Job Creation Bill Not a Solution

Kompas/Heru Sri Kumoro

The meeting atmosphere of the DPR Legislative Body Working Committee continues the discussion on the list of problems inventory (DIM) of the Job Creation Bill at the Parliament Building Complex, Senayan, Jakarta, Thursday (27/8/2020).

In the midst of an economic crisis due to the Covid-19 pandemic, the deliberation of the job creation bill was expedited, but its urgency in resolving problems Indonesia faces is questionable.

JAKARTA, KOMPAS -- The government completed the preliminary deliberation of the job creation bill at the House of Representatives (DPR) Legislation Body on Saturday night (3/10/2020). The decision made at the meeting, which began on Saturday at 9 p.m. was reached after 63 meetings over the last six months.

The job creation bill is just a step away from being passed into law (UU). The schedule for a House plenary meeting to pass the bill into law has yet to be determined. For sure it will be before the House enters its recess on 9 October.

During the meeting on Saturday night, only two of the nine House factions rejected the decision to pass the job creation bill into law, namely the Prosperous Justice Party (PKS) and the Democratic Party.

The bill is designed as an omnibus law mechanism or umbrella act, the content of which encompasses 76 laws. This bill consists of 15 chapters and 174 articles.

Coordinating Economic Affairs Minister Airlangga Hartarto, through a press release issued on Sunday (4/10), said the job creation bill was needed to drive the national economic recovery in the midst of a pandemic. "This bill is aimed at resolving various problems that hinder an increase in investment and to open up job opportunities," said Airlangga.

KOMPAS/ALIF ICHWAN

Coordinating Economic Minister Airlangga Hartarto (center left), accompanied by House of Representatives (DPR) Speaker Puan Maharani (center right), meets the press after a closed-door meeting on Wednesday (12/2/2020) at the Senayan legislative complex, Jakarta. The pair, accompanied by several other Cabinet members, presented the President\'s Letter on the omnibus bill on job creation, which was delivered to the House on Feb. 12.

However, the executive director of the Center of Reform on Economics (Core) Indonesia, Mohamad Faisal, emphasized that, as long as Indonesia was unable to suppress the spread of Covid-19, investment would remain limited, even if the job creation bill is passed as soon as possible. He said the bill would not be as effective a solution for economic recovery as the government expected.

"Basically, the main problem is the Covid-19 pandemic. But the main problem has not been overcome properly,” said Faisal.

Data from the Investment Coordinating Board show that investment realization in the second quarter of 2020 amounted to Rp 191.9 trillion, down by 4.3 percent on the year.

A senior researcher at the Institute for Development of Economics and Finance (Indef), Enny Sri Hartati, was of the opinion that, if Indonesia was unable to tame Covid-19, investors would remain hesitant to invest even if the red carpet was rolled out with the new regulations.

These regulations were the revision of Law No. 30/2002 on the Corruption Eradication Commission and the revision of Law No. 4/2009 on mineral and coal mining.

Enny added that public trust in the government had been social capital for investors to invest in Indonesia. In the past year, however, trust in the government had been tarnished by a number of regulations and policies formed without taking into account public input. These regulations were the revision of Law No. 30/2002 on the Corruption Eradication Commission and the revision of Law No. 4/2009 on mineral and coal mining.

KOMPAS/TOTOK WIJAYANTO

A mass of workers from various elements rallied in front of the Parliament complex, Senayan, Jakarta, Tuesday (25/8/2020). They reject the Work Creation Bill (RUU) because the draft is considered to be impartial to workers and also reject termination of employment for reasons of the Covid-19 pandemic.

The move by the government and the House to force the deliberation of the job creation bill and eventually pass it into law has further eroded public confidence. This will affect social and political stability, which can make the investment climate unfavorable.

Restrict access

House Legislation Body member Ledia Hanifa Amaliah from the PKS faction said the deliberation of the job creation bill during the Covid-19 pandemic had limited access and participation of the public in providing input, corrections and improvements to the draft. "In fact, this law has an impact on many people and this nation," said Ledia.

Ledia added that the bill contained regulatory substances that had the potential to harm workers and laborers through amendments to several provisions that give more benefits to the employers.

House Legislation Body member Hinca Pandjaitan from the Democratic Party emphasized that the job creation bill was not urgent and lacked the emergency aspect that could justify its deliberation in the midst of a pandemic. "Because of the large implications of these revisions, they need to be examined one by one, carefully and more deeply, especially in relation to fundamental matters concerning the interests of the wider community," he said.

Meanwhile, workers are planning to strike on 6-8 October and stage a demonstration in front of the House building, where lawmakers are scheduled to have a plenary meeting for passing the job creation bill into law.

There is no good faith and seriousness from the state to care about the fate of the people.

The chairperson of the Confederation of the Indonesian Workers Alliance Congress, Nining Elitos, said workers had no other choice but to take to the streets and protest against the arbitrary legislative practices. "During the pandemic, when people are worried about their health and safety, we are forced to go to the streets. There is no good faith and seriousness from the state to care about the fate of the people," she said.

The president of the Confederation of Indonesian Workers Unions, Said Iqbal, said workers would go on a strike.

The points in the job creation bill opposed by the workers include arrangements for temporary employment (PKWT) and outsourced workers that are made in such a way that those workers may become nonpermanent workers for life. Workers also reject the bill because of the elimination of stipulations on the mandatory minimum wage (UMSK) and oppose the reduction in severance pay for laid-off workers from a maximum of 32 times the wages to only 25 times the wages.

According to Faisal, a number of provisions in the job creation bill threaten economic growth. For example, easier termination of employment and lower wages would reduce household spending.

Household spending accounts for more than 50 percent of Indonesia\'s gross domestic product. In the second quarter of 2020, household spending contracted 5.51 percent annually, dragging down Indonesia\'s economic growth to minus 5.32 percent.

House Legislation Body chairman Supratman Andi Agtas said on Sunday that the Legislation Body had sent a letter to House leaders to schedule a meeting with the House Deliberation Body (Bamus). The meeting would discuss the schedule of a House plenary meeting to pass the job creation bill into law. (AGE/BOW)