Indonesian lawmakers ratify govt regulation on jobs

Nazarudin Latif
Indonesian lawmakers ratify govt regulation on jobs Protesters pull police razor-wire barricades during a protest in Jakarta against a new Job Creation Law approved by Indonesia’s parliament, Oct. 13, 2020. Thousands of people marched in the Indonesian capital demanding that the government revoke the law that they said would cripple labor rights.
Tatan Syuflana/AP Photo

Indonesia’s parliament on Tuesday ratified a government regulation that replaces a controversial law on job creation, but critics remain unhappy, saying it will still benefit businesses at the expense of workers and the environment.

President Joko “Jokowi” Widodo signed the government regulation late last year as an emergency measure to implement a November 2021 ruling by the Constitutional Court that declared the original Job Creation Law unconstitutional on the grounds there was no adequate public consultation during its deliberations.

The court gave parliament and the Jokowi administration a two-year deadline to revise or replace the law with a new one.

The government said the new regulation contains improvements, including better provisions on minimum wages for outsourced workers.

“We ask all members, can the bill on ratifying Government Regulation in Lieu of Law No. 2 of 2022 on job creation be approved as a law?” House of Representatives Speaker Puan Maharani asked on the parliamentary floor Tuesday, followed by affirmative answers from most participants before lawmakers passed the new jobs and investment law.

Airlangga Hartarto, Indonesia’s coordinating minister for economic affairs delivers his remarks on the new job and investment law, during a parliamentary plenary meeting in Jakarta, March 21, 2023. [Ajeng Dinar Ulfiana/Reuters]

The government said the regulation, which is the basis for the new, aimed to simplify business licensing procedures, attract foreign investment and create more jobs in Southeast Asia’s largest economy, which has been hit hard by ripple effects from the COVID-19 pandemic.

But critics said it did not address the court’s concerns and still undermined labor standards and environmental safeguards.

They also accused the government of bypassing public consultation and parliamentary scrutiny by issuing the regulation without proper deliberation.

The original Job Creation Law was enacted in October 2020 amid widespread protests by labor unions, students, environmentalists and civil society groups, who feared it would erode workers’ rights, weaken environmental protections and benefit big businesses over small enterprises.

During Tuesday’s session, representatives from the opposition Democratic Party and the Prosperous Justice Party voiced their objections to ratifying the regulation as a law.

Members of the Prosperous Justice Party decided to walk out from the vote.

The legislation is “formally and constitutionally flawed,” said  Santoso, an MP with the Democratic Party.

“The Democratic Party faction declares its rejection of the job creation law,” he said.

Prosperous Justice Party lawmaker Amin Akram argued that there was no justification for the government to issue the ordinance.

“Indonesia’s economy grew by 5.72 percent in the third quarter, with a growth trend above 5 percent. Indonesia is even seen as a relatively safe country from the threat of recession,” Amin said.

A pro-business group, the Indonesian Employers Association, however welcomed the new legislation’s passage.

Anton Supit, an official from the association, said this would bring legal certainty, though he noted that businesses still disagreed with some parts of the law such as the minimum wage formula, the Reuters news agency reported.

“We support this law because it will increase employment, and strengthen the national economy,” Anton told Reuters.


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