrial development;
5. To broaden and evenly distribute the job and business opportunities, also to
increase the role play of industrial cooperatives;
6. To increase national revenues income by improving the quality of exported
products, along with tightening of national budget through priority usage of
national products, thus reduce dependency on imported products;
7. To develop the growth of industrial centers so as to support regional
development in the framework of realizing the National Concept;
8. To support and strengthen a dynamic national stability in the framework of
strengthening the national endurability.

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 CHAPTER III
INDUSTRIAL DEVELOPMENT

Article 4
(1) Industral sectors that play important and strategic roles for the country and
controls a lot of people’s needs is controlled by the state.
(2) Stipulations as meant in para (1) will be further regulated later through
Government Regulation.

Article 5
(1) The Government shall establish sectors of industry categorized as small
industry groups, including industry employing traditional skills and art-
producing industry, that may be only conducted by the Citizen of Indonesian
Republic.
(2) The Government shall establish the specific industry types that are specifically
spared for small industry’s activity conducted by entrepreneurs from
economically weak group.
(3) Stipulations as stated in para (1) and para (2) shall be further regulated later
through a separate Government Regulation.

Article 6
The Government shall establish sectors of industryto be opened for investments, both
domestic as well as foreign capitals.

CHAPTER IV
REGULATION, CONTROL AND ESTABLISHMENT OF INDUSTRY

Article 7
The Government shall conduct the regulation, control and establishment of the
industry, in order to:
1. Realize a better industry development in a healthy and result-oriented way;
2. Develop a fair and healthy competition and prevent dishonest competition;
3. Prevent industry centralization or monopoly by one group or individual that
may inflict financial losses to the community.

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 Article 8
The Government shall conduct the regulation, control and establishment of the
industry in a balanced, integrated and guided way in order to strengthen the national
industrial structure on every phase of the industrial development.

Article 9

The regulation, control and establishment of the industry shall be conducted in

observations of:
1. The spread and distribution of industrial development by making use of human
and natural resources alongside industrial process and technology that are
useful in order to grow and develop by own power and capabilities;
2. The creation of a healthy climate for the industrial growth and the prevention of
dishonest competition between companies conducting the industrial activity, so
as to avoid centralization or ownership by one group or individual in the form
of a monopoly that may inflict suffering to the community;
3. Appropriate protection of domestic industries from foreign industrial activities
and trading that are contradictory with the general interests of the nation and
with the development of domestic industries in Paragraphicular;
4. Prevention of damage and pollution to the environment, also to secure efforts to
achieve a balanced and sustainable natural resources.

Article 10

The Government conducts the control and development over the followings :
1. Relationship between sectors of industry to increase the added values and
contribution to the national production growth;
2. Relationship between sectors of industry with economio sectors that increase
the added values and contribution to the national production growth;
3. Industrial growth through initiatives, Participation and self-drive by the
community.

Article 11
Government shall establish control over the industrial companies by organizing a
mutually beneficial cooperatives, and endeavour to enhance the development of this
cooperatives.

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 Article 12
In order to motivate establishment of sectors of domestic industry and specific
industry types, the Government may give necessary facilitation and/or protection.

CHAPTER V
LICENSE TO CONDUCT INDUSTRIAL BUSINESS

Article 13
(1) All newly established industrial company and its expansion must be completed
with a duly approved Industrial Business License.
(2) The issuance of Industrial Business License is related with the regulation,
control, and establishment of the industry.
(3) The obligation to attain the Industrial Business License may be exempted for
specific industry types within small industry classification.
(4) Stipulations regarding the license as meant in para (1) and para (3) shall be
regulated later on through separate Government Regulation.

Article 14
(1) In line with the Industrial Business License it has attained based on Article 13
para (1), the industrial company is obligated to submit annual information
about its activities and production results to the Government.
(2) The obligation to submit such industrial information may be exempted for
specific industry types within small industry classification.
(3) Stipulations regarding the format, contents, and procedures for submittal of the
industrial information as meant in para (1) shall be further regulated later
through Government Regulation.

Article 15
(1) In line with the Industrial Business License it has attained based on Article 13
para (1), the industrial company is obligated to conduct efforts related to their
equipment’s safety and security, processes and products including their
transportation.
(2) The Government shall establish control in the form of guidelines and
elucidation regarding the implementation of efforts related with equipment’s
safety and security, production processes and results including their
transportation.

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(3) Government shall conduct the monitoring and management related to the
equipment’s safety and security, production processes and results including
their transportation.
(4) The organizational procedures for the monitoring and management as meant in
para (3) shall be regulated through a Government Regulation

CHAPTER VI
THE TECHNOLOGY, PRODUCT DESIGN,
DESIGN AND ENGINEERING,
AND STANDARDIZATION IN INDUSTRY

Article 16
(1) In the course of running and/or developing industrial business, the companies
make use and create precise and specific industrial technologies using available
instrument and those that are developed in the country.
(2) If the required industrial technology instrument are unavailable or insufficiently
provided in the country, the Government may assist in the choice of necessary
industrial technology instrument and arrangements of their transportation from
a foreign country into the country.
(3) The choice and transfer of such foreign industrial technology that is strategic
and needed for domestic industry development, shall be regulated separately
later on through a Government Regulation.

Article 17
Industrial product designs shall be legally protected through stipulations as regulated
by a Government Regulation.

Article 18
The Government shall promote the development of industrial design and engineering
capabilities.

Article 19

The Government shall establish standards for the base materials and products of the
industry in order to ensure their quality and to achieve optimum productive capacity.

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 CHAPTER VII
INDUSTRIAL REGIONS

Article 20
(1) The Government may designate specific regions for industrial growth centers as
well as location for industrial establishment appropriate to her goals and
objectives in the framework of realizing the Nusantara Archipelagic Concept..
(2) The Stipulations as stated in para (1) shall be regulated later on through
Government Regulation.

CHAPTER VIII
THE RELATIONSHIPS OF INDUSTRY WITH THE NATURAL RESOURCES
AND ENVIRONMENT

Article 21
(1) Industrial companies are under the obligation to attain a balanced and
sustainable efforts to conserve the natural resources and prevent damage and
environmental pollution caused by their activities.
(2) The Government shall regulate and establish control through guidlines and
elucidation regarding the implementation of damage prevention and abatement
of environmental pollution caused by the industrial activities.
(3) The obligation to conduct efforts as meant in para (1) may be exempted for
certain industry types in the small industry classification.

CHAPTER IX
TRANSFER OF AUTHORITY AND AFFAIRS IN THE INDUSTRY

Article 22
The transfer of authority regarding regulation, control and establishment within the
context of industry, shall be regulated later on through Government Regulation.

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 Article 23
The transfer of the business affairs of certain industrial sectors and/or its withdrawal
from the Central Government to Regional Government in the course of
implementation of genuine, dynamic and responsible regional development, to be
accomplished through a Government Regulation.

CHAPTER X
CRIMINAL PROVISIONS

Article 24
(1) Whomsoever intentionally conduct an action contradictory to the stipulations as
meant in Article 13 para (1) and Article 14 para (1) shall be punished with
imprisonment of 5 (five) years maximum or be fined to the amount of Rp.
25.000.000,- (twenty five millions rupiah) maximum with an additional
punishment of the withdrawal of his/her Industrial Business License.
(2) Whomsoever through his/her negligence had conducted an action
contradictory with the stipulations as meant in Article 13 para (1) and Article 14
para (1) shall be imprisoned for 1 (one) year maximum or be fined to the
amount of Rp. 1.000.000,- (one millions rupiah) maximum with additional
punishment of the withdrawal of his/her Industrial Business License.

Article 25
Whomsoever intentionally and without any legal rights imitates the industrial
product design as stated in Article 17, shall be imprisoned for 2 (two) years maximum
or be shall fined to the amount of Rp. 10.000.000,- (ten millions rupiah).

Article 26
Whomsoever intentionally conduct an action that contradicted with the stipulations
as stated in Article 19, shall be imprisoned for 5 (five) years or fined to the amount of
Rp. 25.000.000,- (twenty five millions rupiah) maximum with addtional punisment the
withdrawal of his/her Industrial Business License.

Article 27
(1) Whomsoever intentionally conduct an action that contradicted with the
stipulations as stated in Article 21 para (1) shall be imprisoned for 10 (ten) years
maximum and/or fined to the amount of Rp. 100.000.000,- (one hundred
millions rupiah) naximum.

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(2) Whomsoever by his/her negligence contradicted with the stipulations as stated
in Article 21 para (1) shall be imprisoned for 1 (one) year and/or fined to the
amount of Rp. 1.000.000,- (one million rupiah).

Article 28
(1) Criminal action as stated in Article 24 para (1), Article 25, Article 26, and Article
27 para (1) are act of crimes.
(2) Criminal actions as stated in Article 24 para (2), and Article 27 para(2) are
violation of the Law.

CHAPTER XI
TRANSITIONAL PROVISIONS

Article 29
Upon enactment of this Law, every laws and regulations related to the industry that
do not contradict with this law are still in force for as long as their replacement have
not been established based upon this Law.

CHAPTER XII
CLOSING PROVISIONS

Article 30
Upon enactment of this Law, the Bedrijfsreglementerings ordonantie 1934 (Staatsblad
1938 Paragraph 86) is declared no longer valid for the industry.

Article 31
All matters that have not been regulated in this Law shall be regulated through a
Government Regulation.

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 Article 32
This Law shall be enforced on the day of its promulgation.
In order that everyone is informed of it, herewith order that the Law be legitimated in
the State Gazette of Indonesian Republic.

Officially signed at: Jakarta

Date: June 29th, 1984
President of Indonesian Republic,

signed

Soeharto

Legitimated at: Jakarta

Date: June 29th, 1984
Minister/State Secretary of Indonesian Republic,

signed

Sudharmono, S.H.

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 ELUCIDATION

OF

LAW PARAGRAPH 5 YEAR 1984

REGARDING
INDUSTRY

GENERAL
The Broad Outlines of the Nation's Direction (GBHN) clearly stated that the main
target of the Long Term Development is the creation of a strong foundation for
Indonesian people to grow and develop on their own power towards a prosperous
and fair community based on the Pancasila Principles. In the economic sector, the
main targets to be achieved in the Long Term Development are the creation of balance
between agriculture and industry as well as some fundamental changes in Indonesia’s
economic structure so that national products originating from outside of agricultural
sector will play a bigger Paragraph and industry will become an economic backbone.
Besides, the implementation of development should also guarantee an evenly spread
of income distribution among all citizens in proper fairness, in the frame of forming
Social Justice so that on one side the development not only pointed to production
increase, but also to prevent the widening of gaps between the rich and the poor.
In observing the Long Term Development’s targets in the economic sector above, it
became clear that industrial development plays a very important Paragraph. Given
the direction and targets, such industrial development not only should be enhanced
and it’s growth should be accelerated to enable faster creation of a more balanced
economic structure, but it’s implementation should also have capabilities to provide
more work opportunities, increase the chain of industrial production processes in
order to meet domestic needs and thus reduce dependency on imports, and increase
the exports of the industrial products itself.
To realize the above targets, it will be necessary to provide the legal instruments that
clearly able to provide the base foundation for the efforts of regulating, construction,
and development in the widest sense of order and arrangement of all industrial
activities.
It is in the framework of these needs that the Law regarding the Industry is
established.
This matter becomes more and more important, especially if related with the fact that
to date the regulations used for industry’s regulation, control, and establishment are
often felt inadequate because they only regulate specific aspects in the industrial
arrangements and activities, and quite often they are not related to one another.

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If the Law were to be aimed at giving a strong base foundation in the broadest
meaning to the efforts of regulating, control, and establishment, it should not
neccesarilly mean that the Law will provide the chance for an absolute control over
every branch of industry by the State.
The Constitution 1945 and the Broad Outlines of the Nation's Direction explicitly
show that in the economic activities, including industry, the growth of "etatism" and
"free fight liberalism" system must be avoided.
On the other hand, through this Law the efforts of industry’s regulation, control, and
development are directed to where and how the industrial development should be
performed, by giving all possible opportunities to the public to actively participate in.
In this case, the Law explicitly declares that industrial development must be based on
economic democracy.
With this base foundation, in essence, the industrial business activities are open for
public to deploy.
The fact that the Law stipulates that such industrial sectors that plays important and
strategic roles for the country and controls the basic needs of a lot of people is to be
controlled by the State, shows that the matter is actually a major principle of economic
democracy itself.
Likewise, the stipulations on industrial business establisments that are categorized as
small industrial groups, including those industries that use traditional skills and art-
producing industry, may be only conducted by the Citizen of Indonesian Republic.
With this base foundation, the efforts of regulating, control, and establishment
conducted by the Government is directed towards the creation of an industrial
business climate wherein the strong and big helps and guides the weak and small to
grow and become stronger. With such a healthy industrial business climate, it is
hoped that the industry will offer one big stimulus by creating a wide field of jobs.
With the efforts and the creation of industrial business climate as above, it is hoped
that people’s confidence in own power and capabilities to build industries will grow
sufficiently. In this relationship, it is important to notice that however big the desire
in the effort to build this industries, yet this Law also order the realization of balance
and harmony between the effort itself with human environment and Indonesian
people.
Prosperity, however is not the only goal that this industrial development wish to
achieve.
Whatever efforts are conducted in development activities stated above, it shall not be
detached from the national development goal, that is development to form a
prosperous and fair community with equal and balanced material distribution and
spirituality based on the Principles of Pancasila within the vehicle of Indonesian
Republic, inline with the direction of Long Term Development, that is development of
wholesome Indonesian Human and the development of all Indonesian people.
Because of that, this Law makes it clear that any effort and activity conducted in the
framework of this industrial development, must be done in such a way, and help
conserve the natural resources and thus not to damage the environment system.

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Thus the industrial community being developed should also ensure the promotion
and growth of Indonesian communuty that that are strong in character, advanced,
prosperous, fair and sustainable based on Pancasila.

ARTICLE BY ARTICLE
Article 1
Para 1
Sufficiently clear.

Paragraph 2
Sufficiently clear.

Paragraph 3
Sufficiently clear.

Paragraph 4
Sufficiently clear.

Paragraph 5
Sufficiently clear.

Paragraph 6
Sufficiently clear.

Paragraph 7
Sufficiently clear.

Paragraph 8
Sufficiently clear.

Paragraph 9
Sufficiently clear.

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Paragraph 10
Sufficiently clear.

Paragraph 11
Sufficiently clear.

Paragraph 12
Sufficiently clear.

Paragraph 13
Sufficiently clear.

Paragraph 14
Sufficiently clear.

Paragraph 15
Sufficiently clear.

Paragraph 16
Sufficiently clear.

Paragraph 17
Sufficiently clear.

Paragraph 18
Sufficiently clear.

Article 2
As explained in the General Provisions, an industrial development is to be founded
on:
a. Economic Democracy, that means that the implementation of industrial
development shall be conducted with the greatest possibilities of involvement
and active Participation by the public in evenly distributed manner, whether in
the form of individual/private businesses or cooperatives and avoid the "free

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 fight liberalism" and "etatism" system, and prevent centralization of economic
power or monopoly that may invoke sufferance to the community;
b. Self Confidence, that means that every effort and activity in industrial
development should have a strong foundation and at the same time able to lift
up the belief in the ability and capacity of ownself based on a strong national
personality;
c. Benefit, that means that the implementation of industrial development and its
results must be used mainly for humanity and improvement in the prosperity
of the community;
d. Sustainability of the Environment, that means that the implementation of
industrial development must be conducted in observance of a balanced and
sustainable of the natural resources and the environment;
e. Nation Building must bear the character of economic democracy as well as
contributing more realistic forms towards the conomic democracy itself.

Article 3
Sufficiently clear

Article 4
Paragraph (1)
Certain industry’s sectors play very important and strategic roles for the country, and
dominate the livelihood of a lot of people a.o. because they:
a. fulfill the very basic needs for people’s prosperity or dominating a lot of
people’s need;
b. process specific strategic raw material;
c. are directly related with the national defence and security.
By “being controlled by the State” does not necessarily always mean that the
mentioned industry’s sectors must be owned by the State, but rather that the
Government has the authority to regulate the production of the said industry in the
course of keeping the steadiness of national economy as well as the national
resilience.
In view of the above considerations, the respective and specific industry may have to
be owned or controlled by the State.

Paragraph (2)
Sufficiently clear.

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 Article 5
Paragraph (1)
Small industry groups, including the ones that using modern processes, traditional
skills, and produce art objects such as handicraft industries, that are spread out all
over the regions of Indonesia, are commonly being conducted by Citizen of
Indonesian Republic from the weak economic groups. Therefore, these industries may
only be conducted by Citizen of Indonesian Republic.

Paragraph (2)
Sufficiently clear.

Paragraph (3)
Sufficiently clear.

Article 6
The Government shall establish regulations to open new sectors for investments or
expansion of existing industrial businesses, whether it is a domestic investment or a
foreign investation if they considera that the resulted products are very much needed.

Article 7
By way of regulation, construction, and development, the Government should be able
to prevent wasteful investations and dishonest and fraudulent competition in the
industrial business sector, and on the other hand be able to develop a good and
healthy competitive climate.
Through regulation, construction, and development, the Government should be able
to prevent centralization or monopoly by one group or individual that may induce
sufferance to the community.

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 Article 8
By regulation, control and guidance, and development in the field of industrial
business in this article it is meant the efforts are to be conducted continuously and
sustainably in the widest sense on industrial activities. The duties and responsibilities
to create benevolent climate and condition for the field of industrial business’s growth
and development, basically should be in the hands of the Government. Because of
that, it is only proper if the authority to regulate, construct and develop should also
lie in the hands of the Government.
In the actual implementation, such acts of regulation, control and guidance, and
development of industrial business conducted by the Government with authorization
given through the Law is to be conducted in a balanced, integrated and directed way
to strengthen national industrial structure on every stage of the industry’s
development.

Article 9
Paragraph 1
To fundamentally bring the economic structure’s changes into reality, it will be
necessary to mobilize and utilize all available human resources and natural resources
as optimally as possible. Along with that, the goals to enhance the people’s
prosperity and wealth through industry also demand the spreading and even
distribution of industrial development and construction in all regions of Indonesia
shall be done in accordance with the characteristics of the human- and natural-
resources available in each region.
Thus, it will also be necessary to increase the regional and village-wise development
that are accompanied with the construction and development of the participation and
capability of the local citizen. Application of a correct and proper technology, whether
developed domestically or being transferred from a foreign country, are part of an
effort to give the best benefits from the available natural resources owned by
Indonesian people for the wealth of all citizen.

Paragraph 2
In order to create an advantageous climate and industrial development in a healthy,
harmonious and steady manner, the Government shall conduct regulation and
guidance throughout the country in a comprehensive manner and direct them to
prevent dishonest competition between the companies conducting the industrial
activities; so that centralization or ownership by one group or individual in the form
of monopoly that may conjure sufferance to the community can be avoided.
In this series of activities, it is necessary to have various supporting facilities and
regulation such as :
• Comprehensive and sustained industrial information system;
• Regulatory Policy that are orientated towards developing the industrial
activities;
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• Policy on industrial protection through control and guidance, with a priority
towards domestic production;
• Policy and Regulation that stimulate exportation of the industrial products;
• Policy on Banking and Capital Markets that are conducive towards industrial
development.

Paragraph 3
Domestic industries should be directed to rapidly being capable of self development
so they may generate high productivity and work effectiveness, thus their products
can compete with imported products in the domestic and international markets. In
order to facilitate that, during the development stages, within reasonable limits the
Government may grant protection to such domestic industries.
On other hand, such protection given by Government must ensure that the domestic
consumers will not be subjected to financial losses.

Paragraph 4
In the development implementation, natural resources must be used rationally. The
exploitation of natural resources must be conducted so as not to damage the
environment systems, and be exploited wisely with considerations for the next
generation’s needs.

Article 10
In the course of maximising any added values, development of the industries must be
conducted through a chain series of mutually beneficial interrelation in all directions
in the broadest sense possible, s.a. :
a. Relationship between upstream/basic, downstream and small industry groups,;
b. Relationship between large, medium, and small scale industries categorized by
the amount of capital investment;
c. Relationship between the various sectors and/or types of industry;
d. Relationship between industries and other economic sectors.

Article 11
What is meant by establishing control over industrial company in this article is to
establish cooperatives between small, medium and large industries through
development of relationship such as general subcontracting, fostering, etc.
By developing such a system, the cooperation between large, medium and small
industrial entrepreneurs can be conducted constructively and positively in a
conducive climate, and in a mutually profitable manner.

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In establishing the mutual cooperation between industrial entrepreneurs the
Government may make use the role of cooperatives, Indonesian Trade and Industry
Chamber, also the various industrial federation/association as the vehicle for
promoting the development of the industrial business.

Article 12
What is meant by facilitation and/or protection given by Government to motivate the
development of industry sectors and types may include the sectors of tax, investment
and banking, customs and excise, export certificate and others.

Article 13
Paragraph (1)
Sufficiently clear.

Paragraph (2)
Sufficiently clear.

Paragraph(3)
Exemptions from the obligation to have the Industrial Business License are granted to
certain industry types from the small industry category in considerations of their
business nature and small scale investment which is more of a source of living for the
low income community, s.a. a home industry or handicraft business.

Paragraph (4)
Sufficiently clear.

Article 14
Paragraph (1)
What is meant by industrial information in this article is any factual, and complete
statistical information of an industrial company that is needed to facilitate the base
foundation for regulation, control and development of the industrial business sector
as stated in Article 8.

Paragraph (2)
Sufficiently clear.

Paragraph (3)
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Sufficiently clear.

Article 15
Paragraph (1)
Sufficiently clear.

Paragraph (2)
In the framework of establishing guidelines and information, the Government shall
issue guidelines of implementation to ensure the safety and security of equipment,
raw materials and products including transportation as well as worker’s safety.
Transportation here means the transportation of hazardous raw materials and their
products.
On the other hand, it will be necessary to control the steps in mitigating any
environmental damages and contamination also the protection of balanced and
sustainable natural resources.

Paragraph (3)
The monitoring and controlling activities related to process equipment’s safety and
security and their products are to ensure the safety and security during
implementation of technical operations.

Paragraph (4)
Sufficiently clear.

Article 16
Paragraph (1)
In line with the industry’s categorization, each upstream industry group or so called
basic industry group, downstream industry group or so called general industry, and
small industry group, and in consideration of their missions -- which is for growth
and even distribution, the application of appropriate technology which may be in the
category of advanced, average or simple technologies.
The directive to apply appropriate technology while making use of domestic
components as far as possible is to enhance their added values, and keeping the
balance between increased production and work opportunity as well as for even
distribution of income.

Paragraph (2)

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What is meant by Government will assist in the choice of industrial technology
instruments from foreign countries is through the provision of industrial technology
data related to the origin of said technology, process, license, patent, royalty including
providing services in composing a contract agreement, etc.

Paragraph (3)
Sufficiently clear.

Article 17
Yang dimaksud dengan desain produk industri adalah hasil rancangan suatu barang
jadi untuk diproduksi oleh suatu perusahaan industri. Yang dimaksud dengan
perlindungan hukum, adalah suatu larangan bagi pihak lain untuk dengan tanpa hak
melakukan peniruan desain produk industri yang telah dicipta serta telah terdaftar.
What is meant by industrial product design is the design of specific products
produced by certain industry. What is meant by legal protection, is a prohibition for
other entrepreneur to imitate the industrial product design that had been created and
legally registered.
The point of this Article is to stimulate the creation of new designs.

Article 18
The point of this Article is to give the broadest opportunity for Indonesian people to
acquire the skill and experience in using technology for industrial establishment plans
also in the design and assembling of factory machinery and industrial equipment.
Included in the meaning of Industrial Engineering are engineering consultation,
construction, equipment and industrial machinery.

Article 19
The establishment of industrial standards has the goals to ensure and at the same time
increasing the quality of industrial products, to normalize the usage of raw materials
and utilities, also to rationalize the optimalization of production and work procedures
in order to achieve their most effective utilization.
In composing the industrial standards stated above, included the participation of
private Enterprises, Indonesian Chamber of Commerce and Industry, Associations,
Research Institutions, Scientific Institutions, Consumer Institutions, and other
stakeholders.
Other than for industrial interests, the industrial standardization also needed to
protect consumers.

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 Article 20
Paragraph (1)
The development of basic industries in large scales to directly process the natural
resources including energy sources existing in certain regions, need to be used
profitably to promote the development of industrial sectors and interrelated industry,
that further on may be developed into industrial centers.
Such chain of activities in industrial development as mentioned above will in turn
accelerate the development in other economic sectors along with their important
infrastructures such as service terminals, new residential estates or new agricultural
areas.
Such areas that are started from an industrial development chain as mentioned above,
in harmony with the regional conditions and within the framework of a wholesome
national economy, will make up the development of Industrial Growth Center Area.

Paragraph (2)
Sufficiently clear.

Article 21
Paragraph (1)
An industrial company that had been built in specific location, has the obligation to
pay attention to the balance and sustainability of natural resources used in its process
and help prevent any environmental damages and pollution caused by their
industrial process and activities.
The negative effects may take the forms of disturbances, damages, and hazars to the
surrounding community’s health and safety caused by pollution on soil, water, and
air including the noise generated by the industrial activities. In this case, Government
may need to develop mitigating regulation and guidelines to prevent it..

Paragraph (2)
Sufficiently clear.

Paragraph (3)
Sufficiently clear.

Article 22
The organization of industrial regulation, guidance, and development need to be
conducted within clear boundaries of authority so that the implementation could be
run in a balanced and integrated manner in relation with other economic sectors.

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In relation with the above, any transfer of authority in the field of industrial business
regulation, guidance, and development to certain Government institution, needs to be
more clearly regulated.
This is quite important in order to avoid duplication of authority in the area of
regulation, control and guidance, and development of industrial business between
Governmental institutions, and especially in the efforts to achieve the highest
effectiveness in industrial development.

Article 23
What is meant by transfer of the business affairs of certain industrial sectors and/or
its withdrawal in this Article is especially regarding the authorization that was
conducted in view of desentralization in the framework of implementating a realistic,
dynamic and responsible regional development.

Article 24
Paragraph (1)
Sufficiently clear.

Paragraph (2)
Sufficiently clear.

Article 25
Sufficiently clear.

Article 26
Sufficiently clear.

Article 27
Paragraph (1)
Sufficiently clear.

Paragraph (2)
Sufficiently clear.

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 Article 28
Paragraph (1)
Sufficiently clear.

Paragraph (2)
Sufficiently clear.

Article 29
Sufficiently clear.

Article 30
Sufficiently clear.

Article 31
Sufficiently clear.

Article 32
Sufficiently clear.

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