Thousands protest in Indonesia against ‘omnibus law' on jobs

09 October 2020

BBC News :
Tens of thousands of Indonesians have protested for a third day against a controversial law that critics say will harm workers and the environment.
Rallies took place around the country. Hundreds were arrested in Jakarta. Hundreds more have been held in strikes and protests in other cities this week.
The so-called "omnibus" jobs creation bill became law on Monday.
The government says the changes are needed to help its economy which has been hit hard by the Covid-19 pandemic. Demonstrations have gathered steam in the capital Jakarta and other cities such as Bandung on Wednesday and Thursday, after relatively peaceful protests earlier in the week. Indonesian police detained at least 400 protesters, including some who were allegedly armed with molotov cocktails and sharp weapons.
The bill, which is over 1,000 pages long and amends 79 existing laws, was passed with the support of seven out of nine parties.
Why enact the law?
The bill is aimed at relaxing Indonesia's complex web of business, labour and environmental laws in an attempt to attract investment and stimulate the economy.
In an interview in January, President Joko Widodo told the BBC that the law is about removing red tape and opening the economy to more foreign investment.
"We want to simplify the licensing and bureaucracy [process], we want speed, so a harmonisation of law is needed to create speedy services, speedy policymaking, so that Indonesia would be faster to respond to every world change," he said.
Indonesia's economy, which is the largest in South East Asia, shrank by 5.3% in the second quarter of this year.
What does the law do?
In addition to removing red tape, the bill makes significant changes to Indonesia's labour regulations.
It abolishes the sectoral minimum wage, in favour of minimums set by regional governors.
It will reduce severance pay to a maximum of 19 months salary, depending on how long the employee has had the job. Previously the maximum was 32 months pay.
However, a new government fund will provide an additional six months pay to the newly unemployed.
Allowable overtime will be increased to a maximum of four hours in one day and 18 hours a week. Businesses will only be required to give workers one day off a week instead of two.
Restrictions on outsourcing have also been reduced, as have restrictions on the jobs in which expatriates can work.
The law also relaxes environmental standards, only forcing businesses to file an environmental impact analysis if their projects are considered high risk.
The so-called "omnibus law" is expected to create nearly three million jobs for young people who start looking for work and six million people who are unemployed because of the Covid-19 pandemic.
While Indonesia's ranking in the World Bank's Ease of Doing Business index has significantly improved in the past five years, it remained stagnant at 73rd in 2019.
It lags behind Vietnam and it is still far away from meeting the government's target for Indonesia to be ranked 40th.
Mr Widodo has blamed it on complicated and lengthy business permit issuance in Indonesia, which he said could take up to 13 days while in China it only took around nine days.
Keen on luring companies that want to move manufacturing out of China, the government and lawmakers appeared to speed up the law deliberation process to tackle those investment problems.

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