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Businesses fret labor law revamp spells investment uncertainty
The employers' association has urged immediate action from the government and the House to overhaul the 2003 Manpower Law as ordered by the Constitutional Court, warning of the adverse impacts on the investment climate amid ongoing vulnerability in labor-intensive sectors.
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Employees produce garments at a Central Java factory in this undated handout photo. (Central Java Regional Government/-)
T
he Indonesian Employers Association (Apindo) has warned that a recent court order to overhaul the 2003 Manpower Law will create regulatory uncertainty, while prolonging the process could deter investments, especially in labor-intensive industries.
Unless the government and the House of Representatives can settle the matter swiftly, Apindo said, the ensuing regulatory limbo could hurt investor confidence and undercut President Prabowo Subianto’s goals of attracting substantial foreign investment and driving 8 percent economic growth.
“We need this settled immediately,” Apindo labor affairs chair Bob Azam told reporters on Nov. 7.
“There should be no more surprises from the government. Regulations should be predictable.”
Bob noted that the forthcoming revision to the labor law would be the fourth in the past decade, adding that investors across industry sectors had approached the association about the implications of the court ruling, especially for wage systems and other manpower issues.
“This is becoming emblematic of Indonesia’s inconsistency in drafting regulations,” he said. “For businesses, it raises a red flag.”
Read also: Court orders lawmakers to draft new manpower law
