Indonesia issues emergency regulation to replace controversial job creation law
INDONESIAN President Joko Widodo has signed an emergency regulation, his ministers said on Friday (Dec 30), to replace a controversial job creation law that the court had ruled as flawed.
Some legal experts criticised the move as a government attempt to bypass proper debate in parliament. But chief economics minister Airlangga Hartarto said the regulation was to ensure legal certainty, and achieve the government’s investment target amid global geopolitical uncertainty.
The Constitutional Court last year ruled that the passage of the president’s vaunted Jobs Creation Law in 2020 was flawed due to inadequate public consultations. It ordered lawmakers to restart the process within two years, failing which the law would be deemed unconstitutional.
Indonesia’s so-called “omnibus” law revised more than 70 other laws, and was lauded by foreign investors for streamlining business rules in South-east Asia’s largest economy, which is notorious for its onerous bureaucracy. But it also sparked nationwide protests from workers, students and green groups, who said it eroded labour and environmental protections.
Noting the court’s ruling, Airlangga said: “Constitutionally, the emergency regulation will replace the Jobs Creation Law.”
An emergency regulation is usually effective immediately, but must receive parliament’s endorsement by the end of its next session to become permanent legislation. Parliament is due to return from recess on Jan 10, 2023, for what is typically a four-month session.
Chief security minister Mohammad Mahfud Mahmodin said the government opted for an emergency regulation because the routine procedure to comply with the Constitutional Court ruling would take too long.
The government needed to decide “strategic measures” in anticipation of the impact of a global economic downturn and potential food crisis next year, he said. Earlier this year, lawmakers had said they planned to redo the deliberation of the legislation.
Bivitri Susanti, a constitutional law expert from the Indonesia Jentera School of Law, criticised the move as “ridiculous” and “inappropriate” as it would reduce the time for proper debate in parliament.
“Everyone can see there is no emergency. It’s holiday time,” she said. “This emergency regulation is really a fait accompli from the president.”
Among the most controversial points in the Jobs Creation Law were relaxed rules on severance pay, as well as changes to the minimum wage formula, contract labour and outsourcing. It also included a stipulation that environmental studies would only be required for high-risk investments.
The emergency regulation introduced some changes to that law, to reflect trade unions’ demand, Airlangga said. This included the limiting of outsourcing to certain sectors, and adding a component for the formula used to set the minimum wage so that it would consider purchasing power.
He added that the government had conducted more public consultations about the law since the court ruling. REUTERS
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