2020 Omnibus Law on Job Creation

On 20 October 2019, after being sworn in for his second term, President Joko Widodo declared his intention to revise laws that inhibit job creation. He later said the revisions would be made in omnibus laws. The government initially aimed to submit the omnibus bill on job creation to the DPR in December 2019, but failed to meet its own deadline. On 12 February 2020, Coordinating Minister for Economic Affairs Airlangga Hartarto submitted the bill to DPR Speaker Puan Maharani. The government set a target of having deliberations conclude within one hundred days. However, the DPR leaders did not commence formal talks on the bill until 1 April 2020, when they discussed whether it should be deliberated on by a special committee or by the DPR's Legislative Council (Badan Legislasi)—a DPR body of eighty legislators from nine political parties. The Legislative Council was supposed to hold meetings to discuss concerns over the bill, but it instead formed a working committee for this purpose. The working committee, which did not contain representatives of all political factions in the DPR, began discussing the bill with the government on 14 April. The draft version of the bill was criticized by elements of the Indonesian media, human rights groups, workers' unions, and environmentalists for favouring oligarchs and restricting people's civil rights. On the other hand, the Indonesian Chamber of Commerce and Industry supported the bill. Following revisions of some contentious articles, the bill was passed by the DPR on 5 October 2020, three days ahead of a revised schedule and before another round of planned protests by labour unions. Just hours before the passage, thirty-five investment firms sent a letter warning the government of the bill's harmful consequences to the environment. ==Bill==

Sovereign wealth fund The law mandates the creation of an "Investment Management Agency" that would be managed by the finance minister for the purpose of creating a sovereign wealth fund. Pay and work hours The law abolishes minimum wage by sector, but allows regencies and cities to set minimum wages using a formula based on inflation or economic growth. The law abolishes fines for entrepreneurs who are late in paying wages. Previously, law No. 13 of 2003, the Manpower Law (also referred to as the Labor Law) permitted a maximum of seven hours of work per day, cumulatively making the maximum permissible hours of work per week limited to forty hours. The previous law also did not allow any kind of part-time work as a legal form of employment. The law stipulates that the structure and scale of wages is to be determined by a company's capabilities and productivity. This abolishes the Manpower Law's previous determination of wages based on position, years of service, education, and competence. The law reduces the cap on severance pay from 32 months' salary to 19 months' salary, plus six months' pay provided by the government. It also changes the 1-month of pay for every year of work standard for severance pay from the minimum pay to the limit. Digital companies such as Netflix, Steam, and Spotify will be required to charge customers a 10% value-added tax. Before the law was passed, outsourcing was only allowed for jobs that did not directly relate to production. Foreign nationals residing (for more than 183 days a year) in Indonesia will not be taxed for income earned abroad. Environment Environmental regulations for businesses were relaxed for projects not classified as "high risk", though such high-risk companies were still required to file an environmental impact analysis. In addition, environmental experts will no longer be involved in environmental impact analysis. The law hands over land use and authority permits to the central government and raises the fine for environmental damage. Investments The law shrinks the list of industries barred from receiving private investment from 300 to six: illegal drugs, gambling, endangered fish, chemical weapons, and industrial chemicals. Firing Rules for firing workers were relaxed and the required process of applying to an institution when firing workers, designed to protect workers' rights, were removed. ==Reactions==

Academics A number of typos in the final version of the law raised the suspicion that it was passed in haste. Academic Bivitri Susanti expressed the view that the Job Creation Law had several procedural breaches that made it not legally acceptable. Feri Amsari criticized the illegal revisions of the final draft after the validation carried out by parliament that could bring a jail term for breaking Criminal Code section 264 relating to the crime of falsifying authentic documents. Protests Since February 2020, many protests have been held around Indonesia in front of DPRD buildings and on various streets. Some protests have been peaceful, while others have turned violent, causing the destruction of property, as well as fatalities and arrests. One such influencer, singer Ardhito Pramono, later apologized on Twitter and stated he was paid to promote the bill. In addition to celebrities, other influencers and anonymous accounts were mobilized to populate social media with pro-Omnibus Law posts and deter criticism by using harsh words, harassment, and hoax accusations towards activists. International The bill was condemned by the International Trade Union Confederation and by 35 international investment institutions which collectively manage US$4.1 trillion in assets. Founder of opposition organization Action for Rescuing Indonesia Coalition (KAMI), Gatot Nurmantyo agrees with the law, saying, "I'll leave KAMI if it turns into a political party". Chairman of Gerindra Party, Prabowo Subianto also says the demonstration was funded by foreigners. ==See also==