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Jakarta Post

Key bills in pipeline to jump-start economy

  • Linda Yulisman and Raras Cahyafitri

    The Jakarta Post

Jakarta   /   Tue, February 10, 2015   /  07:49 am
Key bills in pipeline to jump-start economy

In its plenary session on Monday, the House of Representatives agreed 37 bills set for deliberation this year, with more than half related to reform in the economy and less focus on bolstering the security and defense presence in society, as many had previously feared.

An amendment to a law on dispute settlements in industrial relationships, which regulates disputes between workers, labor unions and employers, as well as amendments to the tax system and oil and gas management, are among the bills much-awaited by businesses.

Indonesian Employers'€™ Association (Apindo) chairman Hariyadi Sukamdani expected the amendment to the Industrial Relationships Law would favor labor-intensive companies, given the current regulations that overly emphasized protection for laborers rather than for employers.

'€œThe interests of businesspeople have always been sidelined in all labor regulations. Such inequality has created high costs for businesses.'€

Hariyadi explained that in the past couple of years, companies were reluctant to hire more workers because if they engaged in a dispute with workers, who were usually supported by labor unions, the settlement would be costly and unfair for businesses under the current law.

The complexity of recruiting and nurturing the labor force has discouraged corporations from employing more workers, making them choose to implement high-tech machinery that reduces labor needs.

Manufacturing only employed 15.39 million people, or 13 percent of the 125.3 million national workforce as of February 2014.

The House and the government are also rushing to complete an amendment to the Oil and Gas Law to ensure legal certainty and attract more investment to the sector.

'€œWe expect to submit the draft earlier in February rather than in May,'€ said Naryanto Wagimin, the upstream oil and gas director with the Energy and Mineral Resources Ministry'€™s directorate general of oil and gas.

Naryanto said that early submission was necessary as many contracts would need approval from a definitive agency after the Constitutional Court scrapped Upstream Oil and Gas Executive Agency (BPMigas) in late 2012.

Major oil and gas producers have also called on the government to introduce a more flexible regulatory framework in the amended law in order to prevent an energy crisis that can occur in the next five years if no serious efforts are made to prop up the declining oil production.

In order to attract more investments, the government will also revise a law on the general taxation system with a planned introduction of a tax amnesty that will bring home billions of dollars hidden by Indonesian companies and individuals overseas.

With more bills focusing on the economy, the government will avoid passing bills that are deemed controversial, including a bill on the protection of religious minorities, over concern of a backlash from Muslim communities.

Also dropped from the list are the national security and state secrecy bills, which have been opposed by rights groups as potential threats to democracy. '€œWe want to avoid any controversies in this first year so we will not focus on such contentious bills. It'€™s the President'€™s instruction. They remain as our long-term targets although they are not our priority this year,'€ Law and Human Rights Minister Yasonna H. Laoly said last week.

In regards to the revision to the Mining, Mineral and Coal Law, the government has ensured that there will not be controversy, such as with an easing of the export ban of raw mineral ores put in place last year.

'€œThere will be no compromise to the export ban policy. The revision will only cover the transfer of authority to issue mining permits from local administrations to the central government,'€ said R. Sukhyar, the director general for mineral and coal at the Energy and Mineral Resources Ministry.

Legislators have deemed the amount of the current deliberation realistic compared to the previous House that was able to pass less than 20 of the around 100 bills proposed annually. The current House has aimed to pass 159 bills before its term expires in October 2019.