New PBG Building Permit Approval System for Indonesia
Key Differences Between PBG and IMB Building Approval Permit in Indonesia
In November 2020, Indonesia enacted Law No. 11 of 2020 on Job Creation, commonly known as the Omnibus Law.
Among the many reforms introduced by this law, one significant change is the replacement of the Building Permit (Izin Mendirikan Bangunan or IMB) with the Building Approval Permit (Persetujuan Bangunan Gedung or PBG).
This shift aims to streamline the building permit process, foster investment, and simplify bureaucratic procedures. This article explores the key differences between the PBG and the IMB, highlighting how this change impacts various stakeholders.
Legal Framework
IMB: The IMB was regulated under Law No. 28 of 2002 on Building and the Government Regulation No. 36 of 2005 on the Implementation Regulation of Law No. 28 of 2002.
PBG: The PBG is regulated under Law No. 11 of 2020 on Job Creation, and further detailed in the Government Regulation No. 16 of 2021 on the Implementation of Law No. 28 of 2002 concerning Buildings.
Scope and Requirements
IMB: The IMB focused on the administrative compliance of building plans with zoning regulations, safety standards, and environmental impact.
Applicants were required to submit detailed architectural, structural, mechanical, and electrical plans for approval.
PBG: The PBG shifts the focus from detailed plan approval to a more comprehensive building approval process that ensures buildings meet functional requirements. This includes standards for safety, health, comfort, and environmental sustainability.
The PBG process is designed to be more integrated and less burdensome on detailed plan submissions.
Application Process
IMB: The application for an IMB involved multiple stages of document submission and review, often resulting in lengthy approval times. Each stage required approval from different governmental departments, making the process complex and time-consuming.
PBG: The PBG process is intended to be more streamlined and centralized. The application can be submitted online through a single-window system, reducing the need for physical paperwork and in-person visits. This digital approach aims to cut down the approval time significantly.
Role of the Government
IMB: The IMB process involved several governmental agencies at both the regional and national levels, each with its own set of requirements and checks, leading to potential delays and inconsistencies.
PBG: The PBG introduces a more coordinated approach, with a single government body taking the lead in the approval process. This body ensures that all relevant standards are met and facilitates communication between different departments, aiming to create a more efficient and consistent approval process.
Inspection and Compliance
IMB: Compliance with the IMB was primarily enforced through periodic inspections by local government officials. Non-compliance could result in fines, penalties, or the revocation of the building permit.
PBG: Under the PBG system, there is a greater emphasis on self-assessment and post-construction audits. Building owners are required to conduct self-assessments and submit compliance reports.
The government may conduct random audits to verify compliance, focusing on the operational phase of buildings to ensure ongoing adherence to standards.
Impact on Investors and Builders
IMB: The IMB process was often seen as a barrier to investment due to its complexity and the time required for approval. Delays and bureaucratic hurdles could discourage both domestic and foreign investors from pursuing construction projects in Indonesia.
PBG: The PBG aims to create a more business-friendly environment by simplifying the approval process and reducing the time required to obtain permits. This change is expected to attract more investors and encourage faster project initiation and completion, contributing to economic growth.
Helping to Promote Investment in Indonesia
The transition from the IMB to the PBG represents a significant shift in Indonesia’s approach to building regulation. By simplifying the approval process, focusing on functional requirements, and leveraging digital technology, the PBG system aims to reduce bureaucratic obstacles and promote investment in the construction sector.
While the long-term impact of these changes will unfold over time, the initial response suggests that the PBG is a step towards a more efficient and investor-friendly regulatory environment.
