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Jokowi asks for omnibus bylaws
President Joko “Jokowi” Widodo has urged regional administrations across the country to join the central government’s deregulation push by drafting omnibus bylaws to cut through sprawling regional regulations that have deterred investors
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span>President Joko “Jokowi” Widodo has urged regional administrations across the country to join the central government’s deregulation push by drafting omnibus bylaws to cut through sprawling regional regulations that have deterred investors.
The government has been drafting at least three omnibus bills, namely on job creation, taxation and small and medium enterprises (SMEs), as part of its structural reform agenda to draw more investment into the country.
“The regional administrations can also revise bylaws that drag down governors, regents and mayors,” Jokowi told his Cabinet and regional leaders. He said omnibus bylaws would provide the legal umbrella to do so. The remarks were made during the National Development Planning Conference 2020-2024 at the State Palace on Monday.
“Cut [the regulations] so that you, ladies and gentlemen, can work faster, more nimbly and more flexibly amid changing national and global situations.”
Such a move was necessary, Jokowi said, so that executives at both the central and regional levels would not be held back by the country’s sprawling regulations, which could comprise up to 42,000 rules.
Jokowi’s administration is making a priority of courting investment to perk up economic growth, which has slowed to its lowest level in more than two years: 5.02 percent in the third quarter of this year.
The World Bank has said the excess of government regulations is a major barrier to attracting investment. Under Jokowi’s administration, the issuance of regulations, particularly ministerial regulations, has increased compared with the previous administration.
Between 2015 and 2018, more than 6,300 ministerial regulations were issued, accounting for 86 percent of central government regulations, according to data compiled by the World Bank. The figure was up from 5,000 ministerial regulations that accounted for 82 percent of central government regulations issued between 2011 and 2014.
The omnibus bill on job creation, the draft of which is expected to be submitted to the House of Representatives in January, will amend or annul 1,194 articles in 82 existing laws. An omnibus law on taxation, which will, among other measures, cut corporate income tax rates, will be submitted to the House within the week, according to the President.
Jokowi addressed House Speaker Puan Maharani, who attended the conference, to express his hope that deliberation on the omnibus bills would proceed smoothly at the legislature.
“Bu Puan, this [will amend] 82 laws. Please get it done soon,” said Jokowi. “I whispered [to Puan] ‘Bu, if possible, it should take no longer than three months.’”
Investment growth, which accounts for about a third of the country’s gross domestic product, fell to 4.21 percent from 6.96 percent in the same period last year, Statistics Indonesia data shows.
Regional leaders said they had taken the initiative to look at their own regulatory regimes and identify overlapping bylaws but added that they were waiting for House deliberation on the omnibus bills to conclude before proposing measures of their own.
Central Java Governor Ganjar Pranowo said the move was necessary to avoid creating a regulatory regime that was out of sync with laws at the national level.
“We are currently identifying overlapping laws from all sectors at the regional level, but we must know the direction that is being taken by the national omnibus laws so that we will be in sync,” said Ganjar.
He added that the omnibus law approach could be taken to formulate bylaws on an ad hoc basis to provide legal certainty about investment incentives.
East Java Governor Khofifah Indar Parawansa echoed Ganjar’s statement, saying that she had coordinated with East Java Legislative Council (DPRD) chairman Kusnadi on the deliberation of the omnibus bylaws to amend several regulations at the regional administration level.
“We have already identified bylaws to be amended and we have confirmed with the DPRD East Java that they will follow the central government process,” said Khofifah.
Regional Autonomy Watch (KPPOD) executive director Robert Endi Jaweng said the regional administrations would be able to use the same omnibus law approach as the central government to amend overlapping bylaws.
However, he called on the central government to include the regional administrations in the deliberation of the omnibus laws, arguing that cooperation was necessary to create robust legislation.
“The omnibus bill should be a mix between two processes: top-down from the central government with a legalistic approach and a bottom-up from regional administrations, who often carry out the actual [legislative] package,” said the KPPOD analyst.
The implementation of the Online Single Submission system, legalized through Government Regulation No. 24/2018, resulted in a lack of participation from the regional administrations, Robert said. Therefore, the central government should ensure that similar cases do not occur with the proposed omnibus laws, he added.
