Risk-Based Business License and Problems Arising After The Job Creation ACT

Abstract

The emergence of the Job Creation Act, one of the aims of creating employment opportunities. In general, the administrative licensing process in Indonesia is a barrier to business transformation. Many licensing processes do not have clear protocols, demanding, lack transparency, and costly. So that the fundamental transformation in the Job Creation Law is the transformation of the business licensing paradigm in Indonesia. Switch from the traditional license-based licensing approach to risk-based licensing. This research aims to reveal how risk-based licensing actually is and what problems can arise in licensing when risk-based licensing is applied. This is a doctrinal study that takes a conceptual and legal approach. The analysis is in the form of primary, secondary, and tertiary legal materials. The data and materials collected were analyzed qualitatively and described by descriptive analysis. This paper concludes that risk-based licensing relies more on a thorough risk analysis. In the implementation of risk-based licensing, the regulator assesses several factors such as business activities, business performance history, and the risk management system in place. Based on these matters, the regulator then places business actors into several groups, according to the level of risk. Risk-based licensing, on the other hand, has a couple of problems. The first issue is ambiguous risk assessment as a result of the omnibus legislative format. Second, the volatile risk hasn’t been taken into account. Third, neither cumulative nor systemic risks have been taken into account. Fourth, there are unanticipated implementation challenges. Finally, there is the possibility of regulatory capture.