New jobs bill in Indonesia comes under scrutiny

Critics say that the proposed bill will cut severance benefits and revise rules on outsourcing, while having a negative impact on the environment.
By: | September 25, 2020

The Indonesia government is pushing ahead with a Job Creation bill that it says will fix regulations to attract foreign investment and create jobs for two million Indonesians entering the job market every year.

Expected to be passed before the Indonesian parliament’s next recess period starting October 9, the bill is supported by a number of businesses, who say it will help them ride out the economic downturn caused by measures aimed at tackling the COVID-19 pandemic.

5.5 million people are expected to lose their jobs in Indonesia this year, with the country’s finance ministry expecting economic growth this year to hover between -1.1% and 0.2%. Indonesia’s national development planning ministry also projected there would be between 10.7 to 12.7 million unemployed Indonesians by 2021.

READ: Indonesia faces uncertain economic recovery

However, the bill, also known as the Omnibus Law, has not been universally welcomed in the country.

In an August 15 statement, the Indonesia Trade Union Confederation said the bill, if passed, could reduce the value of severance pay, as well as implement “exploitative” working hours.

It could also pave the way for unskilled foreign workers to enter Indonesia without written permission from the minister responsible, while also reducing health insurance and workers’ pensions with a lifelong outsourcing system, the unions added.

Green groups, meanwhile, say the proposed bill could lead to ecological disasters by relaxing requirements for environmental studies.