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🇮🇩 Labour laws divide in Indonesia

🇮🇩 Labour laws divide in Indonesia

Pandemic curtails pushback from workers

Hello friends!

Huge news Monday with the passing of the Omnibus Bill on Job Creation. Stakeholders have long complained they’ve been shut out of the deliberation process while President Joko Widodo has made it the crown jewel of his second term (well I guess if moving the capital didn’t pan out!).

As the Jakarta Post writes, every single Indonesian will be affected one way or another by the changes to 73 laws from labour protections to halal certification. Oof, it’s a biggie.

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(this one is from the students last September, but I’m going to assume the point still stands)

Start here with Friend of the Letter Randy Mulyanto. His explainer for the South China Morning Post back in August lays out what the laws are aimed at and the cases both for and against. He also notes the dystopian revelation from the Demographic Bonus Network (Jaringan Bonus Demografi) that the organisation had paid 22 celebrities and influencers up to 10 million rupiah to support the changes under the #IndonesiaButuhKerja, or #IndonesiaNeedsJobs, hashtag. Woof.

The organisation told the Koran Tempo newspaper that the campaign was paid for by funds raised by academics (oh yeah!) and young entrepreneurs, but as Randy notes allegations that government cash was involved were widely circulated. I highly recommend clicking through and reading Randy’s piece in full.

The rights of workers

The major source of criticism for the bill is that it has pitted employers against employees (including foreign businesses against Indonesian workers) and business has come out very much on top. Back in June, Nadirsyah Hosen, Dr Jeremy J. Kingsley and Tim Lindsey wrote a scathing critique of the law including the telling like that while it had been called the ‘job creation bill’ the name is “an obvious ploy to win public support, but the bill is not really about job creation at all.”

At least five factions in the DPR want the bill’s title changed to “ease of doing business”, because that is what it is really about. Indonesia has long been notorious for a jungle of rules and permits that obstructs business, so these reforms are mainly intended to make life much easier for big business, including foreign investors – and, of course, the oligarchs who back Jokowi’s administration.

You don’t need to tell Indonesia’s workers this. Trade unions and activist organisation have staged demonstrations against the reforms since they were announced last year. Of course, the pandemic has put a curb on much of that action particularly in hard-hit Jakarta where Parliament sits. Forget the pandemic once the bill was passed Monday. Large strikes and protests across the country erupted Tuesday with a heavy police response reported in some cities including Bandung. The photos here are fantastic, well done Antara.

The International Trade Union Confederation (ITUC) has come out in support of the Indonesian chapter. “It is staggering that while Indonesia is, like other countries, facing the devastation of the COVID-19 pandemic, the government would seek to further destabilize people’s lives and ruin their livelihoods so that foreign companies can extract wealth from the country,” the ITUC wrote in a statement as reported by the Jakarta Post.

Environment worries

Mongabay did what it does best back in August laying out exactly what the reforms would mean for the environment. Indonesian Center for Environmental Law has raised similar concerns to workers associations that a lack of transparency over deliberations in passing the laws means it has been impossible to argue against some of the changes.

These changes include the ditching of ‘mandatory environmental permits, replacing them with an approval process based on self-declarations of compliance, and to limit public participation in environmental impact assessments,’ Mongabay reports.

Communities affected by projects including mining and forestry will no longer be able to challenge these projects in court and the approval process involving the district, provincial and national governments will also be gone. Yeesh.

“We fought tooth and nail to get environmental permits included in the 2009 environmental protection law,” Asep Warlan Yusuf, a law professor at Parahyangan University, said as reported by the environmental news portal.

Big business

Wait, we didn’t ask for this, says the very global investors who would be the presumptive target for these reforms. While you can’t have a drink in Kuningan without running into a bloke complaining about labour laws in Indonesia, the environmental changes have upset some.

A consortium of global investors with $4.1 trillion in assets says they’re not too happy. Reuters has obtained a letter from 35 investors from across the world concerned about what this all might mean in practice.

“While we recognize the necessity for reform of business law in Indonesia we have concerns about the negative impact of certain environmental protection measures affected by the Omnibus Bill on Job Creation,” Peter van der Werf, senior engagement specialist at Robeco, said in a statement as reported by Reuters.

And what of the job creation? Experts and analysts say that lawmakers have focused on the wrong aspect here. It’s not so much the legislation itself than the bureaucracy involved in doing business in Indonesia that is such a turn-off.

“The government makes the assumption that Indonesia’s biggest hurdle in terms of our competitiveness is labour costs. But there are issues like rampant corruption, complicated bureaucracy and high logistics costs which the government needs to address," Bhima Yudhistira Adhinegara, an economist at the Institute for Development of Economics and Finance, told Channel News Asia. None of that is in the Omnibus, he added.

Now what?

Activists and workers in Jakarta will continue to have a hard time protesting amid the pandemic restrictions currently in place. “If the government and the House didn’t force through the omnibus bill in the middle of a pandemic, then of course labourers wouldn’t insist on holding a rally,” Indonesian Metal Workers Federation protest coordinator Mubarok told media, which is kinda fair cop.

But there’s a lot of unknowns here. If this was normal life I’d expect to see it kick off hard out the front of the Parliament for the next couple of days and even more anti-Jokowi graffiti to be spotted around the capital. But this isn’t normal life and this isn’t a normal legal reform. We’ll be keeping a close watch on this in the coming weeks!