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Govt admits investment delay due to Job Creation Law uncertainty
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United States Trade Representative Katherina Tai (left) holds a meeting with Coordinating Economic Affairs Minister Airlangga Hartarto in Washington, DC, on Oct. 26, 2022. (The Jakarta Post/Office of Coordinating Minister for Economic Affairs)
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everal investment projects have reportedly been put on hold following setbacks in the implementing regulations of the controversial Job Creation Law, which has led to uncertainty among investors wanting to do business in Indonesia.
Coordinating Economic Minister Airlangga Hartarto said on Thursday the government was barred from making revisions and issuing regulations to implement the Job Creation Law following a 2021 Constitutional Court (MK) ruling that rendered the law conditionally unconstitutional.
The ruling stated that unless amendments were made within the next two years, the law would be deemed unconstitutional, but in December the government responded to the ruling by issuing an emergency regulation to replace the controversial law in the form of a government regulation in lieu of law (Perppu).
“After the issuance of the Perppu, we should solve the implementing regulation [problems],” Airlangga said on Thursday.
Read also: Indonesia issues emergency regulation to replace controversial job creation law
By issuing the emergency regulation, the government has technically replaced the Job Creation Law and rendered the prevailing rules ineffective, which then allows the creation of new regulations to replace the implementing regulations tied to the previous law, Airlangga said.
The emergency regulation became effective immediately after its issuance, but it must receive endorsement from the House of Representatives before the end of next sitting session to become a permanent law, Reuters wrote.
