NEWS18 Explanation: What is at stake with Indonesia’s controversial job creation law?

Amid renewed pressure from unions and environmentalists to reverse the law, Indonesia’s parliament is set to reconsider a controversial job creation law during its 2020 passage to comply with a court order to correct procedural loopholes. ready for

What is Employment Generation Act?

The so-called “omnibus law” was President Joko Widodo’s flagship legislation, revising more than 70 existing laws aimed at eliminating red tape, improving the investment climate and creating jobs in Southeast Asia’s largest economy. was. It has a wide reach, covering topics ranging from labor rights, tax regulations and permits for mining and plantation business to the formation of Indonesia’s Sovereign Wealth Fund.

Why is this controversial?

Labor unions, student groups and environmentalists have complained that the law was too pro-business and undermined protections for workers and the environment.

Labor reforms brought in by the law include cutting mandatory severance benefits, new minimum wage limits and the removal of some mandatory paid leave.

Green groups complained that the law only required high-risk investments to conduct environmental impact studies, rather than the broader requirement under previous laws.

Some critics have also accused the government of rushing through the debate process without proper public consultation. The government had argued that previous labor regulations were too stringent and discouraged foreign investment, adding that environmental protection was not being forfeited.

How was the law challenged?

Workers and students staged massive protests across the archipelago after the law was passed in October 2020, prompting trade unions and civil society groups to file judicial review in the Constitutional Court.

The court took nearly a year to hear the case and ruled in November 2021 that the handling of the law was procedurally flawed and unconstitutional in part, including changes made after parliamentary approval.

The court, whose decision cannot be challenged, ordered the government and parliament to make changes within two years or the law would be deemed “permanently unconstitutional”.

What has happened since then?

Lawmakers last month revised a law that regulates how legislation is passed. The amendments included specifying what counts as public consultation and a new legal basis for an “omnibus”-style bill, allowing the bill to replace a number of laws covering sometimes unrelated topics. .

That amendment was widely designed to help the government comply with the court’s ruling, and critics, including unions and green groups, saw it as an intention to re-speed up the process of debate by lawmakers. I saw

A union official told Reuters that workers plan to hold protests in parliament on June 15 and demand the rollback of labor rules to the 2003 labor law.

Greenpeace campaigner Asep Komaruddin said he hoped lawmakers would eliminate parts of the law that could be harmful to the environment.

It is not clear whether the government will consider more significant changes to the law giving importance to foreign investors. A senior lawmaker told Reuters that the renewed debate would take place solely in rummaging through the contents of the law.

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