Gov’t Stipulates Arun Lhokseumawe SEZ

Lhokseumawe, Aceh

In order to develop economic activities in Lhokseumawe and North Aceh Regency considered having strategic values for the development of national economy, the Government deems it necessary to develop the areas into a Special Economic Zone (SEZ). Moreover, the areas of Arun Natural Gas Liquefaction in Lhokseumawe, Dewantara, and Jamuan in North Aceh Regency, Aceh Province, are considered to have met the criteria and requirements for an SEZ.

With regard to the consideration, President Joko ‘Jokowi’ Widodo on 17 February 2017 signed a Government Regulation Number 5 of 2017 on Arun Lhokseumawe Special Economic Zone. “With this Government Regulation, Arun Lhokseumawe SEZ is stipulated,” Article 1 of the Government Regulation says.

According to the Government Regulation, Arun Lhokseumawe SEZ covering 2,622.48 hectares that includes 1,840.8 hectares in Arun Natural Gas Liquefaction Area in Lhokseumawe, Aceh Province; 582.08 hectares in Dewantara, North Aceh Regency; and 199.6 hectares in Jamuan, North Aceh Regency, Aceh Province.

Arun Lhokseumawe SEZ as intended consists of: a. Export Processing Zone; b. Logistics Zone; c. Industrial Zone; d. Energy Zone; and e. Tourism Zone.

With this Government Regulation, Aceh Governor shall stipulate business entities that build and manage Arun Lhokseumawe SEZ within 90 (ninety) days since the enactment date of this Government Regulation. “Business entities as intended are responsible for financing the construction and management of Arun Lhokseumawe SEZ,” Article 5 paragraph (2) of the Government Regulation says.

The business entities shall conduct the construction of Arun Lhokseumawe SEZ until it is ready to operate within a period not exceeding 3 (three) years since the enactment date of this Government Regulation.

This Government Regulation also states that National Board of Special Economic Zone (SEZ National Board) conducts annual evaluation of the construction of Arun Lhokseumawe SEZ by the business entities as intended.

In case when Arun Lhokseumawe SEZ is not ready to operate in the third year of the construction, SEZ National Board will: a. change the space or zones; b. extend the due date for 2 (two) years at maximum; c. change the business entities; and/or d. propose for a cancellation and revocation of Arun Lhokseumawe SEZ.

“Should after the extention, Arun Lhokseumawe SEZ is still not ready to operate and it is not caused by negligence and force majeure from the business entities, SEZ National Board may give time extention for the construction,” Article 6 paragraph (4) of the Government Regulation says.

This Presidential Regulation Number 5 of 2017 which was promulgated by the Minister of Law and Human Rights Yasonna H. Laoly shall apply as of the date of its enactment, on 20 February 2017. (JDIH Kemenkumha/ES) (RA/ MMB/ YM/Naster)