Perpres on Foreign Workers Stricter, Clearer

KOMPAS/DIDIE SW

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Presidential Regulation (Perpres) No. 20/ 2018 on the employment of foreign workers was the main issue raised by workers during recent May Day rallies.

The Perpres was issued to ease foreign worker (TKA) employment requirements. In fact, if carefully studied, the Perpres is actually more stringent in regulating the employment of foreign workers than the previous Presidential Decree No. 72/2014, which regulated the same thing.

Stricter

There are at least five requirements stipulated in PerpresNo. 20/2018 that are more stringent than those in PerpresNo. 72/2014. The requirements are on various documents that must be filled, the procedures for extending the permits for the employment of foreign workers, employer guarantees and protection obligations.

PerpresNo. 72/2014 did not regulate the limitation of certain job positions, while PerpresNo. 20/2018 prohibits foreign workers from occupying certain positions. In addition, the qualification and competence requirements and the restriction on the employment of foreign workers in certain positions are determined by related ministries or other government institutions.

Another stringent requirement is one related to the content in the Expatriate Placement Plan (RPTKA). Article 7 of Perpres No. 72/2014 regulates the content of the RPTKA, including details related to the company address, company name, occupation, work location, number of foreign workers, and/or citizenship.

The information requirement is simpler than the content of the RPTKA as stipulated in Article 7 of PerpresNo. 20/2018, which includes, among other details, the reasons for the employment of foreign workers, positions of foreign workers in the organizational structure of the company concerned, the duration of employment, and the appointment of Indonesian coworkers who will work alongside with the hired foreign workers.

This provision indicates that the employer must have a more comprehensive plan and adequately prepare the coworker who will work alongside the foreign worker. In addition, PerpresNo. 20/2018 also regulates that the RPTKA application must be accompanied by a number of documents.

The documents include a business license from a related institution; notarial deed and approval on the establishment and/or amendment of the company from a competent authority; the organizational structure of the company; a notification letter on the appointment of a coworker; an education plan and a notification letter on the implementation of education and job training; and a plan to carry out education and job training for Indonesian workers according to qualifications of the jobs filled by foreign workers – this provision was not regulated in PerpresNo. 72/2014

Another provision that indicates that PerpresNo. 20/2018 is more stringent is one related to the extension procedure. In the previous regulation, the extension application was submitted to the head of the district, governor or regent or mayor by appointed officials. With the regulation, the application for an extension permit must be submitted to the minister.

Another provision that indicates that PerpresNo. 20/2018 is more stringent is the obligation of the employer to guarantee the presence of foreign workers and the obligation to provide social security. This provision is an important part of the government’s diplomacy in that it could result in other countries also imposing a similar obligation to provide social security to Indonesian workers abroad.

Exceptions and relaxation

The provisions in Presidential Regulation No. 20/2018, which have been widely criticized, also include the exemption from the obligation to apply for an RPTKA and foreign worker work permit (IMTA) during an emergency situation.

Article 43 of Labor Law No. 13/2003 regulates that the exemption from the obligation to apply for RPTKA approval is not applicable to government agencies, international bodies and representatives of foreign countries. In Perpres No. 72/2014, the same exemption is applicable to government agencies, representatives of foreign countries and international bodies. In PerpresNo. 20/2018, the exemption is given to shareholders who serve as members of a board of directors or board of commissioners to the companies that hire the foreign workers, diplomatic and consular officers at foreign representative offices and foreign workers with certain job qualifications needed by the government.

The provision on the exemption of the obligation to have an RPTKA given to shareholders who are members of the board of directors or board of commissioners to the foreign workers employers as stipulated in Perpres No. 20/2018 is not stipulated in the Manpower Law. However, the law does not prohibit imposing the exemption on shareholders.

The provision of RPTKA exemption for foreign workers in certain types of jobs required by the government is also not regulated in Law No. 13/2003, but the law regulates exceptions for government agencies.

The provision is criticized because Perpres No. 20/2018 does not regulate the issuance of the IMTA. Law No. 13/2003 does not regulate the IMTA, but regulates a work permit known as IKTA. In the explanation of Article 43, paragraph 1 states that the plan for the employment of foreign workers is a requirement that should be provided to obtain the IKTA. The term IKTA has now become IMTA. In Presidential Decree No. 20/2018, in obtaining IMTA, employers are obliged to submit data on foreign workers who will be hired.

In emergency and urgent situations, employers are allowed to employ foreign workers by applying for RPTKA approval to the appointed minister or official no later than two working days after the expatriate workers begin their work.

The minister or the appointed officials should be given approval a maximum of one business day after the complete application is received. The challenge in this provision is in determining whether a situation is considered urgent.

Providing more clarity

PerpresNo. 20/2018, therefore, provides more clarity to investors or employers and to local governments. For investors, there is certainty over obtaining permits for the employment of foreign workers and this will provide certainty in doing business.

For the government, the obligation to appoint coworkers to work alongside foreign workers and the obligation to provide education and job training for Indonesian workers, in accordance with the qualifications of the jobs filled by foreign workers, will provide opportunities for thousands of young Indonesians to improve their skills and expertise. It will in turn create more job opportunities.

In addition, the arrangement and distribution of compensation funds for the employment of foreign workers will enable local governments to better estimate non-tax revenues and improve their development planning.

Previously, there was no regulation on the plan for compensation funds and there was no clarity on the distribution of the funds for the local governments. Now, the new presidential regulation clearly regulates that the compensation is handed out in the beginning of the second year to provide local governments with additional income. With the regulation, local governments can calculate the amount of funds to be received.

The compensation funds to be paid for the employment of foreign workers is US$100 per month per person and should be paid in advance for one year. It means that if there are 100 foreign workers, in the second year of work, the local government can estimate the additional income it will receive (1,200 times 100 people, multiplied by the rupiah exchange rate). Let\'s say the dollar exchange rate against the rupiah is Rp 13,000. So, in one year, the local government will get $1,200 times 100 people times Rp 13,000, which equals Rp 1.56 billion. The governments should use the funds to create new jobs for Indonesian workers in their respective areas.

Demand for the revocation of Perpres

During street demonstrations staged during the commemoration of International Labor Day recently, workers called for the revocation of Presidential Decree No. 20/2018. If the government restores Presidential Decree No. 72/ 2014, who will benefit from it? Is it true that the protesting workers will benefit from the lifting of the new presidential regulation?

It is certain that the workers who demanded the revocation of the decree will not lose if it is revoked. But thousands of young Indonesians and local governments will certainly suffer a huge loss. Thousands of young people who are preparing to become the coworkers will lose the opportunity to gain skills.

The hopes of local governments to raise additional income for their regional budgets will also vanish.

Dian Kartikasari, Secretary-General of the Indonesian Women\'s Coalition