Indonesia Moves to Foster Industrial Zone Governance

RRI.CO.ID, Jakarta - The Ministry of Industry has reaffirmed its commitment to strengthening the management of industrial zones across Indonesia to ensure that industrial activities operate with legal certainty. The move is aimed at creating a conducive, safe, and integrated business environment while enhancing the attractiveness of investment in various regions.

Vice Minister of Industry, Faisol Riza, said industrial zones are one of the key drivers of the national economy. Therefore, businesses need certainty in carrying out their industrial activities, supported by clear regulations and a well-defined business environment.

“We also call on industrial zone managers and local governments to work together to maintain order and ensure a comfortable environment in industrial zones,” the Vice Minister said, as quoted in an official statement issued in Jakarta on Wednesday, September 9, 2026.

In line with this commitment, the Ministry of Industry is ensuring that zones that have yet to obtain official status complete their business licensing requirements, including securing an Industrial Estate Business License (IUKI). Obtaining an IUKI is a crucial foundation to ensure that manufacturing activities operate under transparent, professional, and highly competitive governance.

“We view the industrial activities that have grown in these Industrial Designated Areas (KPI) as economic potential that needs to be properly managed and strengthened. Fulfilling the IUKI requirement is expected to provide a clearer governance framework while supporting the sustainability of investment and business activities,” he added.

According to him, the management and formalization process needs to be carried out gradually, measurably, and transparently while ensuring the continuity of industrial activities. The government is also promoting open communication to identify the needs of industrial zone managers and tenants and follow them up according to the respective authorities of government institutions.

Furthermore, as part of efforts to strengthen the governance of industrial areas nationwide, the Ministry of Industry is paying particular attention to Industrial Designated Areas (KPI), or industrial zones, including areas that have developed organically in various regions.

KPI refers to land specifically allocated for industrial activities under regional spatial plans. However, as these areas develop, they require operational restructuring to meet governance standards and obtain the necessary business licensing for industrial zones.

With clear governance, industrial zones can provide essential infrastructure, logistical mobility, utilities, and integrated environmental management. This can reduce potential operational disruptions, allowing businesses to focus on sustainably expanding their production capacity.

As a concrete step toward improving industrial zone management on the ground, the Ministry of Industry is actively strengthening guidance for KPI Industrial Zones so they can develop into officially recognized industrial estates holding an IUKI. The process covers spatial planning compliance, licensing requirements, basic infrastructure readiness, and service management for tenants.