REGULATION OF THE MINISTER OF INDUSTRY No.

15/M-IND/PER/2/2011
CONCERNING GUIDELINE FOR USING DOMESTIC PRODUCTS IN THE PROCUREMENT OF GOVERNMENT GOODS/SERVICES

BY GRACE OF THE ALMIGHTY GOD, THE MINISTER OF INDUSTRY OF THE REPUBLIC OF INDONESIA,

Considering:
That in the framework of implementing the provision on the use of domestic product in the procurement of Government goods/services as governed in Presidential Regulation No. 54/2010 concerning Procurement of Government Goods/Services and based on the provision in the Second dictum of Presidential Instruction No. 2/2009, concerning Use of Domestic Products in the Procurement of Government Goods/Services, it is necessary to stipulate Regulation of the Minister of Industry concerning Guideline for Using Domestic Product in the Procurement of Government Goods/Services;

In view of:
1. Presidential Regulation No. 47/2009 concerning Establishment and Organization of State Ministries; 2. Presidential Regulation No. 24/2010 concerning Position, Duty and Function of the State Ministries and Organization Structure, Duty and Function of Echelon I of the State Ministries; 3. Presidential Regulation No. 54/2010 concerning Procurement of Government Goods/Services; 4. Presidential Decree No. 84/P/2009 concerning Establishment of United Indonesia Cabinet II Period Year 2009-2014; 5. Regulation of the Minister of Industry No. 105/M-IND/PER/10/2010 concerning Organization and Work Procedure of the Ministry of Industry;

HAS DECIDED: To stipulate:

REGULATION OF THE MINISTER OF INDUSTRY CONCERNING GUIDELINE FOR USING DOMESTIC PRODUCT IN THE PROCUREMENT OF GOVERNMENT GOODS/SERVICES

CHAPTER I GENERAL PROVISION

Article 1 In this Ministerial Regulation: 1. Domestic products are goods/services including design and build and engineering thereof are produced or carried out by company investing and producing in Indonesia, which process or carrying out thereof may use imported basic material/component. 2. Industry is an economic activity to produce goods, by means of processing basic material, fabrication/assembling of goods using basic material or component which structuring may change the nature, physical condition, and/or function of the goods so as to have more efficiency and higher economic value, including industrial activities on technical services closely related thereto, and information technology industry. 3. The ministry/institution/other regional instrument in the form of task force, hereinafter called as K/L/D/l, is agency/institution using State Revenue and Expenditure Budget (APBN) and/or Regional Revenue and Expenditure Budget (APBD). 4. Goods are items in compact and decomposed nature, covering basic material, semifinished goods, finished goods/equipment, which specifications are stipulated by the Budget User. 5. Services are working services which technical planning and specification are determined by user and which process is under the supervision of the Budget User. 6. Level of Local Content, hereinafter referred to as TKDN, is the volume of local content in the goods, services and consolidated goods and services. 7. Company Benefit Weight, hereinafter called as BMP, is value of appreciation to company investing in Indonesia for empowering Micro and Small businesses as well as small cooperatives by means of partnership, maintenance health, occupational and environmental safety, empowerment of the environment (community development); and providing after sale service facilities. 8. Verification is an activity to verify Achievement of TKDN and BMP calculated by the Goods/Services Provider with the data taken or collected from business activities of

goods/services provider according to use of local products in the procurement of goods/services for the Government, 9. List of Inventory of Locally Produced Goods/Services is a list of local products, containing the names and addresses of the producers, kinds of products, specification, standard, capacity, value of TKDN, and value of BMP. 10. List of Group of Locally Produced Goods/Services is a list of goods/services locally produced compiled based on the group of goods/services. 1. 11 Clarification is an activity to request for further clarification by the Budget User to the Ministry of Industry on the achievement of TKDN in the List of Inventory of Locally Produced Goods/Services. 11. Budget User is Official holding the authority on the use of budget of the Ministry/Regional Instrument Work Force or Official equivalent to other Institution of APBN/APBD User. 12. Goods/services provider is business entity or individual person which business activities provide goods/services. 13. Producer is business entity or individual person which business activities produce goods/services. 14. Minister shall be minister carrying out government administration in the field of industry.

CHAPTER II SCOPE
Article 2 Provision on the use of local products in the procurement of government goods/services shall apply for: a. Procurement of Goods/Services within K/LID/I which finance either partly or entirely originate from the APBN/APBD; b. Procurement of Goods/Services for investment within Bank Indonesia (BI), Stateowned Legal Entity (BHMN) and State-owned Business Entity (BUMN)/Regionalowned Business Entity (BUMD) which finance is partly or entirety charged to APBN/APBD; and c. Joint Operation Contract Contractor (KKKS) which finance is provided by pattern of joint operation between the Government and Business Entity.

CHAPTER II USE OF TKDN AND BMP

Article 3 TKDN covers TKDN on goods, services, and consolidated goods and services. Article 4 TKDN goods for Procurement of Goods/Services for the Government shall refer to the List of Inventory of Locally Produced Goods/Services issued by the Ministry of Industry. Article 5 (1) TKDN services for Procurement of Government Goods/Services shall be determined by calculate the TKDN by Services Provider. (2) The result of calculation of TKDN service as intended in paragraph (1) may be clarified by the Budget User and may be evaluated after the bid execution. Article 6 (1) Consolidated TKDN of goods and services for Procurement of Government Goods/Services shall be determined by calculating the TKDN by the Provider of Goods and Services. (2) Volume of component of TKDN of goods in consolidated TKDN of goods and services as intended in paragraph (1) shall refer to the List of Inventory of Locally Produced Goods/Services issued by the Minister of Industry. (3) The result of calculation of consolidated TKDN of goods and services as intended in paragraph (1) shall be clarified by the Budget User and may be evaluated after bid execution. Article 7 (1) BMP shall be provided to the Goods Producer, Services Provider, or Consolidated Goods and Services Provider based on the stipulated determining factor. (2) Volume of BMP for Procurement of Goods/Services for the Government shall refer to the List of Inventory of Locally Produced Goods/Services issued by the Ministry of Industry. Article 8 Provision and procedure for calculating TKDN and BMP shall be governed in Regulation of the Minister of Industry.

CHAPTER IV LIST OF INVENTORY OF GOODS/SERVICES

Article 9 (1) The Ministry of Industry shall issue List of Inventory of Locally Produced Goods/Services as reference to TKDN value and BMP value of goods in Procurement of Goods/Services for the Government. (2) TKDN value and BMP value for goods as intended in paragraph (1) shall be the value as verified by independent Surveyor. Article 10 (1) List of Inventory of Locally Produced Goods as intended in Article 9 paragraph (1) shall be publicized on-line on website of the Ministry of Industry. (2) List of Inventory of Locally Produced Goods as intended in paragraph (1) may also be issued in book form or CD-ROM. (3) List of Inventory of Locally Produced Goods/Services issued in book form or CD-ROM as intended paragraph (2) shall be amended and evaluated each year. (4) If there is difference in the value of TKDN or value of BMP in the List of Inventory of Locally Produced Goods/Services publicized on-line as intended in paragraph (1) and the List of Inventory of Locally Produced Goods/Services issued in book form or CD-ROM as intended in paragraph (2), prevails the TKDN value or BMP value in the List of Inventory of Locally Produced Goods/Services as intended in paragraph (1). Article 11 (1) List of Inventory of Locally Produced Goods/Services shall be submitted or spread out by the Ministry of Industry to Budget User and Provider of goods/services relating to procurement of Government goods/ services or other party that needs it. (2) If it is necessary the Committee for Provision of goods/services may clarify authenticity of the TKDN value set forth in the List of Inventory of Locally Produced Goods/Services to the Ministry of Industry.

CHAPTER V LIST OF GROUP OF GOODS/SERVICE

Article 12 (1) The Budget User in executing procurement of goods/services for the Government as intended in Article 3 shall refer to the List of Group of Locally Produced Goods/Services as set forth in Attachment-I to this Ministerial Regulation.

(2) Goods/Services not set forth in the List of Group of Locally Produced Goods/Services as intended in paragraph (1), may be treated as locally produced goods/services based on proposal of Echelon II Official of the Ministry of Industry in charge of goods/services industry. (3) List of Group of Locally Produced Goods/Services as intended in paragraph (1) may be added or reduced periodically based on Ministerial Regulation.

CHAPTER VI VERIFICATION OF TKDN

Article 13 (1) If there is objection to the result of calculation of TKDN as intended in Article 5 paragraph (1) and Article 6 paragraph (1), the TKDN may be verified by the Budget User. (2) The verification as intended in paragraph (1) shall be conducted using the data belonging to the Goods/Services Provider, the data belonging to goods/services industry (vendor), or data in the List of Inventory of Locally Produced Goods/Services. (3) The verification as intended in paragraph (1) in procurement process of goods/services may be conducted in conducting the work or after implementation of the work is completed. (4) All costs arising from verification activity as intended in paragraph (1) shall be charged to the requester of verification, unless declared otherwise in the bid document. Article 14 Verification of TKDN value of goods as intended in Article 9 paragraph (2) may be conducted on any product produced or at least produce its prototype by the Goods Provider. Article 15 TKDN value or BMP value as intended in Article 9 paragraph (2), Article 13, and Article 14 shall be verified by independent Surveyor institution that is competent in its field and appointed by the Minister.

Article 16 (1) TKDN value of goods resulting from verification shall be valid for 2 (two) years. (2) The result of verification of TKDN value of services and TKDN of services and TKDN of consolidated goods and services as intended in Article 5 and Article 6 applies to each bid/contract.

(3) The TKDN value of goods resulting from verification as intended in paragraph (1) must be ratified by the Official appointed by the Secretary General of Ministry of Industry. (4) Application for ratification of achievement of TKDN shall be applied to the Official as intended in paragraph (3) supported by recapitulation of the result of calculated TKDN up to the goods in second level according to the format set forth in Attachment II to this Ministerial Regulation. (5) If the verification on the TKDN value of goods is conducted prior to expiry of the validity as intended in paragraph (1), the result of the new verification shall apply for 2 (two) years.

CHAPTER VII TEAM FOR IMPROVEMENT IN USE OF LOCAL PRODUCTS Part One P3DN Team of the State Ministry/Non-Ministry Governmental Institution
Article 17 (1) To optimize use of local products in the respective K/L/D/I, B!, BHMN, BUMN, BUMD, and KKKS as intended in Article 2, will be established a Team for Improvement Use of Local Product hereinafter called as P3DN Team at K/LID/I, BI, BHMN, BUMN, BUMD, and KKKS. (2) Any establishment of P3DN Team as intended in paragraph (1), must be positioned under the coordination: a. for the State Ministry/Non-Ministry Governmental Institution must take position under the coordination of the Secretary General/Secretary of Ministry/Senior Secretary; b. for Regional Government of Province/Regency/Municipality must be positioned under the coordination of the Secretary of Region; and c. for Bl, BHMN, BUMN, BUMD and KKKS based on the provision prevailing on the respective work unit. (3) P3DN Team at K/L/D/I as intended in paragraph (1) may be established at the work unit other than the Secretary General/Secretary of Ministry/Senior Secretary/Regional Secretary so long it remains under the coordination of the Secretary General/Secretary of Ministry/Senior Secretary/Regional Secretary. Article 18 (1) The P3DN Team of the State Ministry/Non-Ministry Governmental Institution as intended in Article 17 paragraph (1) has the duty to:

a. coordinate, supervise and evaluate implementation of the guideline on the use of local products within the respective agency; b. monitor and if necessary witness the production process and/or implementation of the use of local products; c. make final interpretation on the issue on authenticity of the volume of TKDN between the provider of Goods/Services and Procurement of Goods/Services Team (Bidding Team); and d. carry out other duty relating to the use of local products provided by the Minister/the respective Management. (2) The P3DN Team shall report the result of implementation of duty as intended in paragraph (1) periodically once every 6 (six) months to the Minister/the respective Management with copy to the Minister of Industry as Chairman of P3DN National Team. Article 19 (1) Composition of membership of P3DN Team of the State Ministry/Non-Ministry Governmental Institution as intended in Article 17 paragraph (1) shall refer to composition of membership as specified in Attachment Ill to this Ministerial Regulation. (2) Representative of KADIN, certain relevant Association and/or Surveyor as intended in paragraph (1) shall be appointed by the Chairman of P3DN Team of the State Ministry/Non-Ministry Governmental Institution concerned based on each issue encountered. Article 20 The Minister/Management of the respective agency as intended in Article 19 paragraph (2) shall report realization on the use of local products by the respective agency to the Minister of Industry as Chairman of National Team periodically once every 6 (six) months for further submission to the President.

Part Two P3DN Team of Regional Government of Province/Regency/Municipality

Article 21 (1) The P3DN Team of Regional Government of Province/Regency/Municipality as intended in Article 17 paragraph (1) have the duty to: a. coordinate, supervise and evaluate implementation of the guideline on the use of local product within the respective agency; b. monitor and if necessary present witnesses in the production process and/or implementation of the use of local products;

c. make final interpretation on authenticity of the volume of TKDN between the Provider of Goods/Services and the Procurement of Goods/Services Team (Bidding Team); and d. carry out other duty relating to the use of local products provided by the respective Governor/Regent/Mayor. (2) The P3DN Team shall report the result of implementation of duty as intended in paragraph (1) periodically once every 6 (six) months to the Governor/Regent/Mayor respectively with copy to the Minister of Industry as Chairman of P3DN National Team. Article 22 (1) Composition of membership of P3DN Team of Regional Government of Province/Regency/Municipality as intended in Article 17 paragraph (1) shall refer to the composition of membership as specified in Attachment IV to this Ministerial Regulation. (2) Representative of KADINDA, certain relevant Association and/or Surveyor as intended in paragraph (1) shall be appointed by the Chairman of P3DN Team of Regional Government of Province/Regency/Municipality concerned based on consideration on each issue encountered. Article 23 The Governor/Regent/Mayor as intended in Article 21 paragraph (2) shall report realization of use of local products at the respective agency to the Minister of Industry as Chairman of National Team periodically once every 6 (six) months for further submitted to the President.

Part Three P3DN Bl, BHMN, BUMN, BUMD Teams and KKKS
Article 24 (1) The P3DN BI, BHMN, BUMN, BUMD Teams and KKKS as intended in Article 17 paragraph (1) shall have the duty to: a. coordinate, supervise and evaluate implementation of guideline for use of local products within the respective agency; b. monitor and if witnesses are required in processing the products and/or use of local products; c. provide final interpretation of issue on the authenticity of the volume of TKDN between the provider of Goods/Services and the Team of Procurement of Goods/Services (Bid Team); and d. implementation of other duty relating to the use of local products provided by the respective Management.

(2) P3DN BI, BHMN, BUMN, BUMD Team and KKKS shall report the result of implementation of duty as intended in paragraph (1) periodically once every 6 (six) months to the respective Management thereof with copy to the Minister of Industry as Chairman of the P3DN National Team. Article 25 Composition of membership of P3DN BI, BHMN, BLJMN, BUMD Team and KKKS as intended in Article 17 paragraph (1) shall refer to the composition of membership as specified in Attachment V to this Ministerial Regulation. Article 26 Management of BI, BHMN, BUMN, BUMD and KKKS as intended in Article 24 paragraph (2) shall report realization on the use of local products within the respective agency to the Minister of Industry as Chairman of National Team periodically once every six (6) months for further subsistence to the President.

Part Four Validity of P3DN Team and Finance

Article 27 P3DN Team as intended in Article 17, Article 21, and Article 24 has validity for 1 (one) year and may be extended. Article 28 A expenses required by the P3DN Team of State Ministries/Non-Ministry Governmental Institution as intended Article 17 for implementation on the use of local products at the State Ministry/Non Ministry Governmental Institution shall be charged to the respective agency's APBN. Article 29 All expenses required by the P3DN Team of Provincial/Regency/Municipality Government as intended in Article 21 for implementation of use of local products at the Provincial/Regency/Municipality Regional Government shall be charged to the respective agency's APBD. Article 30 All expenses required by the P3DN Bl, BHMN, BUMN, BUMD Team and KKKS as intended in Article 24 for implementation on the use of local products at the respective agency shall be charged to the respective agency budget.

CHAPTER VIII REPORTING TO P3DN NATIONAL TEAM

Article 31 (1) Implementation of procurement of goods/services as intended in Article 3 shall be reported by the Management of K/LID/I, BI, BHMN, BUMN, BUMD and KKKS to the Minister as Chairman of P3DN National Team once every 6 (six) months by January 15 and July 15 in the year concerned. (2) The Minister as Chairman of P3DN National Team shall report the result of implementation of procurement of goods/services for the Government to the President once every six (6) months at the latest by February 5 and August 5 in the year concerned. (3) Report format of the Management of K/L/D/I, BI, BHMN, BUMN, BUMD and KKKS as intended in paragraph (1) shall be as specified in Attachment VI to this Ministerial Regulation;

CHAPTER IX AWARD FOR USE OF LOCALLY PRODUCED GOODS

Article 32 (1) The Minister shall evaluate and give ranking each year to the Management of K/LID/I, BI, BHMN, BUMN, BUMD and KKKS on the used of locally produced goods in the procurement of goods/services for the Government. (2) The evaluation and provision of ranking as intended in paragraph (1) shall be exercised by the P3DN National Team Working Group stipulated by Ministerial Regulation;

CHAPTER X OTHER PROVISIONS

Article 33 Management of K/LID/I, SI, SHMN, BUMN, BUMD and KKKS as intended in Article 2 in Procurement of Goods/Services within the respective environment may require stricter TKDN, so long it does not contravene the provisions in Presidential Regulation No. 54/2010 concerning Procurement of Government Goods/Services.

CHAPTER XV CLOSING PROVISION

Article 34 This Regulation of the Minister takes effect on the date it is stipulated. For public cognizance, this Ministerial Regulation shall be promulgated by placing it in the State Gazette of the Republic of Indonesia.

Stipulated in Jakarta on February 21, 2011 MINISTER OF INDUSTRY OF THE REPUBLIC OF INDONESIA

signed,

MOHAMAD S. HIDAYAT