Apindo Firmly Rejects The Restrictive Rules Of The Ministry Of Health, BGS Promises To Accommodate Entrepreneurs' Input

Business actors expressed deep concern about Government Regulation (PP) Number 28 of 2024 and its derivative rules, the Draft Regulation of the Minister of Health (RPMK) which is an initiative of the Minister of Health (Menkes) Budi Gunadi Sadikin. The regulations highlighted are zoning the prohibition of sales and advertisements for tobacco products, tar and nicotine levels, as well as packaging plain cigarettes without a brand.

Previously, at a press conference in Jakarta some time ago, the Indonesian Employers' Association (Apindo) voiced complaints of more than 20 cross-sectoral associations, which included labor, manufacturers, retail, agriculture, and the creative industry. The complaint has a significant impact on the regulation on the tobacco products industry and related sectors.

One of the main points of Apindo's criticism is the implementation of a brandless plain cigarette packaging policy which is considered to have the potential to reduce the competitiveness of local tobacco products and open space for the circulation of illegal cigarettes.

Apindo Deputy Chairperson Franky Sibarani stated that this regulation will not only harm producers but also threaten thousands of workers in the tobacco sector.

"This policy could trigger an uncontrolled increase in illegal cigarettes and lead to a mass layoff (PHK)," Franky said, quoted Monday, October 14.

Apindo also rejected restrictions on tar and nicotine levels. They considered that the reduction in this limit would not be effective in reducing cigarette consumption, instead it hit the industry as a whole, from tobacco farmers to workers.

Franky reminded that this policy will increase dependence on tobacco imports and weaken domestic production, thereby increasing the potential for significant losses.

"Apindo emphasized that this policy has the potential to reduce the competitiveness of local products and actually open up opportunities for increasing illegal cigarettes," he added.

Apindo also criticized policies related to the zoning of selling cigarettes and electronic cigarettes within a radius of 200 meters from educational facilities and children's playgrounds. This restriction is considered to make it difficult for small traders who have implemented regulation on the age of purchase. They are worried that the regulation will kill small businesses that depend on tobacco products.

"The industry is currently very concerned. The regulations made should not kill the tobacco industry and related sectors," he explained.

Apindo urged that the process of drafting and implementing PP 28/2024 and RPMK be more open and involving tobacco business actors and their derivatives to tobacco farmers affected by the policy. This aspiration is to realize a more friendly policy towards related business actors.

"We do not reject the regulations, but this regulation must be prepared and implemented fairly and in a balanced manner. Considering the latest economic developments and the complexity of the position of the tobacco products industry," he said.

On a separate occasion, the Indonesian Streaming Video Association (AVISI) also voiced that the Ministry of Health involved them in regulatory discussions. AVISI is worried that the ban on displaying tobacco and electronic cigarette content in the Permenkes Draft will harm various sectors, including the creative industry, video streaming, and films.

In addition, a study from the Institute for Development of Economics and Finance (INDEF) shows that the economic impact of this policy can be very large. The study estimates an economic loss of IDR 460 trillion, which includes a potential reduction in tax revenues of up to IDR 160.6 trillion and an impact on the projected industry of IDR 308 trillion.

With the losses incurred, Apindo urged the government to reconsider regulations that will have an impact on the tobacco products industry and the ecosystem in them, including thousands of workers and workers, as well as tobacco farmers and cloves.

Meanwhile, Minister of Health Budi Gunadi Sadikin emphasized that the government has accommodated input from business actors, including Apindo, in designing PP 28/2024 and RPMK.

He explained that the main objective of this policy is to suppress cigarette consumption in Indonesia, especially among teenagers. Budi emphasized that the process of finalizing this regulation is still ongoing and input from entrepreneurs will still be considered.

"We actually involved Apindo for this discussion. We are currently in the process of being finalized with them. We are listening. Because it is still in process," he said.