By Try Ananto Wicaksono
Passed the controversial omnibus bill on job creation into law certainly felt like a dream come true for the Indonesian government and the House of Representatives. The law met mounting resistance from labor unions and environmentalists. During his second and final term, President Joko “Jokowi” Widodo’s key priorities to improve bureaucratic efficiency in particularly regarding business permits and investment. Previously, he disappointed that Indonesia is lagging in attracting foreign investment based on World Bank data in 2019 that shows from June to August 2019, 23 out of the 33 Chinese companies had relocated their factories to Vietnam. The rest went to Malaysia, Thailand, and Cambodia (Tobing 2019; AHK Indonesien 2020).
Similar conditions also occurred in 2017. When many Japanese companies relocated their factories, an estimated 73 companies chose Vietnam. While, 42 companies went to Thailand, 11 to the Philippines, and only 10 to Indonesia (ASEAN 2018; Salna 2019; Economic Times India 2019). To put the matter into perspective, in 2016, a Korean washing machine factory was able to move from China to Vietnam and Thailand in 60 days when the US raised tariffs (ASEAN 2017). This year, since the government working on the pandemic, which has had a significant impact on the global and national economy, the law is seen as necessary as the country needed to increase employment and improve the business climate following the pandemic. Therefore, simplifying regulations is key from government perspective.
The President Jokowi argues that foreign investment is the key for Indonesia to emerge from the global economic slowdown and it can also protect Indonesia from a global recession. Based on the Indonesian economy growth, in 2019, only 5.02 percent compared in 2018 with 5.17 percent (BPS – Statistics Indonesia 2020). Moreover, Indonesia’s economic growth in the second quarter of 2020 contracted or minus 5.32 percent. Compared to the first quarter of 2020, it was recorded at 2.97 percent (BPS – Statistics Indonesia 2018), a slowdown due to the COVID-19 pandemic. This is the first time for Indonesia since the 1998 period, when Indonesia experienced the Asian financial crisis. By pushing through his reform agenda, is expected to get benefit from the trade and investment redirection caused by the US-China trade conflict. Without a higher rate of investment, the growth will remain low, unable to create enough jobs to absorb.
The next question would be, what are the impacts of Indonesia Jobs Bill? Since it can be considered as human rights violation, obliterating labour rights, and even worse, it is stripping away environmental protections. More importantly, Indonesia Jobs Bill ignoring the law formation procedure. The ‘omnibus law’ method is not regulated in Law No.12 of 2011 jo Law No. 15 of 2019 concerning the Establishment of Legislation. Indonesia Jobs Bill actually contradicts with Pancasila, the foundational philosophical theory of Indonesia, on the fifth principle that stated “social justice for the entire people of Indonesia”.
First, the Indonesia Jobs Bill Article 77, paragraph 2 stated “The working hours as referred to in paragraph (1) are no more than 8 (eight) hours 1 (one) day and 40 (forty) hours 1 (one) week.” However, it is added in article 77A, which allows an increase in overtime for certain sectors. Employers may impose working hours that exceed the provisions referred to in Article 77 paragraph (2) for certain types of work or business sectors (DPR RI 2020). There will be unlimited working hours without any added income and increases the current overtime limit set by the existing Manpower Law from three to four hours per day and from 14 to 18 hours per week (Amnesty International 2020). This article violates the rights at work under Article 7 of International Covenant on Economic, Social and Cultural Rights (ICESCR) stated: “…recognize the right of everyone to the enjoyment of just and favorable conditions of work …”, and ICERS Article 7 paragraph d: “Rest, leisure, and reasonable limitation of working hours and periodic holidays with pay, as well as remuneration for public holidays” (United Nations 2009). Since Indonesia has signed and ratified The International Covenant on Economic, Social and Cultural Rights (ICESCR) on 23 Feb 2006 (United Nations Treaty Collections 2020), it could be potential for failing to comply with international.
Second, The Indonesia Jobs Bill stipulates that only businesses that “have important effects on the environment, social, economic, and culture” will require an Environmental impact assessment. Details on this stipulation will be regulated in a Government Regulation (PP). Based on amendments to Article 26 of Law 32/2009. Environmental experts will also no longer be involved in environmental impact analysis, the omnibus bill reveals. According to Article 24 paragraph 2, which stated that the environmental feasibility test is conducted by the Central Government (DPR RI 2020). While, according to Article 25 International Covenant on Civil and Political Rights (ICCPR) that “Every citizen shall have the right and the opportunity, without any of the distinctions mentioned in article 2 and without unreasonable restrictions.” and Article 25 paragraph (a) “To take part in the conduct of public affairs, directly or through freely chosen representatives” (ICCPR 1976). It means, the government shouldn’t limit the community involvement in impactful environmental issues. Again, Indonesia is a state party of the ICCPR by the acceding to the Convention on 23 February 2006, which entered into force for Indonesia on May 23, 2006 (OHCHR 2020). In response to the situation, Greenpeace Indonesia also demand investor countries examine Omnibus Bill thoroughly, as this Bill is a sign of the Indonesian government’s failure to protect its people, the natural resources, and the environment. She mentioned that it would be very difficult for Indonesia to fulfill its Paris Agreement commitments (Greenpeace Southeast Asia 2020).
The last, Indonesia Jobs Bill prolongs the non-precarious working contract, and it constitutes a regressive step, against the principle of progressive realization under Article 2 ICESCR. At the moment, almost all stakeholders against the Indonesia Jobs Bill, even The Asian Forum for Human Rights and Development (FORUM-ASIA) and its Indonesian members, Indonesia Legal Aid Foundation (YLBHI), Commission for the Disappeared and Victim of Violence (KontraS), Human Rights Working Group (HRWG), Indonesia Legal Aid and Human Rights Association (PBHI), IMPARSIAL, The Alliance of Independent Journalists Indonesia (AJI), and the Institute for Policy Research and Advocacy (ELSAM) has been made Joint-Statement to against the Bills (Asia 2020), but still, the government was ignorant about it.
The Indonesia Jobs Bill aimed to make it easier for investor, but it felt like the parliament tried to ‘betrayed’ its own citizens.
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Try Ananto Wicaksono is a student of a Master’s degree in Business Law, Gadjah Mada University (UGM) and a Master’s degree in Government and Public Policy, School of Government and Public Policy (SGPP) – Indonesia, His interest in Indonesia’s foreign economic policy, International Economic Law and Human Rights.