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Analysis: Perppu creates problems, not jobs
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Workers and women activists staged a protest against the Omnibus Law in front of the Parliament Building, Central Jakarta in March 2020. (JP/Dhoni Setiawan)
P
resident Joko “Jokowi” Widodo presented a new year gift in the form of a government regulation in lieu of law (Perppu) on job creation. Signed on Dec. 30, 2022, Perppu No. 2/2022 replaced the Job Creation Law that in late 2021 was declared conditionally unconstitutional by the Constitutional Court (MK) and therefore had to be revised within two years in a process that must include meaningful public participation.
The Perppu is 1,117 pages long and consists of 186 articles with changes to several articles such as rules of employment, minimum wages and arrangements for outsourced workers. For example, the regulation eliminates the right to two days off in a week for workers as stipulated in Article 79 Paragraph (2b). According to the regulation, workers deserve one day off the weekly break for six working days. Law No. 13/2009 on Employment regulates two days off a week for workers. Additionally, the jobs law says outsourcing can be open to all business sectors, but the regulation changes that to some sectors.
According to the Manpower Ministry, the Perppu was issued because the state needs to ensure the citizens' rights to work and a decent living through the Job Creation Law. The government also sees the need for broad employment absorption as well as adjustments to various regulatory aspects relating to the facilitation, protection and empowerment of cooperatives and micro, small and medium enterprises (MSMEs). In addition, the regulation was said to implement the MK’s order for the revision of the Job Creation Law.
Coordinating Economic Minister Airlangga Hartarto insisted that the state of emergency behind the issuance of the Perppu was justified by the imminent global recession to the point of stagflation the country is facing. According to Airlangga, the crisis is a real threat for emerging markets like Indonesia, while a few developed countries have already come under the International Monetary Fund’s supervision. Therefore, the government needs to respond quickly to anticipate the storm. Airlangga also revealed the regulation was issued to provide legal certainty to investors and business players who had been waiting for the development of the Job Creation Law since the MK declared it conditionally unconstitutional.
The Perppu has unsurprisingly sparked public criticism. Civil society groups said the regulation deprived the public of meaningful participation per the court’s order in the making of the Job Creation Law. The intention of issuing such an “emergency regulation” is also questioned by the Commission for Missing Persons and Victims of Violence (KontraS). The group deems the regulation as a form of government act arbitrary, which contradicts the rule of law as it nullifies the MK’s ruling. KontraS therefore urges revocation of the Job Creation Law as well as the Perppu.
A similar sentiment was shared by House of Representatives Commission IX Deputy Speaker Kurniasih Mufidayati of the Prosperous Justice Party (PKS). She said President Jokowi had bragged about Indonesia’s economy among the Group of 20 countries, which indicated that all was well in the country despite the looming threat of a global recession.
The Association of Indonesian Trade Unions (Aspek) suspects the Perppu would cost workers their job security and wage guarantee for the sake of investors. However, the Labor Party opts to play it safe. The party’s chairman Said Iqbal said they would not directly confront the government related to the Perppu because they believed that President Jokowi would listen to the workers’ aspirations and not force his will against workers. Instead, the party suspected Airlangga was behind the issuance of the regulation just to please Jokowi.
What’s more
Responding to the controversy, House Deputy Speaker Sufmi Dasco Ahmad said the House would only review the Perppu after the lawmakers resume their sitting on Jan. 10. Therefore, Sufmi said he would not comment about the regulation right now. Even so, Sufmi deems the issuance of the regulation did not break any laws, including Law No. 15/2019 on the Formation of Legislation. House Commission IX member Irma Suryani from the NasDem Party concurs, although she cannot be sure if the House will approve or reject the regulation.
The 1945 Constitution stipulates that the House must respond to a Perppu within 30 days after it reaches the legislative body, or else the regulation will become effective.
In addition, Labor Party chairman Said Iqbal says if negotiation with President Jokowi over the matter proves to be unsuccessful, the party will file a judicial review against the Perppu with the MK. This move has gained support from law experts who agree that the regulation nullifies the MK’s orders.
The House Legislation Body (Baleg) member Guspardi Gaus said the regulation was issued as a legitimate alternative of the government to act on the MK’s order to revise the Job Creation Law without wasting time on a much longer, complicated procedure and risking the effect of an imminent global recession. Guspardi added that the legal void caused by the ruling meant there was an urgency to issue the Perppu.
What we’ve heard
According to an internal source in the government, although President Joko “Jokowi” Widodo issued the draft of the Perppu on job creation on Dec. 30, 2022, discussions regarding the draft had been conducted since the month of October.
Another source from labor groups said Jokowi invited them to discuss the plan to issue the regulation on job creation. In this meeting, the labor groups had submitted a list of issues that needed to be revised to improve the Job Creation Law. Additionally, the option of issuing the regulation as a Perppu rather than a law was also tabled.
"Ahead of the political yeaar, the law’s revision could certainly be neglected and suggestions from labor groups could also be ignored,” said this source.
Apart from labor groups, the Job Creation Law familiarization task force is also said to have played a role in the formulation of the regulation. On Nov. 13, 2022, they held a meeting and invited legal experts to the Four Points by Sheraton Hotel in Bali, during which the government decided to amend the Job Creation Law. However, the meeting did not make an explicit recommendation to make a Perppu.
The source added that the legal experts had gathered in Bali on numerous occasions and had previously put forward three options regarding the Job Creation Law: Revise the articles being questioned by the Constitutional Court, overhaul the entire law, or issue a Perppu – which recently came to light.
A lecturer in constitutional law at a private university in West Jakarta was one of the drafters of the Perppu and was said to be active in the task force’s meetings. According to the source, it was this lecturer who allegedly submitted a proposal for the government to issue a Perppu as a step in responding to the Constitutional Court's decision.
Disclaimer
This content is provided by Tenggara Strategics in collaboration with The Jakarta Post to serve the latest comprehensive and reliable analysis on Indonesia’s political and business landscape. Access our latest edition to read the articles listed below:
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