Jobs bill advances in Indonesia, over labor and environmental objections
By Richard C. Paddock
Indonesia’s parliament gave final approval Monday to a sweeping jobs-creation bill that would loosen labor and environmental regulations, moves that critics say would harm workers and permit widespread deforestation.
With seven of parliament’s nine political parties in favor, lawmakers easily passed the 905-page stimulus measure that aims to attract investment by slashing regulations contained in nearly 80 separate laws.
Parliament had planned to consider the bill at the end of this week but moved up the vote after labor unions called for a three-day national strike starting Tuesday to protest the legislation.
The measure has the backing of Indonesia’s president, Joko Widodo, who is expected to sign it quickly. He is eager to push ahead with the country’s economic recovery from the coronavirus, even though the number of cases is rising and large-scale social restrictions remain in place in Jakarta, the capital.
Indonesia, the world’s fourth most-populous country, has been among the hardest hit by the pandemic. Its economy is expected to contract this year for the first time since the Asian economic crisis of the late 1990s.
For more than two weeks, Indonesia has averaged 4,000 new cases a day. On Monday, it reached a total of 307,120 cases and 11,253 deaths. Health experts say many more cases and deaths have gone unreported.
Supporters of the omnibus bill say that it will attract investors by cutting regulations on businesses, speeding approval of projects and eliminating many permit requirements.
“This bill is meant to create jobs and attract investments, from within the country and abroad, that are expected to increase the prosperity of the people,” Heri Gunawan, a member of parliament who supports the measure, said during the debate.
But opponents argued that slashing regulations on businesses would come at a high cost to workers and the environment.
“The job creation bill is said to ease the way for business activities that increase investment and create more jobs, but the bill is full of various agendas that would potentially destroy the environment and violate the rights of the Indonesian people,” said Marwan Cik Asan, a member of parliament who opposes the measure.
Labor unions say that the legislation would harm workers by reducing severance pay, cutting mandatory leave, allowing longer work hours, and permitting the hiring of contract and part-time workers in place of full-time employees.
After the vote, the president of the Indonesian Trade Union Confederation, Said Iqbal, vowed to go ahead with a national strike Tuesday. He predicted that 2 million workers would participate.
“Laborers will voice their rejection of the omnibus law,” he said.
Environmentalists contend that by eliminating environmental reviews for many new projects, the legislation would lead to the destruction of primary rainforests that are essential in controlling carbon emissions and slowing climate change.
Supporters of the measure say they expect it to attract foreign investment. But some foreign investors said that relaxing restrictions on forest burning would have the opposite effect.
Hours before the vote, a group of 36 global investors representing more than $4 trillion in assets under management released an open letter calling on the Indonesian government to support the conservation of forests and peatlands and take a long-term approach to recovery from the pandemic.
For decades, much of the destruction of Indonesia’s rainforests has been caused by palm oil producers who burn huge swathes of land to clear it for plantations. Indonesia is a major exporter of palm oil.
The investors warned that by reversing recent gains in reducing burning, Indonesia could run afoul of restrictions being considered by the European Union on the import of products that result from deforestation.
“Protecting tropical forests is vital for combating climate change, the degradation of ecosystems, and biodiversity loss, all of which pose systemic and material risks to our portfolios as well as to the health of our societies, economies and environment,” the letter said.
The human rights group Amnesty International Indonesia also criticized passage of the measure, saying that parliament acted without consulting labor and rights groups and that the result is a measure that deprives Indonesian workers of their right to work and their workplace rights.
Amnesty’s executive director for Indonesia, Usman Hamid, said the measure could violate Indonesia’s commitment to protect human rights as a signatory to the International Covenant on Economic, Social and Cultural Rights. He urged parliament to reconsider.
“This is a catastrophic law,” he said. “It will harm workers’ wallets, job security and their human rights as a whole.”
Parliament approved the bill through a process known as “fraksi” in which each party casts a vote, rather than each lawmaker. This method is often used when there is little doubt about the result. About three quarters of parliament’s members support Joko.
In this case, only two parties opposed the bill, the Democratic Party of former President Susilo Bambang Yudhoyono, and the Islamic-based Prosperous Justice Party