Political parties within the commission agreed to move forward with the deliberation of the bill at the upcoming plenary meeting, which is the final stage for passing it into law.

Trade Minister Muhammad Lutfi told lawmakers during a hearing on Wednesday that the law would include several aspects of e-commerce regulation, including consumer protection, protection of e-commerce platforms, intellectual property rights, competition and cybersecurity.

“I hope this bill can be passed soon and the ASEAN Agreement on E-commerce can be implemented immediately,” Lutfi said on Wednesday.

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Lutfi added that the bill was essential for Indonesia to keep up with the rapid growth of the e-commerce industry. E-commerce transactions in Indonesia are expected to grow by 33.11 percent to Rp 354.3 trillion (US$24 billion) in 2021, according to the ministry’s data. 

The rapid growth, Lutfi said, is also reflected in the number of companies in the digital economy, with Indonesia home to several unicorns — or start-ups valued at more than $10 billion, namely Gojek, J&T, Tokopedia, Bukalapak, Traveloka and OVO.

The AAEC was negotiated from June 2017 to 2018 and signed on Jan. 22, 2019. The government began the ratification process with hearings of the bill in November 2019 and January 2020, but the process was delayed for a year and a half by the COVID-19 pandemic. The government submitted the bill to the House in December 2020.

Law on the digital economy

During a Q&A session with lawmakers, Lutfi expressed concern regarding the limited scope of the proposed law, as it only regulated e-commerce, which is a small part of the larger digital economy. 

Lutfi said he was discussing with Coordinating Economic Minister Airlangga Hartarto whether to issue separate pieces of legislation or one for the entire sector.

Lutfi left no doubt about his own preference: “We are working on it to get there. We think there must be a law not just for e-commerce but for the digital economy.”

Read also: Ministry vows to tackle e-commerce ‘price manipulation’

He added that the ministry had postponed the implementation of a new ministerial regulation on e-commerce. Meanwhile, the ministry was looking for a project management officer (PMO) and discussing how to regulate the matter. 

Should the government pass the bill, the impact on Indonesia’s economic growth could be significant, he argued, adding that the law could help bring to Indonesia many operations and businesses currently conducted by foreign digital economy players.

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