On October 5, 2020, the House of Representatives (DPR) endorsed the proposed legislation, which comprises 79 laws and spans 905 pages.
Six political parties — PDIP, Golkar, PKB, NasDem, PPP, and Gerindra — firmly endorsed the omnibus bill; the National Mandate Party (PAN) endorsed it, but with some notes; while, the Prosperous Justice Party (PKS) and the Democratic Party (PD) opposed the bill.
The bill was proposed by Widodo after he was re-elected as Indonesia's President for the 2019-2024 term. At his swearing-in ceremony on October 20, 2019, Jokowi had asked the Parliament to complete deliberations on the omnibus law within 100 days.
The government completed the draft omnibus bill on February 12, 2020, and the Parliament began discussing it on April 2, 2020.
The government has claimed that all stakeholders in the country were involved in the drafting of the bill, including the Manpower Ministry, experts, businessmen, and labor union representatives. And, it was widely publicized among the public, both the government and the DPR have claimed.
However, following its Parliamentary approval, the law has been rejected by many labor unions, activists, and university lecturers, who have said it would harm workers’ interests and endanger the environment.
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Their opposition centers on certain fundamental issues covered by the law, which, they feel, would be disadvantageous to workers. The issues pertain to reducing severance pay, implementing a contract and outsourcing system, setting minimum wages, and the potential loss of health insurance and pensions for workers owing to the implementation of contract-based employment and outsourcing, among other things.
“Our concerns are that the omnibus bill will hurt labor. Because some of the regulations will allow foreign unskilled workers (to be employed), it will be a massive use of outsourcing, flexible working hours, and a change in payroll scheme from monthly to hourly,” chairman of the Indonesian Trade Union Confederation (KSPI), Said Iqbal, noted in a statement.
Starting October 6, 2020, labor unions had called for a nationwide strike and rallies in several Indonesian cities. University students, vocational students, activists, and other elements also joined the rallies.
On October 8, 2020, the third consecutive day of protests, the rallies took a violent turn, leading to several protesters and policemen getting injured, and 18 bus stops and one MRT station suffering damage downtown of Jakarta.
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Protesters also went to the Presidential Palace area in Jakarta, but Widodo was not there. He was paying a working visit to Central Kalimantan to review a food estate development program the same day as the major rally
The next day, October 9, 2020, the President issued a statement blaming disinformation and social media hoaxes for the widespread opposition to the Job Creation Law.
He also debunked several reports, including those stating that the Provincial Minimum Wage, District Minimum Wage, and Provincial Sectoral Minimum Wage had been scrapped under the new law. Wage provisions will still be regulated under the Job Creation Law, he clarified.
He firmly refuted reports saying the minimum wage would be calculated by the hour. Under the omnibus law, wages will be regulated based on the time and results obtained by workers, he clarified.
He also explained that the Job Creation Law will regulate all leave, including sick leave, marriage leave, circumcision leave, baptism leave, death leave, and maternity leave.
In addition, the President said, companies would not be able to carry out a unilateral termination of employment (PHK), as they will have to follow the provisions of the new law. The same will apply to social security of workers, which has been accommodated in the Act.
The new law is also aimed at simplifying overlapping regulations and lengthy procedures, he pointed out. For instance, micro and small businesses will now no longer need business permits, but will only have to register with the relevant agency, he said.
The law will facilitate the establishment of limited liability companies because there will be no restrictions on minimum capital. Under the new law, nine people can set up a cooperative unit, he added.
Besides, the omnibus law is important as it would support corruption eradication efforts in the country, he remarked.
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With regards to the new law, what has also often been reported incorrectly is that it has done away with environmental impact assessment (Amdal), he said.
That is not true as the Amdal still remains for large industries, who will be subject to a rigorous Amdal study, he pointed out.
However, for micro, small, and medium enterprises, there will be greater emphasis on assistance and supervision under the new law, he explained.
“Amdal has not been removed, and remains there, but the process (of obtaining Amdal permits) has been made simpler to make time and costs more efficient,” secretary at the Coordinating Ministry for Economic Affairs, Susiwijono Moegiarso, said in a press statement on October 9, 2020.
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President Widodo has also assured that the Job Creation Law would create jobs for 2.9 million youngsters joining Indonesia’s working age population annually. It would also generate employment for those who lost their jobs during the COVID-19 pandemic, he said noting, the health crisis has left 6.9 million people unemployed and 3.5 million workers affected.
He also said there are at least 11 clusters in the law that aim to expedite economic transformation.
The law regulates several matters, including simplifying licensing; labor investment; land acquisition; ease of doing research and administrative innovation; convenience and protection of micro, small, and medium enterprises (MSMEs); government investment and projects; and economic area affairs, he said.
Responding to criticism against the law, the President has asked those who are dissatisfied with the law to file a request for its judicial review with the Constitutional Court (MK).
In the meantime, Minister of Manpower, Ida Fauziyah, has said that the process of drafting the omnibus bill involved public participation via engagement with trade unions, employers, and academics.
When President Jokowi decided to postpone the discussion on the labor cluster in the job creation omnibus bill on April 24, 2020, the Ministry of Manpower took advantage of the momentum to invite representatives of trade / labor unions and the Indonesian Employers Association (Apindo), who are members of the National Tripartite forum, to deepen the formulation of the bill, according to the minister.
In the meantime, Coordinating Minister for Economic Affairs, Airlangga Hartarto, has stated that the Job Creation Law will help Indonesia, an upper middle-income country, to break out of the middle-income trap.
Hartarto explained that the aim of the Omnibus Law on Job Creation is to simplify, synchronize, and trim regulations that hinder the creation of jobs.
Hence, the law is in the interest of the people as it would provide legal certainty for job creation and employment, he remarked.
Going forward, the government will issue government regulations (PP) and presidential regulations (Perpres) pertaining to the job creation law, which would come into force no later than three months after the enactment of the law.
The government has invited suggestions on the derivative or technical regulations from all levels of society.
As the law has triggered major rallies that have led to the arrest of more than five thousand protestors, and left civilians and police officers injured and several public facilities damaged, ministers, legislators, and experts have spoken up to convince the public that the law is good for the nation, particularly workers, and that most of the information about the law that has gone viral on social media is incorrect.
The questions are: whether those opposing law would be convinced with their explanations, and how many people have read and studied the 905-page law.
Perhaps, representatives from the government and those opposing the law need to once again sit on the table and discuss the law thoroughly to straighten out any misinformation or disinformation pointed out by the government and any grave miscommunication between the two sides. (INE)
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