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[ANALYSIS] Impact of Job Creation Law on retail sector

The jobs law will have a broad impact on the economic sector, including retail, which will be affected by several articles.

Nadia Kusuma Dewi (The Jakarta Post)
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Jakarta
Tue, November 24, 2020

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[ANALYSIS] Impact of Job Creation Law on retail sector Dozens of employees of a supermarket in Pamulang, South Tangerang, Banten, exercise before opening the store. The employees exercise routinely to stay healthy amid the COVID-19 pandemic. (JP/Dhoni Setiawan)

T

he government enacted Law No.11/2020 on job creation, better known as the omnibus law, on Nov. 2. The omnibus law is a policy breakthrough that can strengthen the national economy by improving Indonesia's investment ecosystem and competitiveness. 

However, there are still many pros and cons related to several key points in this law, such as labor-related articles. This is reasonable considering that the technical regulations for implementation are currently still in progress.

As stipulated in the final part of the jobs law, regulations on its implementation must be issued no later than three months since the law was enacted.

The jobs law will have a broad impact on the economic sector, including retail, which will be affected by several articles.

First, Article 15 on approval of suitability for space utilization for business activities by the central government. It is stipulated that in case a local administration has not established and provided a detailed spatial plan (RDTR), businesses can submit an application for approval to the central government — not at the regional level. 

The application is submitted through the electronic business licensing system, in accordance with the provisions of laws and regulations. Furthermore, the central government will issue an approval of suitability for space utilization activities in accordance with the RDTR. 

Second, Article 46 (3) on the authority of the central government to regulate public markets, shopping centers, supermarkets and grocery stores. This article stipulates that the central government shall regulate development, arrangement and fostering that are equal and fair to public markets, shopping centers, supermarkets and grocery stores to create business certainty and a balanced cooperative relationship between suppliers and retailers while still paying attention to supporting cooperatives and micro, small and medium enterprises (MSMEs). 

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