The Omnibus Bill on Job Creation Will Be Discussed Openly

The discussion on the omnibus law on job creation should balance the interests of employers and workers. The government and House members have promised to discuss it openly.

KOMPAS/P RADITYA MAHENDRA YASA

Factory workers cross the Ungaran-Bawen road to go to work in an industrial area in Ungaran, Semarang regency, Central Java, Thursday (13/2/2020). The Job Creation Bill, which is currently being prepared by the government, is considered not to involve labor, so it is feared to harm them.

JAKARTA, KOMPAS - The omnibus law on job creation submitted by the government to the House of Representatives (DPR) recently has triggered debate among the public. Employers want ease of doing business in order to be able to create jobs, while workers demand their rights and legal protection to be accommodated in the proposed omnibus law.

The government and the House have promised to discuss the bill openly and receive all input from the public. The government expects the deliberation of the draft omnibus law on job creation to be completed in mid-May 2020.

Coordinating Economic Minister Airlangga Hartarto said in Jakarta Friday (14/2/2020) that the government expects the participation and input from the public on the bill during its deliberation. "In the near future, we will also disseminate the information on the bill in in 46 regions throughout Indonesia," Airlangga said after attending a handover ceremony of an honorary doctorate (doctorate honoris causa) to the House Speaker, Puan Maharani, in Semarang City, Central Java.

For the government, Airlangga said, the omnibus bill on job creation will pave the way for the structural transformation of Indonesia\'s economy. The bill marks the third economic transformation in Indonesia after the era of President Soeharto and Sukarno.

The position of the DPR is to synergize the interests of the government with community groups, including laborers.

Meanwhile, House deputy speaker Aziz Syamsuddin gave assurances that the discussion of the bill at the House would be carried out openly. At present, the draft law and the presidential letter that accompany it are still in the registration process at the House Secretariat General.

After being brought to the leadership meeting, the DPR will announce it publicly. "The position of the DPR is to synergize the interests of the government with community groups, including laborers. In discussions at the DPR, we will listen to all input from all parties," he said.

The secretary of the Indonesian Democratic Party of Struggle (PDI-P) faction at the House, Bambang Wuryanto, said that the PDI-P was committed to fighting for the interests of the people. As the largest faction in the DPR, the party will listen to all input from the public and parties affected by the proposed omnibus law on job creation.

The law is a product of agreement so it must be discussed. In addition to negotiating with the government, the public can also provide input. "In compiling a problem inventory list, we thoroughly study the articles one by one and correct them if we consider the stipulation provided by the government inappropriate,” he said.

KOMPAS/ALIF ICHWAN

House of Representatives (DPR) Speaker Puan Maharani (second left) walks after a meeting with Coordinating Economic Minister Airlangga Hartarto (third left) on Wednesday (12/2/2020) at the Senayan legislative complex, Jakarta.

Balance of interests

The workers have opposed the bill. They said that the drafting of the bill did not involve the workers. The bill also eliminates several articles related to labor protection that are stipulated in Manpower Law No. 13/2003. The removed articles include Article 169 Paragraph (2) and Article 172. The two articles regulate financial and legal protection against laid-off workers and those who want to resign.

Because of this, workers and a number of people are worried that the regulations prepared by the government will not be able to meet the initial plan to boost economic growth.

The omnibus bill on job creation will lead to a decline in the income of the workers, which would in turn would result in a reduction in household spending as the largest contributor of the country’s economic growth. Investment growth that is not followed by an increase in workers\' welfare can slow economic growth.

We only have a lot of investment, a lot of jobs, but the quality is low.

The executive director of the CORE Indonesia research agency, Mohammad Faisal, said the main purpose of the omnibus bill on job creation to overcome overlapping regulations that hampered investment was sensible. However, the substance of the bill is not balanced with the objectives of economic growth to be achieved.

The bill contains many articles that sacrifice labor rights. On the one hand, low labor bargaining power can increase investment in terms of quantity. However, growth in quantity alone is not enough if the quality is not improved, he said.

In order to bring a significant impact on economic growth, the incoming investment must have a multiplier effect. First, investment can create jobs and increase workers\' income. Second, it could increase household spending and spur economic growth.

"With the imbalanced law, more investors may come because they are tempted by the low bargaining power of Indonesian workers. However, we only have a lot of investment, a lot of jobs, but the quality is low. If so, what is the impact on domestic industrial growth? " Faisal said.

KOMPAS/TOTOK WIJAYANTO

Labor activists hold banners ahead of a protest on Wednesday (12/2/2020) at the House of Representatives in Senayan, Jakarta. The protesters objected to the omnibus bill on job creation, which they claimed would sacrifice workers’ welfare for the sake of investment. They say that the bill threatens workers’ rights and welfare by excluding detailed provisions on minimum wage and the hourly wage system, eliminating severance pay, reducing work hours and altering the labor system.

The rector of the University of Indonesia, Ari Kuncoro, said the government should be able to balance the interests of the workers and employers in the omnibus law on job creation. “We should be careful in making labor regulations because it is very complicated. If the interests of entrepreneurs are not accommodated, there will be no investment. On the other hand, policy related to workers’ wages will affect household spending, “he said.

Ari further said that employers consider the severance pay a problem for them. They will not invest in Indonesia if labor regulations do not provide certainty even though domestic workers are considered to be of good quality. Therefore, labor regulations should be discussed separately, not related to other regulations, licensing, and taxation.

At the same time, the government must consider the impact of labor spending on the economy. The minimum wage policy and severance pay have an impact on purchasing power. "There is a revenue circle that the government must consider when drawing up labor regulations," Ari said.

We should be careful in making labor regulations because it is very complicated.

The secretary-general of the All-Indonesia Workers Association, Timboel Siregar, said that if you want to increase economic growth, the purchasing power of the workers should be increased so that household spending would increase. However, the omnibus bill on job creation will instead reduce the minimum wage and severance pay of workers, which will greatly affect their purchasing power.

The association of legislative councils in cities in Indonesia (Adeksi) is committed to supporting the implementation of the omnibus law on job creation. The chairman of Adeksi, Armuji, said that, in the near future, Adeksi would map out irrelevant regional regulations as well create steps to prepare for synchronization. "Yes, we automatically have to follow because the central policy must be implemented in the regions," he said.