World Bank Indonesia and Timor Leste country director Satu Kahkonen said the bill was very much needed so Indonesia could attract foreign investors. However, she expressed concerns about the environmental and labor aspects of the bill.

“It’s going to move Indonesia’s environmental legislation further away from the implementation of best practices,” Kahkonen said during a virtual launch of the Indonesia Economic Prospect report on Thursday.

She said the bill “is basically not helping Indonesia,” as it proposed loosening environmental protection requirements, which could negatively affect the livelihoods of those that depended on the country’s natural assets.

The omnibus bill seeks to revise 79 prevailing laws and more than 1,200 articles, from labor and mining regulations to business license and environmental laws, to cut red tape and attract investment to the country.

However, observers have criticized the stronger role of the central government in the bill while environmentalists have warned that less stringent environmental impact analyses and building permit requirements will result in unsustainable growth. Labor unions also oppose the draft as they fear it will jeopardize labor rights.

The proposed reform was aimed at reducing delays in obtaining environmental permits, yet the World Bank report noted that these delays were caused by “cumbersome processing and arbitrary and corrupt implementation, rather than the protection enshrined in the environmental law”.

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