1. Introduction

Preamble of 1945 Constitution stated that the goal of the Republic of Indonesia which were established to advance the general welfare and the intellectual life of the nation. It is also mandated in the Constitution of 1945 that the State should meet the basic needs for the sake of citizens’ welfare. Therefore the effectiveness of the Government system is determined by the organizational quality of the public service.

In the effort to further enhance the service to the community and businessmen, and to follow up the publication on the regulation of the Minister of the Internal Affair No. 20 in 2008, Government Service Agencies of Malang formed Integrated Licensing Service Agency (BP2T) that processes 15 types of permissions. Some authority delegated from Mayor of Malang to BP2T in permit publication that comply the Regulatory mandate of the Minister of Internal Affair No. 20 in 2008. It’s about a change from the Office into the Agency's reform policies contained in Regional Regulation No. 7 of 2008 on the Inspectorate Organization, the Regional Development Planning Agency, Integrated Licensing Service Agency and Regional Technical Institutions [1]. It also followed up by the Mayor of Malang Regulation No. 68 of 2008 about the breakdown of the basic tasks and functions of Integrated Licensing Services Agency (BP2T). In its development, the Regulations are replaced by the Perwal No. 60 in 2012 about the breakdown of the basic tasks, functions and procedure of BP2T [2].

Quality improvement of licensing service was implemented by the Department of Licensing of Malang in 2006. A significant trimmed bureaucratic procedure conducted on licensing services, a line with the Mayor of Malang Regulation No.13 of 2006 about the system and standard operating procedures of City Services. Most issues were in terms of signing the permit of Interference (Hinder Ordonantie - HO) that was originally signed by the Mayor. There was also a deregulation of Mayor Regulation on the mechanism of the licensing service (Perwal No. 13 of 2006 and Perwal No. 6 in 2007) – mainly on the building permit (IMB).

Before the publication of those two regulation, the requests for Building Permits of level 2 (two) floor required to attach construction calculations to obtain recommendations from the Office of Kimpraswil (Settlement and Regional Infrastructure). Then by the publication of Perwal No.6 of 2007, besides required construction calculation, it also need recommendations from the Office of Kimpraswil on a non-residential building with at least 3 (three) floors.

The implementation of this policy is not simple, because its implementation with regard to the dimensions of the interpretation, organization and support of existing resources. Formation of BP2T Malang is an attempt to simplify the process of licensing services. The principle of licensing service of BP2T is the principle of first-rate service which quick, easy, simple, clear, transparent, efficient, effective, economical, square, as well as the support and synergy of all stake holder of BP2T. By implementing an integrated licensing service system as well as the support of stakeholders, expected response of the community towards BP2T service will be more positive and public trust are likely to increase. Therefore, in line with the Administration's reform era changes need to be done in order to build BP2T ahead.

Public service in Indonesia is still fraught with uncertainties on time, costs, and practices. As a result, many residents are not able to take care of the service directly and reasonably, and prefer to use a broker. Public service reforms will certainly get a warm welcome from residents and gain the support of wider community [3].

Results of the 2002 Survey on Governance and Decentralization illustrated that the majority of citizens considers the practice of illegal retribution is reasonable and thus feel relieved because service of process can be finished faster. It is an indicator that the nation's citizens are becoming increasingly tolerant towards bad governance practices. These practices have dangerous tendencies for the sustainability of the nation [3].

Other survey results in the Radar Malang Newspaper stated that public service in Malang was still less satisfying for society [4]. Survey in 22 Districts in Southern Malang found most government officials positioned themselves as someone to be served, not (otherwise) serve the public. It means when there are people who submitted the licensing request would much abandoned and ignorance on administrative deficiencies.

Further survey took sample of the community and the business-related services in One-Stop Integrated Service Unit (UPT-SA). The existence of UPT-SA during this period is serves just as a provider of application forms and information for the applicants, while the process is still proceed by related agencies. This separate mechanism is particularly troublesome for citizens in administer the permissions. Therefore, one stop services become a solution for multiple services that community needs to address. One stop services were also used by other public or corporate services, such as library in UK [5] and gadget distributor Senao International Co. Ltd. in Taiwan [6].

In addition to the long time process, collusion practice occurred. The other weakness is UPT-SA has not revealed the cost allocation that required for each license. There is some sort of alleged of marked up to a permission [4].

While according to Malang Corruption Watch (MCW), public services in Malang are rated as less satisfying. They considered the cost is expensive and found illegal retribution. The impression was compounded mainly on unfriendly administration service. Public services in Malang are not in accordance with the award they ever received [7].

Previous explanation shows that the real condition of implementation in the public service is still lack of quality. Bureaucratic officials as actors involved in implementation have not been behaving to serve. This can be seen from the large number of complaints from the community either directly or via the mass media concerning the convoluted procedure. There is no certainty of a period of completion and costs to be incurred, terms which are not transparent, the attitude of the officers who are less responsive, lack of facilities and infrastructure support services. It result the low licensing request by the community, and create an opportunity illegal broker from outside the institutions concerned as well as the apparatus of the Agency itself. Another effect is the level of achievement on the potential regional acceptance from regional taxes and retribution sector become difficult. If the condition is left continuously, then it can give rise to a bad image of the Government. Therefore, we focused our research to describe and analyze:

1. Mechanisms and procedures for the implementation of the integrated service policy on trading license and registration list of industry in BP2T Malang.

2. Actors involved in the implementation of policies in BP2T Malang.

3. Quality of the service in BP2T Malang.

4. Restricting factors on the services of BP2T Malang.

2. Research Method

2.1. Study Object

Administratively, Malang occupies ±110,06 km² which is divided into five sub-districts, i.e. Kedungkandang, Sukun, Klojen, Blimbing, and Lowokwaru. Demographics data from Center of Statistics (BPS) of Malang in 2004, noted that the number of residents are 789.348, consisted of 392.994 male and 396.354 women.

Integrated Licensing Service Agency (BP2T) processes 15 types of permissions. Two permits that particularly assessed are Trade Business License (SIUP) and Registration List of Industries (TDI). BP2T has 54 personnel in charge to proceed the licensing [8].

The model that developed in BP2T Malang are: (1) Applicant submit the requirement documents for SIUP and TDI, (2) Service section check the completeness of the documents, (3) Licensing section: validation, coordinating the relevant agencies, review the field survey, calculate the cost, (4) Head of General Sub-division: acc on draft document, (5) Head of BP2T: signatures the permit documents, (6) Technical Staff: numbering the permits and released the permit to the applicant [8, 9].

Human resources of BP2PT Malang has total of 54 officer consisted of the Head of the Agency, Secretary, three head of Sub-Division, and 46 staff. A total of 46.3% Officials of BP2T have graduate high education. Most staff (55,6%) is youth (working period <10 years) and 57.4% of staff were in III grade (a, b, c, d) [8].

2.2. The Research Approach

This research conducted in qualitative approach [10] with more emphasis on the use of method of subjective meaning. Data from BP2T were collected and compiled to be analysed and interpreted. We assess the public service of the BP2T Malang, which emphasized on Trade Business License (SIUP) and Registration List of Industries (TDI).

2.3. Research Focus

2.3.1. Mechanisms and Procedures of Integrated Service

a. The mechanism of the service SIUP and TDI

b. Procedures and Financing filings SIUP and TDI

2.3.2. Actors in Integrated Licensing Service Policy

a. BP2T Apparatus

b. Department of Trade and Industry

c. Appellants

2.3.3. Quality of Integrated Licensing Service Policy

a. Tangible

b. Reliable

c. Responsiveness

d. Assurance

e. Empathy

2.3.4. Factors Affecting the SIUP and TDI

a. Supporting factors

b. Inhibiting factors

2.4. Data Processing

Data were collected by observation, interview and documentation. After performed data collection, we conducted data reduction. It defined as the process of selecting, sorting, simplifying and transformation of rough data.

Data display over rendering activity of information that has been compiled. We setup the data systematically with the order of focus and sub focus, simplify the researcher to analyze it. It also provided interpretations of the conclusion drawing or verifying. In sum, the activities are interpretation, subjective meaning on a phenomenon, and composing inter-relation between events, comparing, contrasting, and linking up the various events related to the object.

3. Result and Discussion

3.1. Integrated Licensing Services Agency (BP2T) of Malang

Integrated Licensing Service Agency (BP2T) processes 15 types of permissions. Delegation on some Mayor of Malang authority on The Licensing Permit implemented in accordance with the Regulation of the Minister of Internal Affair No. 24 in 2006 about the guidelines of Integrated One-Stop Service.

Those policies were reinforced by the Republic of Indonesia Act No. 25 of 2009 about public service [11]. In its development, the Mayor of Malang Regulation No. 68 of 2008 was replaced with Mayor of Malang Regulation No. 60 in 2012 about the breakdown of the basic tasks, functions and work procedures of Integrated Licensing Service Agency (BP2T).

3.1.1. Mechanism and Procedures in BP2T Malang

Government of Malang and community expect ideal conditions of public service, which is seen on the following indicators:

1. Procedure: fast, easy, clear, transparent, efficient, effective, economical, equitable, and punctual.

2. Attitude of service: empathic and responsive.

3. Support and synergy of all interested parties with BP2T (stakeholders).

The apparatus of licensing service of BP2T Malang as one of the informant stated that all officers master the procedure of licensing, albeit in a different explanation. The procedure for the applicant is simple and short, that they directly bring the document requirements to service counters in BP2T. However, only if the document requirements are complete then the officer proceeds to next procedure. The officer determines the survey time, coordinating with related technical agencies, print the document of permissions and took it to an authorized officer to be signed. Applicants with their corresponding provisions wait up to eight days to get the permissions.

Interview results indicate that the SIUP and TDI service corresponds to the charged cost from BP2T that is plastered on boards. The process is quick, easy and transparent, as long as all the requirements for the permit are fulfilled by the applicant.

Differences between normative and factual attitude were received by the applicants. In fact, the bureaucrats of service show different service to the applicants according to the socio-economic status, the social relationships with apparatus, physical appearance of ethnic, social and political affiliations, as well as intellectual level.

Based on the guidelines of BP2T terms and conditions, all costs arising as a result of the field work and coordinating the relevant agencies charged to the applicant. Nevertheless, there are also applicants who ultimately use brokers because the long queue and wasted time. Such services offer the applicant short time process of permits and definite (but more expensive) cost to do surveys. The public service guidelines established by the Ministry of Administrative Reform Kep.Men.PAN No. 63 in 2003, determined that the service should be simple, straightforward, easy to understand, obvious, certainty of time, accurate, easy and clear. We can assume that the service of SIUP by BP2T have met these indicators.

Delegation of authority on permissions to the Head Office of BP2T indeed simplify the permission management for applicant. However, sometimes a permit has been completed but it did not immediately released, because the officer looking forward to the 'tips' or some sort of service retribution. Nevertheless, the legal mechanism of Licences Service in BP2T Malang are as follows:

a. Submission of application files in the service counter

b. Inspection of files

c. The process of permissions (SK)

d. The release of permissions (SK)

Formation of BP2T is an attempt to trim the bureaucracy line that previously convoluted in applied the permissions. Initially, authority to sign the permits is held by the heads of related department. But it turns out that the process is still considered convoluted, thus the signing authority assigned to the head of BP2T (according to Mayor of Malang Regulation No. 20 of 2012). Towards such policies, the public inferred that:

a. The service of BP2T Malang is very well and in accordance with officers statements and information board that describes the service.

b. SIUP application would be easy and fast if all requirements are complete and in accordance with the procedure.

c. The service applied by BP2T is very nice, short, easy, and transparent charges. The process is straightforward as long as all the requirements were met.

d. BP2T Malang proceed the application carefully, and the requirements document then examined/validated. Location of businesses surveyed as needed and field investigation report were made.

3.1.2. SIUP and TDI Application in BP2T Malang

Actual policy implementation is not only relevant to the mechanism elucidation of political decisions into routine procedures through bureaucratic channels. But it should also concerns the implementation of conflict issues, decisions, and the object that affected by the policy [12]. In this study, the provision of public services, for example in requesting SIUP and TDI always shows the difference on service treatment.

Public policy also concerns the implementation of various components of services, i.e. human resources (attitude and behavior of the apparatus), facilities and infrastructure, management information systems and policies or guidelines of public service (legal basis and SOP). In releasing the SIUP and TDI, BP2T functioned both of service providers and releasing the permission that support one to another in providing excellent service to the community. Government's service to the community expressed by Denhardt [13] in Think Strategically, Act Democratically. It describes the integration of policy and program to be achieved effectively and successfully as a responsible with joint efforts in the process of togetherness.

Service of SIUP or TDI licensing request always follow particular procedure. The applicant and officer communicate the needs information about the procedure to apply SIUP or TDI. If the applicant documents complete the requirement, it would be proceed further with communication between officers. Behavior in communication with the applicant or fellow staff should be ethical. Coordination especially among officers is very important to proceed the permits.

Four types of services that affect SIUP or the TDI application are explained follow. Type 1 usually upholds justice because serving equally. Type 2 concerned more on relatives or acquaintances because family relations or friends. Otherwise, type 3 focuses on the desire to help others because they consider the applicant's disappointment if the services is not going well. Type 4 often occurs when the applicant suffered hindrance, both because the queue was too long, busy work, or some terms which have not been fulfilled. In other words, the attitude and behavior of officers in providing public services are closely related to the mechanisms and procedures.

3.1.3. Resources in BP2T Malang

Human Resources

Resources also had an important role in the policy implementation. However, clear and consistent conditions or rules, and accurate communication were needed. If not, then the implementation of the policy could not be effective.

Resources in the policy implementation include the expertise [14] staff to carry out the task, the command, and the advice of his superiors. In addition, there should be appropriateness on the required number of staff and expertise. The facilities to operate the policy implementation include: building (Office), equipment, and intensive fund.

Quality references always focus on community satisfaction/interest (Citizen Focused Quality). According to Denhardt [13], serve the Citizen, not customer which means that the public interest is the result of a dialogue about the value division of individual interests. Therefore, the officer of public service is not only responds to the community demand, but also build trust and collaboration with citizens. Thus satisfaction level in the form of feedback from the community helps the Government improving or developing the systems and procedures of the public service (in this case the licensing service). The community was also expected to concern the availability of human and non-human resources. The non-human resource that recently enhanced is web-based services, which use to manage the information system management [15].

Organization

Public organizations in providing services to the public are also trying to meet the desires or the satisfaction of citizens/communities. Nevertheless, public organization has a slight different compared to private organization, e.g. fairness, as prioritizes principles in providing the services. In this context, human resources (personnel of licensing service) become the consistent and fair determining factor on the existed system and procedures.

Most of the implementer can carry out the policy freely, due to reliance on the authority of policy makers. The implementer mostly depends on the attitude or disposition of a policy apparatus. In this study, it is clearly appears that the task of the official service is serving the public to obtain SIUP and TDI. The involvement of officer in the work procedure grouped into two activities, direct and indirect activity with the public. Although these activities are different, it has the same aim to help the community obtain SIUP and TDI.

Weakness

The existence of government policies in an effort to provide well services for community especially in BP2T affected by some factors: human resources (the officer), the mechanism of the services, fundamental regulation and socialization of the general services. We found a lack of socialization in BP2T which cause less understanding of community on the procedure for applied any form of licensing. It resulting a low level of licensing arrangements by the community. It also leads to decreasing the potential regional revenue of this sector.

The hindrance often appeared on the process of releasing the permits that tends to slow. Some perceptions were collected towards this licensing process, as follows:

1. Officer of SIUP and TDI in BP2T Malang

a) Process should follow thorough cost calculation, for accurate charges.

b) Officers would like to give the best and responsible performance.

c) Technical obstacles: (1) surveyed location requires specified technical review information by technical staff, (2) weather condition, (3) the applicant has not completes the document requirements.

d) The officers are bored with the routine tasks, faced different people with different desires, while suppose to optimize the services.

e) Many applicants are not orderly follow the Standard Operational Procedure (SOP)

f) Some important program to this institution becomes neglected due to the routine, i.e. regular socialization, training of communication and ethics in services, monitoring, and reporting. Socialization is not effective because it is rarely done. Therefore many people do not understand and not aware of the administrative SIUP and TDI.

2. Applicant of SIUP and TDI

a) Pleased with the presence of B2PT, because simpler administration in one office.

b) Officer of BP2T represents related institution within the requested licensing.

c) Some permits are not punctually released, because too many applicants who applied the same license (SIUP and TDI) are not proportional with the officer number. We also found some applicants that cut the queue line.

d) Applicant is not eagerly waiting and chose to hire broker.

e) Capacity of the parking lot is quite adequate, but no shade trees decreasing the comfort.

f) Cost transparency has not optimal.

BP2T Malang should pay a serious attention to the perception towards their officers according to the real conditions that occurred in the process of SIUP and TDI. Disorderly of applicant in fulfilling the requirement are assumed due to lack of information on licensing of SIUP and TDI. So the expectation that all weaknesses can be corrected and BP2T Malang could show a better performance.

Through the implementation of the policy of regional autonomy since January 2001, the Central Government has transferred the authority to the Regional and Urban government. These policies are expected to make the regional government becomes more responsive to local needs and dynamics. It expected that the implementation of the public service will be better qualified when implementing a better regional autonomy. De-bureaucracy and deregulation became an important agenda in ensuring the community welfare [16].

Provision of public services by the Government is servant of states and society, which act as the main development actors. Otherwise, government acts as the controller (steering) and the community as the executor (rowing). Public services are services which are non profit-oriented. Public service in this era of globalization must improve the quality of service and courtesy in serving the community for maintaining the image of the Office.

Based on the interviews and observations on the process of service in BP2T Malang, the procedures used are still referring to the regulation of SIUP and the TDI, but varies in practices. A wide variety of services of SIUP and TDI models indicate that the public service involves various components, e.g. promoting the community participation.

The process of service involving the serve and be served parties, which means that the community have reinforcing the management of BP2T. Community participation implied in completing the required documents orderly and administratively. Participation itself is one of the characteristics of good governance. Generally good governance is defined as a system service which consists of three pillars, i.e. state, civil society and private sector. Government through their official has a duty to serve the community by providing various forms of public service.

3.2. One Stop Services in BP2T Malang

Implementation of One Stop Service System is based on regional regulations No. 7 in 2008 on Organization and work procedure [1]. It needs the commitment of all levels of local and provincial government in improving the quality of the system. It also gives positive courage over the sustainability of the system.

In addition, the high awareness and community participation in supporting the management of the system can be one of the reasons of sustainable Integrated Services. The support of the community responded by the Malang Government through improving the infrastructure on the integrated service system.

Service of one stop service is a tremendous convenience for each element of society. Certain time and cost increase public trust for Government of Malang on the provision of service to the community. The success of this integrated service system raises benchmarking interest from other City Government.

3.3. Service Quality of BP2T Malang

According to informant (applicant), high quality services satisfy people's demands due to the requirement that should be met by public service organizations. Therefore, officer of BP2T must understand, interpret and perform good technical service that created harmonious relationships with the public/community in excellent service.

Integrated Service Unit of Surakarta also used some basic elements to measure the service quality. They use community satisfaction index on the: service procedure, officer’s ability, officer’s responsibility, officer’s manner and hospitality, comfort of environment, and security service [17].

Satisfactory on the services in BP2T is determined by the users of BP2T (applicant). Basic measurement of a good public service explained by Lovelock are: tangible – physical skills, equipment, personnel and communications; reliable – ability and reliability in providing the promised service; responsiveness – the responsibility of service quality; assurance – service guarantee from the knowledge, behavior and ability of officers in assuring public trust; empathy – individual attention on society.

3.3.1. Tangible

Service quality from the visible physical means includes parking, a lounge area, number of staff, media information of arrangement and complaint, and distance to the service center. This is referred to the Republic of Indonesia Law No. 25 of 2009 about public service [11], i.e. the availability of adequate facilities and infrastructure. It also states the presence of delivery media on complaints and problems that occurred in the process of management of permissions.

Dozens of hundreds applicant come to BP2T Malang for each day. From the findings, BP2T parking area is without roof, caused inconvenience for the public due to the hot temperature. BP2T Malang is still only managing 15 types of permissions, whereas actually there are other permissions that can be processed in the management of BP2T Malang, e.g. permits of companies list (TDP).

3.3.2. Reliable

Service quality was seen from the ability and reliability in providing the promised service. It is including speed of service resolution time and the time of complaint service. BP2T has demonstrated ability and reliability in providing services that can be trusted by the applicant. It was found that most of the necessary permit was released in accordance with the determined time. Although, several factors delays in releasing permits:

a. Study site require related agencies review (requires technical consideration).

b. Reviewed study site was problematic.

c. The delay in the technical documents of the applicant has not been fulfilled yet.

Mechanism of service complaints is also done through a written letter then placed on the complaints/suggestions box. Complaints are resolved through the appropriate complaint handling mechanism by placing the interests of the applicant/community on the main positions. All complaints are followed up quickly so that the applicant will satisfied and did not disappointment.

3.3.3. Responsiveness

Service quality is viewed from the ability to assist and provide services in short time and appropriate, as well as responsiveness to consumer demand. Officer of BP2T is very responsive to applicant in fulfilling their demand. Informant stated that the officers are friendly and responsive to their demand. Thus the interviewed applicant claimed to be quite satisfied with the officer. However, socialization of BP2T still needs to be intensified.

3.3.4. Assurance

Service guarantee reviewed from the knowledge, behavior and the ability of officers in convincing the applicants. The officers in BP2T are able to convince the applicant regarding the service mechanism. Previously, community has been accustomed to the lip service from officials in the associated service before BP2T formed. But convincing efforts shown by the officers of B2PT who serve the community in accordance with the mechanism in the service of ensure and raises customer satisfaction.

3.3.5. Empathy

Quality of given service is strict but caring. Courtesy and hospitality were given from the officer during the service, as well as specified assistance. The officers showed a firm stance and indiscriminately to the applicant. The applicant was satisfied over the job performance of officer of BP2T Malang.

3.3.6. Overall Performance

The performance of most staff in BP2T indicates that they have been able to serve well and can satisfy the community. Although in terms of educational qualifications, not all officers are undergraduate but their previous experiences in the permit management on the technical institutions. This experience is the provision that they use in performing work in BP2T. They show polite, responsive, credible, easement, fluent communication and understanding for the demands of society, which is considering their performance as a good category, similar to the satisfaction index of one stop services in Surakarta [17].

Fast, easy, transparent services have been implemented by the official in BP2T. Applicant gets faster process to submit the documents, permission to surveys if required, response to the complaints and finally obtain the released permit. BP2T collaborate and synergize with the related agencies, e.g. Department of Trade and Industry. This collaboration delivers high trust from public.

Government of Malang in serving the community is referred to the principle of Citizen Driven Government. The principle is citizens-oriented public service. Quality of service shown by BP2T increasing the citizen’s interest to proceed the licensing and attract investors to Malang.

4. Conclusions

Implementation of integrated licensing service policy has contributed positively for the society which administers licensing in BP2T Malang. Coordination and synchronization were need in licensing services between the officers, applicant and related institution, such as Department of Trade and Industry. The performance of most officials of BP2T was already tangible, reliable, responsive, assurance and empathy in serving the applicant, thus can satisfy the applicant.

Supporting factors in implementation of SIUP and TDI services in Malang are authority delegation, experienced officer, relatively adequate educational competence, building infrastructure and administrative preparedness. Restricting factors are the lack of means, facilities and personnel, the attitude and behaviour of the apparatus that less versatility as well as small budget for socialization.

5. Recommendations

The procurement of adequate means, facilities and personnel immediately attempted to maintain the quality of service. It would have optimize the services and avoid the development of brokers. BP2T should also intensify the dissemination about SIUP and TDI to the community. The socialization should be held in easily accessible venue and the execution time adjusted to the activities of the local people. Socialization should also hold across regions and community in Malang.

Appendix 1. Example of an Image with Acceptable Resolution