Risk Based Business Licensing

Risk Based Business Licensing

Based on Government Regulation Number 5 of 2021 concerning the Implementation of Risk-Based Business Licensing ("PP 05/2021") Risk-based business licensing is the legality given to business actors to start and run their business and/or activities based on the level of potential for injury or loss from a hazard or a combination of possibilities and consequences of hazards. 

Risk Analysis in Risk-Based Business Licensing
Risk-based business licensing is carried out based on the determination of the risk level and scale rating of business activities including micro, small, and medium enterprises (MSEs) and/or large businesses. The determination of the risk level is carried out based on the results of the risk analysis. Later, this risk level will determine the type of business licence that must be fulfilled by business actors. 

The risk analysis is conducted by the central government through: 

A.    Identification of business activities 
1.    Low risk level
Business licensing for this business activity is in the form of a Business Identification Number (NIB) which is the identity of the business actor as well as the legality to carry out business activities. 
Especially for Micro and Small Enterprises, NIB also applies as an Indonesian national standard (SNI) and halal guarantee statement. 
In other words, NIB applies as (Article 12 paragraph (1) and paragraph (2) of GR 5/2021):
- The identity of the business actor.
- Legality to carry out business activities.
- Indonesian National Standard (SNI) as referred to in the laws and regulations in the field of standardisation and conformity assessment (PP Number 34 of 2018 concerning the National Standardisation and Conformity Assessment System).
- Halal guarantee statement as referred to in the laws and regulations in the field of halal product guarantee (PP Number 39 of 2021 concerning the Implementation of the Halal Product Guarantee Field).
2.    Medium risk level
This risk level is divided into low medium and high medium risk levels. 
Business licences for low and high medium risk level business activities are in the form of NIB and standard certificates. 
In relation to standard certificates, the standard certificates issued for low and high medium risk level business activities are different. Specifically for medium-high risk level business activities, a new standard certificate can be issued after the NIB is issued and the business actor makes a statement through the OSS system, based on the results of verification of the fulfilment of business activity implementation standards by the business actor. 
3.    High risk level
Business licensing for this business activity is in the form of NIB and permit. Both are business licences for business actors to carry out operational and/or commercial business activities. The permit in question is the approval of the central government or local government for the implementation of business activities that must be fulfilled by business actors before carrying out their business activities. 
In the event that business activities with a high level of risk require the fulfilment of business standards and/or product standards, the central or regional government in accordance with their respective authorities issues business and product standard certificates in accordance with verification of standard fulfilment. 

B.    How to Know the Risk Level 
The Risk Level is the result of multiplying the hazard value with the potential hazard value, and this determines the type of business licence. The Risk Level of a business activity is determined by applying the concept of maximum risk to all criteria used in the risk analysis process, so that no risk is neglected when determining the type of Business Licence.
Risk analysis must be carried out in a transparent, accountable manner and prioritise the precautionary principle based on data and/or professional judgement, in order to make it easier to know the level of risk owned, the following steps can be followed: 
1.    Open Oss.go.id Web 
2.    Search for KBLI code 
3.    View Risk Type

- Written By Rizky Prakoso -