The executive director of Regional Autonomy Watch (KPPOD), Robert Endi Jaweng, in Cikini, Central Jakarta, on Thursday. (JG Photo/Tara Marchelin)

Local Government Interests Should Be Accommodated in Job Creation Omnibus Bill


FEBRUARY 21, 2020

Jakarta. According to Jakarta-based Regional Autonomy Watch, or KPPOD, the omnibus bill on job creation should be revised to take in more local government interests, especially the current articles on the simplification of business licensing and ease of doing business.

Herman Suharman, the KPPOD's policy analyst, said in Jakarta on Thursday that the bill removes the requirement for location permits and replaces it with a Detailed Spatial Plan (RDTR) digital map. But currently, the RDTR is only available in 53 regions in Indonesia.

Article 16 of the omnibus bill on job creation stated that if the local government doesn't provide the RDTR, companies will have to file an e-application on spatial use to the central government.

"This regulation is very centralistic. It won't be very efficient since there's a huge gap in knowledge of local conditions between the regional government and central government," Herman said.


Herman also regrets that the risk level of business licensing – included in articles 9 and 10 of the bill – is set by the central government. "Local government involvement is very minimal, when they're the one who has the competency to determine the risk level," he said.

Herman also pointed out the bill doesn't contain any regulation on Business Domicile Certificate (SKDU) – a permit stating the domicile of a company and one of the requirements to establish a business. This permit is issued by the urban or village community office (kelurahan) or the subdistrict office (kecamatan). 

Herman said the SKDU should be revoked because its issuance depends entirely on local government discretion and doesn't have a legal basis in national regulation. 

"The central government should be the one that guarantees a company is safe for the environment, not the village office," he said.

The KPPOD also highlights article 23 section 4 of the bill that states the central government has the authority to assign certified institutions and experts to produce an environmental impact assessment (AMDAL) and sections 9, 10 and 11 on the abolishment of the AMDAL commission.

"This regulation is problematic. There aren't many qualified institutions and experts [to produce AMDAL]," Adib, a policy analyst at the KPPOD, said.

Despite the shortcomings, the omnibus bill should help the government to resolve disharmony between regulations that has been a big problem in Indonesia, KPPOD executive director Robert Endi Jaweng said.

"Indonesia has too many regulations. An omnibus law integrates all those regulations and allows the government to use it as an all-encompassing reference. It will reduce the number and type of regulations that we have," he said in a discussion about the omnibus bill on job creation in Cikini, Central Jakarta.


Robert said the House of Representatives should do more to accommodate the voice of the people in discussing the bill. This could be done by making a roadmap to identify which communities will be affected once the bill becomes law.

"We hope the House of Representatives throws everything out in the open because legislation is a political process that should involve everyone," he said.

Robert suggested the omnibus bill on job creation should also be discussed in a special committee comprising various party factions and commissions.

The bill should also include an adjustment of the government's authority – currently based on decentralization and regional authority principles in a Local Government Law passed in 2014.