The newly issued Risk Based Licensing Regulation promises faster, clearer, and more predictable processes for key permits like KKPR, Environmental Approval, and Building Approval—permits that real estate developers know can make or break a project timeline. But these new developments do not come without new challenges.
Regulatory Framework for Business License: 2021 versus 2025
On 5 June 2025, the Government of the Republic of Indonesia published the Government Regulation Number 28 of 2025 concerning Implementation of Risk Based Business Licensing (“GR on Risk Based Licensing”) which revokes its predecessor namely Government Regulation Number 5 of 2021 concerning Implementation of Risk Based Business Licensing (“GR on Risk Based Licensing 2021”). Online Single Submission (“OSS”) system as well as the existing Indonesia National Single Window system must be adjusted with provisions of GR on Risk Based Licensing for a maximum of 4 months since GR on Risk Based Licensing was enacted, namely 4 months since 5 June 2025.
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In the part of general explanation of GR on Risk Based Licensing, it is stated that there is a major change taken in GR on Risk Based Licensing, namely the existence of Service Level Agreement (“SLA”) and positive fictional provision. What is meant by SLA is a legal certainty about time limit in each risk based licensing process, especially in the part of basic requirements including Compliance of Utilization Activity of Space (“KKPR”), Environmental Approval (“PL”), Building Approval (“PBG”), and Certificate of Functional Suitability of Building (“SLF”).
Positive fictional provisions in Indonesian administrative law have actually existed since Law Number 30 of 2014 concerning Government Administration (“Government Administration Law“), which was later amended by Law Number 6 of 2023 concerning the Stipulation of Government Regulation in Lieu of Law Number 2 of 2022 concerning Job Creation as Law (“Job Creation Law“). Article 53 paragraph (4) of the Government Administration Law, as amended by the Job Creation Law, stipulates the following:
“If within the time limit as referred to in paragraph (2), the Agency and/or Government Official does not determine and/or take a Decision and/or Action, the application shall be deemed legally granted.”
This formulation provides 3 elements of a positive fictional provision: the existence of a time limit (SLA), the absence of action within the time limit, and the application being deemed legally granted. The GR on Risk Based Licensing, particularly in the basic requirements section, regulates SLA and the granting of certain action in one of the stages of the entire licensing application if the SLA is passed. This is what we will explore in detail in the next section.
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In starting and running a business, it is important for real estate companies to fulfil basic requirements in the form of KKPR, PL, PBG, and SLF. Unlike other business sectors that do not always require a PBG and whose PL is less complicated, the property sector can be considered a demanding sector that must meet all of these basic requirements to a high standard. Therefore, improving the effectiveness of services to obtain these basic requirements will significantly impact the overall licensing process that property companies must undergo.
This article will discuss whether the positive fictional provisions in the GR on Risk Based Licensing truly represent a fresh hope for the property sector in managing permits. This article will limit its discussion to the basic requirements of KKPR, PL, and PBG. The SLF will not be discussed because the GR on Risk Based Licensing does not contain any positive fictional provisions for SLF processing.
Basic Requirements for Real Estate Company
This section will discuss each basic requirement deeply one by one.
Compliance of Utilization Activity of Space
“If technical land considerations are not included in the assessment results within the 20 business days, KKPR approval is issued without requiring technical land considerations”
Article 1 number 27 of GR on Risk Based Licensing defines KKPR as “…conformity between spatial utilization activity plan with spatial planning”. KKPR is included in the sub-stages of basic requirement fulfillment in starting a business. In GR on Risk Based Licensing, KKPR is divided into KKPR with business location on land and/or at sea, but the one that will be discussed in this section is only KKPR with business location on land. Similar to GR on Risk Based Licensing 2021, GR on Risk Based Licensing also differentiates the KKPR mechanism into KKPR confirmation and KKPR approval based on the existence of a Detailed Spatial Planning Plan (“RDTR“).
The KKPR confirmation mechanism is much simpler than KKPR approval because it only requires checking the conformity of the spatial utilization activity location plan, which is carried out automatically through the OSS system. If the activity location plan aligns with the RDTR, confirmation will be issued automatically, and if it does not, it will be automatically rejected.
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GR on Risk Based Licensing regulates the SLA for the KKPR approval stages, as well as the positive fictional provision at the end before the KKPR approval is issued. The KKPR approval mechanism is carried out through the stages of registration, examination of proposed spatial utilization activity documents, assessment of proposed spatial utilization activity documents, and issuance of KKPR approval.
First, business actors register for KKPR approval through the OSS system by completing the documents and paying Non-Tax State Revenue (“PNBP“). The process continues with document verification within a maximum of 5 business days from the date of payment of the PNBP. Incorrect proposal documents will be returned, and business actors have the opportunity to revise them twice. If after two revisions the proposal documents are still incorrect, the KKPR approval will be rejected. Proposal documents that are declared correct during the inspection will proceed to the assessment stage.
During the assessment stage, the proposed documents are reviewed using a hierarchical and complementary approach based on the Spatial Plan (“RTR”) for districts/cities, provinces, national strategic areas, islands/archipelagos, and/or nationally. Assessment of the proposed documents, including technical land considerations, is conducted within 20 business days of the proposal being declared correct.
If the assessment results are in accordance with the RTR and technical land considerations are issued, KKPR approval is issued through the OSS system, and vice versa in the event of a rejection of the KKPR approval application. If technical land considerations are not included in the assessment results within the 20 business days, KKPR approval is still issued without requiring technical land considerations. This section shows the provision with positive fictional principles in application of the basic requirements for KKPR.
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This positive fictional provision at first glance appears to be already regulated in Article 180 paragraph (4) of GR on Risk Based Licensing 2021, which also states that if the 20 business days period is exceeded, KKPR approval is automatically issued by the OSS system. However, based on OSS explanation this old regulation cannot be interpreted to mean that KKPR approval can be issued without any technical land considerations. Article 32 paragraph (5) of the Regulation of the Minister of Agrarian Affairs and Spatial Planning/Head of the National Land Agency Number 13 of 2021 concerning the Implementation of Compliance of Spatial Utilization Activities and Synchronization of Spatial Utilization Programs (“Permen Agraria on Spatial Utilization“), which stipulates that technical land considerations are deemed to have been given if the 10 business days period has passed, also does not in reality mean that KKPR approval can be issued without technical land considerations.
While neither regulation explicitly states that KKPR approvals can be issued without land technical considerations, as in the GR on Risk Based Licensing, they also do not stipulate otherwise, and the principle of positive fictional is also clearly visible. In fact, the OSS can currently issue KKPR approvals with a positive fictional when the Gistaru system sends a positive fictional notification to the OSS system. However, for some reason, this has never been done, and the existing regulations remain just in writing.
In practice, the OSS system has not issued KKPR approvals before the completion of technical land considerations. The technical land consideration process can be lengthy, which can be detrimental to business actors, including real estate companies. In addition to the lengthy timeframe, human resource challenges in the field are also very real, such as the numerous illegal levies. The explicit positive fictional provision in the GR on Risk Based Licensing, which stipulates the issuance of KKPR approvals without technical land considerations, appear to provide more legal certainty for business actors. But are these merely empty promises, like previous positive fictional regulations?
Furthermore, without improvements in human resources in the field, even the best regulations will be useless. For example, the provisions regarding the verification of KKPR documents still leave wide gaps for “exploitation” by certain individuals. If the document is still incorrect after two revisions, the KKPR application will be rejected. It is possible that documents will continue to be declared incorrect because, when returned for correction, the person in charge fails to provide complete and accurate information on how to correct the documents. Thus, extortion can occur even before document assessments are conducted and technical land considerations can be set aside. Positive Fictional provision may become ineffective because business actors cannot even reach the final point where positive fictional provision can finally be enacted.
Furthermore, state interests must not be harmed by the disregard of important documents such as these technical land considerations, preventing authorized officials from seriously considering and pursuing the existing SLA. Article 9 of the Regulation of the Minister of Agrarian Affairs and Spatial Planning/Head of the National Land Agency Number 12 of 2021 concerning Land Technical Considerations (“Permen Agraria on Land Technical Consideration”) stipulates that land technical considerations for KKPR approval must include provisions and conditions for land ownership, use, and utilization, as well as provisions for land acquisition and transfer of land rights.
All of these crucial components can be neglected without the land technical considerations. Even with mandatory land technical considerations, there is still case of spatial planning violation where a developer was building housing in protected areas and water infiltration areas that are crucial for the city. So how can spatial planning management function effectively without technical considerations for land development? The positive fictional provision may be creating legal certainty on certain aspect but the government must ensure that it will not cause harm on the other aspects, e.g., conditions to use the land.
Environmental Approval
“…the substantive examination of environmental documents can still be carried out without technical approval”
Based on the stages of fulfillment, PL is distinguished between PL that does not require an Environmental Impact Analysis (“Amdal”) or Environmental Management Efforts and Environmental Monitoring Efforts (“UKL-UPL”), and PL that requires an Amdal or UKL-UPL. PL that does not require an Amdal or UKL-UPL is included in the sub-stage of basic requirements in starting a business which is in the form of a Statement of Commitment to Environmental Management and Monitoring (“SPPL”). Meanwhile, PL that requires an Amdal or UKL-UPL is included in the sub-stage of basic requirements in preparation for running a business. PL that falls under the Amdal mandatory criteria is given in the form of an Environmental Feasibility Decree, and PL that falls under the UKL-UPL mandatory criteria is given in the form of a Statement of Commitment to Environmental Management.
PL applications with an Amdal or UKL-UPL must be accompanied by technical approval as one of the administrative requirements. The technical approval section for the PL contains provisions based on positive fictional principles, similar but distinct from the positive fictional principles in the KKPR regarding land technical considerations. The existence of positive fictional provisions in this environmental technical approval is highly relevant and interesting for property sector whose businesses are categorized as PLs that require an Amdal or UKL-UPL that need to apply for environmental technical approval.
Technical approval for PL applications with Amdal or UKL-UPL consists of fulfilment of wastewater quality standards, fulfilment of emission quality standards, hazardous and toxic waste management, and/or traffic impact analysis. First, the business actor screens the types of technical approvals that need to be fulfilled, then submits an application for the required technical approval to the authorized agency.
Applications for technical approval can be submitted in the form of technical standards stipulated by the Central Government or in the form of a technical study (if there are no technical standards from the Central Government). For technical approval applications that already have technical standards from the Central Government, the technical approval will be issued automatically through the environmental information system (for fulfilment of wastewater and emissions quality standards, and hazardous and toxic waste management) and/or the traffic information system (for traffic impact analysis).
In technical approval in the form of a technical study, the business actor prepares a technical study which will then be examined by the authorized official. Technical approval in the form of a technical study must be issued within a maximum of 30 business days for fulfilment of wastewater and emission quality standards, and 16 business days for hazardous and toxic waste management, calculated from the date the application is declared complete and correct.
The SLA for technical approval of traffic impact analysis is divided into two, namely for activities with high and medium traffic generation, a maximum of 23 business days, and for low traffic generation, a maximum of 3 business days, calculated from the date the application is declared complete and correct. If technical approval cannot be issued within this time period, the business actor can immediately submit a PL application by attaching evidence of a technical approval application that has been declared complete and correct by the authorized official through the relevant information system.
Technical approval that has not been issued when the PL application is submitted by the business actor is still expected to be issued and available when the substantive examination of environmental documents begins. Substantive examination of environmental documents is carried out by testing the documents and also by testing the suitability. If they do not meet the requirements even if they have been revised, a decision letter regarding environmental unsuitability will be issued.
If the time for the substantive examination of environmental documents has arrived and the technical approval has not been issued, the substantive examination can still be carried out without technical approval. This section shows a form of positive fictional provision in the context of the basic requirements for PL in GR on Risk Based Licensing.
In the previous KKPR section, the positive fictional aspect was more apparent due to its position at the final stage and the immediate issuance of the KKPR approval itself. In this section, the PL with Amdal or UKL-UPL is not immediately issued due to the existence of other PL application stages after technical approval. In Government Regulation Number 22 of 2021 concerning the Implementation of Environmental Protection and Management (“GR on Environmental Protection“) and other related regulations, and in practice to date, technical approval is mandatory in the management of PL with Amdal or UKL-UPL.
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Many business actors have complained about the uncertainty of the issuance time for environmental technical approval, which disrupts their business schedules. The GR on Environmental Protection regulates SLAs in the PL process, but it does not specifically address the principle of positive fictional, and therefore, the introduction of positive fictional provision regarding environmental technical approvals may address entrepreneurs’ need for certainty regarding the PL process if implemented properly and correctly.
Furthermore, this provision, while beneficial to businesses, must not harm the state or lead to environmental neglect. In the absence of technical approval, the technical study conducted by the business actor will not be properly assessed, even though the technical study document contains very important matters, for example in the context of technical approval for hazardous and toxic waste.
Article 394 of the GR on Environmental Protection regulates that the technical study document for the disposal of hazardous and toxic waste must include at least the waste disposal location, the waste processing flow to be disposed of, and laboratory test results, at least related to toxicology and heavy metal concentrations, etc. Without technical approval, which is an assessment of the important matters contained in the technical study, the consequences for the environment might become fatal. Hazardous and toxic waste may be carelessly disposed, in an improper manner, thereby poisoning our environment and us.
Building Approval
“The automatic determination of regional retribution values reveals a positive fictional character within the entire PBG process.”
Fulfilling the PBG is included in the basic requirements for preparing to run a business, especially for those planning to construct a building. For other business industries, PBG may not be necessary at all, but for real estate companies, this basic requirement is mandatory. Before starting construction, business actors must obtain a PBG. As mentioned in the previous CCRE article series entitled Reforming Environmental Supervision and Sanctions: Key Points and Discrepancy whether Environmental Approval is Required for Building Approval, PL is no longer a requirement for the issuance of PBG. This is because in the GR on Risk Based Licensing, PL and PBG are placed on equal footing as separate basic requirements. However, Article 11 paragraph (3) of the GR on Risk Based Licensing clearly stipulates that in order to carry out building construction, both PL and PBG must still be fulfilled by business actors.
PBG is processed through planning consultation and issuance. The planning consultation consists of the registration process, a technical standards compliance assessment, and a technical standards compliance statement. Business actors first register by submitting the applicant or owner data, the building data, and the technical plan documents, which are then being checked for the completeness and accuracy. If the document is declared incorrect, the document will be returned to the business actor for one time correction within a period of 5 business days, and if this time is exceeded or the document is still incorrect, the PBG application will be rejected. Once the documents are declared correct, technical standards compliance assessment is conducted in a maximum of 5 times within a maximum period of 26 business days. The results of these technical standards compliance assessment are stated in a report, complete with technical considerations and conclusions. These conclusions may include a recommendation to issue a technical standards compliance statement, followed by the issuance of the statement letter, completed with technical calculations for the retribution. If it does not meet technical standards, the conclusion will contain a recommendation for PBG re-registration.
The next PBG process, namely issuance, consists of determining the regional retribution value, payment of the regional retribution, and issuance of the PBG. The determination of the retribution value in this process is carried out based on the technical calculations for the retribution generated from the previous process. The determination of the retribution value must be submitted to the business actor no later than 1 business day through the OSS system after receiving the statement of compliance with technical standards. If the retribution value cannot be determined within that time, the retribution value determination will be done automatically through the OSS system. Once the retribution value is determined, the process continues with payment of the retribution value and the issuance of the PBG for the business actor.
The automatic determination of regional retribution values demonstrates the positive fictional principle of the entire PBG process. This basic requirement does not stipulate that PBGs can be issued without the completion of certain documents, as with KKPR and PL. In practice, however, the problem of delayed PBG issuance is not only due to the retribution determination process itself, but also to the protracted document inspection/verification process and human resource issues in the field. This alone demonstrates that the positive fictional regulation for the retribution determination process does not fully address all existing issues. Furthermore, the automatic determination of retribution values by the OSS system has the potential to create further issues, given the lack of assurance that the automatically determined retribution value is accurate due to system error in calculating integrated index and unit price of the retribution. Furthermore, there is no mechanism to anticipate errors in the automatic retribution determination. Beside this positive fictional principle for the value of retribution, the GR on Risk Based Licensing, which is said to bring fresh hope in terms of the SLA, is also questionable. Although the GR on Risk Based Licensing regulates the SLA for the PBG process, this will not have a significant impact, considering that SLA regulations have been in place since Government Regulation Number 16 of 2021 concerning the Implementing Regulations of Law Number 28 of 2002 concerning Buildings (“GR on Buildings“). Long before the GR on Buildings, there is already an SLA in Article 53 of the Government Administration Law. Establishing an SLA is nothing new, and in fact, it has not been strictly adhered to. This raises the question of what will make this time different from the previous ones.
Positive Fictional Provisions: Its Benefits and Challenges
The positive fictional provisions regarding the basic requirements for KKPR, PL, and PBG do not, in principle, eliminate any stage entirely. In KKPR, business actors must still submit a KKPR application and authorized officials must continue to strive to process it (including land technical consideration) properly in accordance with the SLA. In PL, technical approval must also be applied by business actors first. Furthermore, in PBG, the entire planning consultation process must be completed before the retribution value can be automatically determined. All these administrative efforts must not only be completed in advance but also be carried out properly and correctly by the real estate company. Positive fictional provisions only appear at certain points when the process has been properly and correctly followed, but obstacles still arise in issuing or proceeding to the next stage.
Whether these positive fictional provisions truly offer fresh hope will certainly need to be proven by their effective implementation once the GR on Risk Based Licensing is integrated with the current system. However, looking at the history of positive fictional regulations since the enactment of the State Administration Law, it seems less likely that positive fictional provisions in this GR on Risk Based Licensing can be truly relied upon. Initially, the positive fictional regulations stipulated in the State Administration Law included a mechanism for filing positive fictional request to the state administrative court. However, the positive fictional claim was eliminated by the Job Creation Law, and through Supreme Court Circular Letter Number 5 of 2021, the positive fictional is no longer under the jurisdiction of the state administrative court.
Article 53 paragraph (5) of the State Administration Law, as amended by the Job Creation Law, mandates that further positive fictional regulations be regulated by a presidential regulation, which, to date, has not yet been implemented, leaving the public in a state of uncertainty. While waiting for the issuance of the presidential regulation regarding positive fictional, one way that the public can do is to file a claim against Government Administrative Actions in the form of not carrying out concrete actions as in Decision Number 1/G/TF/2024/PTUN.JBI. In this decision, the panel of judges declared the defendant’s inaction (omission) to withdraw and destroy the certificate void and required the defendant to withdraw and destroy the certificate.
In the context of the KKPR, positive fictional provisions related to land technical considerations have existed for some time, but may have never been implemented. Furthermore, the exclusion of land technical considerations, which is a crucial document, could actually be detrimental to state interests. In the context of the PL, the waiver of environmental technical approval may be a novelty that could benefit business actors. However, environmental conditions and state interests could be harmed. In the context of the PBG, the automatic determination of retribution values by the OSS system will not have a significant impact and actually contains weaknesses due to the possibility of errors in determining retribution values. Furthermore, regarding the SLA in the basic requirements in the GR on Risk Based Licensing, this is actually nothing new, and there is no guarantee that this time will be any different from previous ones. From the government’s perspective, the existence of these positive fictional provisions is certainly not an excuse for not working properly and complying with the existing SLA.
Author
Yosefin started her professional career as a litigation Lawyer at Kantor Hukum Tirta & mitra, and SKY & Partners Law Office. She expanded her experience to PT Sarana Pactindo and PAC Group, an IT banking company group, as Corporate IT Legal. Yosefin joined Leks&Co as Mid-Level Associate in 2024 after obtaining a Master’s degree from University of Groningen, The Netherlands.
Editor
Dr Eddy Marek Leks, FCIArb, FSIArb, is the founder and managing partner of Leks&Co. He has obtained his doctorate degree in philosophy (Jurisprudence) and has been practising law for more than 20 years and is a registered arbitrator of BANI Arbitration Centre, Singapore Institute of Arbitrators, and APIAC. Aside to his practice, the author and editor of several legal books. He led the contribution on the ICLG Construction and Engineering Law 2023 and ICLG International Arbitration 2024 as well as Construction Arbitration by Global Arbitration Review. He was requested as a legal expert on contract/commercial law and real estate law before the court.
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Reference:
Regulation
- Law Number 30 of 2014 concerning Government Administration.
- Law Number 6 of 2023 concerning the Stipulation of Government Regulation in Lieu of Law Number 2 of 2022 concerning Job Creation as Law.
- Government Regulation Number 16 of 2021 concerning the Implementing Regulations of Law Number 28 of 2002 concerning Buildings.
- Government Regulation Number 22 of 2021 concerning the Implementation of Environmental Protection and Management.
- Government Regulation Number 28 of 2025 concerning Implementation of Risk Based Business Licensing.
- Government Regulation Number 5 of 2021 concerning Implementation of Risk Based Business Licensing.
- Regulation of the Minister of Agrarian Affairs and Spatial Planning/Head of the National Land Agency Number 12 of 2021 concerning Land Technical Considerations.
- Regulation of the Minister of Agrarian Affairs and Spatial Planning/Head of the National Land Agency Number 13 of 2021 concerning the Implementation of Compliance of Spatial Utilization Activities and Synchronization of Spatial Utilization Programs.
Decision
- Decision Number 1/G/TF/2024/PTUN.JBI.
Other
- Fraksi Golkar DPR RI. Menteri ATR/BPN: Isu Pokok Pertanahan soal Lama Pelayanan dan Pungli. <https://fraksigolkar.com/read/717/menteri-atr-bpn-isu-pokok-pertanahan-soal-lama-pelayanan-dan-pungli>, accessed 25 July 2025.
- Gunawan, Depi. Konsumen Tuntut Penegak Hukum Usut Penipuan Proyek Perumahan Elit di Lembang. < https://mediaindonesia.com/jabar/berita/785773/konsumen-tuntut-penegak-hukum-usut-penipuan-proyek-perumahan-elit-di-lembang>, accessed 31 July 2025.
- Ignatius, Ardelia. Reforming Environmental Supervision and Sanctions: Key Points and Discrepancy whether Environmental Approval is Required for Building Approval. <https://www.linkedin.com/pulse/reforming-environmental-supervision-sanctions-key-points-discrepancy-cewoc/?trackingId=lqp98ufITIy3yGX8sLItkA%3D%3D>, accessed 30 Juli 2025.
- Laporgub Provinsi Jawa Tengah. Detail Aduan. < https://laporgub.jatengprov.go.id/detail/LGWP73444187.html>, accessed 28 July 2025.
- OSS. Mengenal Fiktif Positif (FIKPOS) dalam Perizinan Berusaha. <https://oss.go.id/informasi/pengumuman/mengenal-fiktif-positif-(fikpos)-dalam-perizinan-berusaha>, accessed 23 July 2025.
- Redaksi Sapos. Kepengurusan PBG Dianggap Ribet, Wali Kota Samarinda Akan Sederhanakan Lewat Perwali. < https://www.sapos.co.id/metropolis/2455558860/kepengurusan-pbg-dianggap-ribet-wali-kota-samarinda-akan-sederhanakan-lewat-perwali>, accessed 28 July 2025.
- Seprihadi, Hengki. Ribuan Pengusaha Mengeluh Akibat Ketidakpastian Waktu Persetujuan Lingkungan di Kementerian LHK. < https://www.cerinews.id/2024/09/15/ribuan-pengusaha-mengeluh-akibat-ketidakpastian-waktu-persetujuan-lingkungan-di-kementerian-lhk/>, accessed 25 July 2025.
- Zulkarnaen, Aziz. Perizinan Berusaha Pengelolaan Limbah B3 Dikeluhkan Banyak Pengusaha. < https://www.rri.co.id/hukum/965254/perizinan-berusaha-pengelolaan-limbah-b3-dikeluhkan-banyak-pengusaha>, accessed 25 July 2025.
- Consultation with BKPM (OSS) on 24 July 2025 through telephone.
