The Coordinating Minister for Economic Affairs Airlangga Hartarto, right, greets lawmakers during a plenary season at the House of Representatives in Jakarta on Monday. (SP Photo/Ruht Semiono)

The House Passes Omnibus Law Much to Businesses' Delight, Workers' Ire


OCTOBER 06, 2020

Jakarta. The House of Representatives has passed the Job Creation Bill into law on Monday, three days ahead of schedule, pleasing the countries business community, which has been put their hope on the law to eliminate many regulatory bottlenecks that hinder investment in Indonesia. 

"The law can answer and resolve various problems that hinder investment in increasing and creating jobs by simplifying the bureaucracy and licensing systems," Rosan P. Roeslani, the chairman of the Indonesian Chamber of Commerce and Industry (Kadin), said in a statement. 


More importantly, Rosan said the law would help ensure around two million job seekers entering the workforce in Indonesia every year would find many job openings available for them.  

"The law provides many conveniences for businesses, especially MSMEs and [created] a conducive investment ecosystem for greater employment opportunities to answer the needs of a growing workforce," he said.

The 2020 Law on Job Creation would also hold the key for Indonesia's economic transformation and recovery post the Covid-19 pandemic, Rosan said. 

He said the law could boost the investment growth to 6.6-7 percent annually, which would accelerate household consumption growth in the range of 5.4-5.6 percent.

In comparison, the investment contracted by 2.7 percent in the second quarter this year from the same quarter a year ago, while household consumption, which accounts for half of the country economy, shrunk by 2.3 percent. 

The House passed the law in a plenary season on Monday with only the Prosperous Justice Party, and Susilo Bambang Yudhoyono's Democratic Party voted against the bill.

Labor Strikes

The House held the meeting amid threats from Indonesian workers unions to stage a national strike from Tuesday until Thursday, the original schedule for the plenary meeting. The worker's unions argued that the law would remove many of the benefits and protections they enjoyed currently. 

Manpower Minister Ida Fauziyah pleaded the workers to cancel the plan, saying that the law has taken into account many of the workers' demands.  

"Please reconsider the strike plan," Ida said on Tuesday. 

"There are many [labor] friends' aspirations that we accommodate. Issues on temporary workers, outsourcing, dismissal, minimum wage still refer to the old law," Ida said.

"It's impossible to accommodate your demand 100 percent. But, please look at the result. Our alignments [to your cause] is clear," she said. 

Still, thousands of workers in Tangerang and Purwakarta in West Java,  Surabaya, and Pasuruan in East Java, and Batam in the Riau Islands carried out the strike plan on Tuesday. 

"We can inform you that [labor] friends in Tangerang, Purwakarta, Surabaya, Batam, and Pasuruan are on strike today to reject the omnibus law. So far, there have been no reports of any blockade by the police," Kahar S. Cahyono, the head of communication and media department at the Indonesian Worker Unions Confederation (KSPI), said on Tuesday.