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Jakarta Post

Govt expects deliberations on job creation omnibus bill to finish in August

  • Dzulfiqar Fathur Rahman

    The Jakarta Post

Jakarta   /   Wed, July 15, 2020   /   12:22 pm
Govt expects deliberations on job creation omnibus bill to finish in August Coordinating Economic Affairs Minister Airlangga Hartarto gestures during an interview in Jakarta on Feb. 24. (JP/Wendra Ajistyatama)

The government expects the House of Representatives to finish deliberating the omnibus bill on job creation by late August or early September, Coordinating Economic Minister Airlangga Hartarto said on Tuesday.

He added that lawmakers had finished deliberating “half of the chapters” in the bill.

Read also: Key points of labor reform in omnibus bill on job creation: What we know so far

The omnibus bill contains 15 chapters and 174 articles laid out in over 1,000 pages. It seeks to revise 79 prevailing laws and more than 1,200 articles considered to be hampering Indonesia’s efforts to attract investment.

“The government is seeking to conduct structural reform through the omnibus bill on job creation,” Airlangga, who also serves as Golkar Party chairman, said in a virtual presser held by the European Business Chamber of Commerce (EuroCham) in Indonesia.

President Joko “Jokowi” Widodo is pushing the omnibus bill’s deliberation with the aim of cutting red tape and spur investment into the country after failing to attract companies moving out of China in 2019 amid slowing investment growth.

Read also: Labor unions demand role in jobs bill deliberation

Indonesia failed to climb up the World Bank’s ease of doing business ranking last year and has been stuck at 73rd place since 2018. The president wants the country to claim the 40th spot this year.

With the COVID-19 pandemic hitting countries around the world, Indonesia saw an annual decline of 9.2 percent in foreign direct investment to Rp 98 trillion (US$6.7 billion) in the first quarter.

“[The omnibus bill] will be a big push for Indonesia’s economy and help it transform as the fundamental problems we face is having hyper regulations,” said Rizal Affandi Lukman, deputy for international economic cooperation at the Office of the Coordinating Economic Minister.

The omnibus bill proposes, among other things, 80 articles to revise prevailing regulations related to investments and business permits. As many as 11 articles are expected to improve the country’s ease of doing business.

Read also: Guide to omnibus bill on job creation: 1,028 pages in 10 minutes

The bill also contains 19 articles to revise regulations on land acquisition, which has become one of the biggest obstacles for investment realization in Indonesia. Some investment projects saw their realization process stall for up to six years due to land issues, according to the Investment Coordinating Board (BKPM).

The omnibus bill also includes five articles related to employment regulations. However, the government decided to delay deliberations on these articles in response to mounting pressure from labor unions over fears that the articles would lure investment at the expense of workers’ welfare.