Government Demands New Investment Commitment From Apple Worth $1 Billion

Government Demands New Investment Commitment From Apple Worth $1 Billion

Thursday, 05 Dec 2024

The Minister of Investment and Downstream Industry/Head of the Investment Coordinating Board (BKPM), Rosan Perkasa Roeslani, provided insights regarding the investment developments of the American electronics company, Apple, in Indonesia. His remarks were made in response to inquiries from members of Commission XII of the Indonesian House of Representatives concerning Apple's investment.

Rosan indicated that, overall, Apple's investment in Indonesia remains relatively minimal. Consequently, during a recent meeting with Apple representatives, he requested a new investment commitment of 1 billion USD, equivalent to approximately 15.95 trillion IDR (based on an exchange rate of 15,957 IDR). He emphasized the need for this commitment to be formalized through a written statement from Apple.

"I have requested, God willing, that for the first phase, I will receive a written statement. I am asking them for an investment of 1 billion USD for the initial phase," Rosan stated during a working meeting with Commission XII at the Parliament Complex in Senayan on Tuesday, December 3, 2024. "Therefore, I am asking them to do this in writing. Hopefully, within a week, I will be able to secure that commitment," he asserted. Should the investment commitment be successfully obtained, Rosan plans to coordinate with the Ministry of Industry.

He noted that the government is indeed striving to ensure that Apple's investment in Indonesia is beneficial and equitable. "We want to see them, and we will assess it fairly. They should gain benefits here, invest here, and create job opportunities locally. Most importantly, we need to consider how the global value chain operates. The supply chain should also shift its investments to us," Rosan expressed. "I hope to receive their commitment within a week, as we are also proactively engaging with them," he reiterated.

Previously, the Minister of Industry, Agus Gumiwang Kartasasmita, stated that Apple has yet to fulfill its total investment commitment of IDR 1.7 trillion. This investment commitment was based on an agreement set to be completed by 2023. As a result, the sale of the iPhone 16 in Indonesia remains prohibited.

Agus Gumiwang elaborated that an audit has been conducted to determine the shortfall in investment that Apple must address. The audit revealed that the outstanding amount is less than IDR 300 billion. "Indeed, based on the survey, there is an investment shortfall that needs to be met, which is less than IDR 300 billion. For a company of that size, that is negligible," Agus remarked during a meeting with Commission VII of the House of Representatives on Tuesday, November 12, 2024.

Furthermore, Agus Gumiwang disclosed that the sales value of Apple products, including mobile phones, laptops, and tablets (HKT), in Indonesia for 2023 exceeded IDR 30 trillion. He indicated that the government would seek solutions to this situation. "In 2023 alone, Apple’s sales in Indonesia, specifically for HKT products, surpassed IDR 30 trillion. Therefore, we will consider the possibility of setting a higher domestic component level (TKDN)," Agus asserted.

The government’s action is aimed at ensuring fairness with other companies that have adhered to the domestic component level (TKDN) regulations in Indonesia. This is particularly relevant for companies that have established factories, thereby creating numerous job opportunities. Recently, Apple submitted a new investment proposal to the Ministry of Industry amounting to 100 million US dollars, equivalent to approximately 1.58 trillion Indonesian rupiah.

Minister of Industry Agus Gumiwang indicated that Apple’s latest investment proposal does not yet satisfy four criteria of fairness. He confirmed this after the Ministry conducted a technical assessment of Apple’s proposal based on these four aspects. These include, first, a comparison of Apple’s investments in countries other than Indonesia, as well as a comparison of investments in mobile phone brands, handheld computers, and other tablets available in the country. Additionally, the assessment considered value creation, state revenue, and job creation resulting from the proposed investment. "Based on the technical assessment, the figures do not yet meet the standards we consider fair," Agus stated. (putri@insightinnews.com)

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