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Politics

Jokowi signs controversial omnibus bill into law

Labor unions, students and Islamic groups have voiced objections

Indonesian President Joko Widodo's government says the omnibus law will create an additional 1 million jobs a year and increase worker productivity, which is below average in Southeast Asia.   © Reuters

JAKARTA -- Indonesia's President Joko Widodo has officially enacted a controversial "job creation" law, otherwise known as the omnibus law, by giving it his signature a month after the bill was passed by the parliament.

Widodo signed off on the law late on Monday. In Indonesia, when a new law is passed, it is enacted when the president signs it within 30 days of passage. But even without the president's signature, a law automatically takes effect after 30 days.

The law is a cornerstone policy of Widodo's second term in office, and makes sweeping changes to more than 70 labor, tax and other key laws to cut red tape and make the country more welcome to investment. But labor unions, students and Islamic organizations have all objected to the legislation, saying it diminishes workers' rights -- an issue given added urgency by the millions people without a job because of COVID-19.

Since the omnibus law was passed by the parliament on Oct.5, opponents have protested week after week, sometimes violently, calling on the president to cancel it by issuing a perppu -- a regulation in lieu of law.

Protests are unlikely to die down soon, especially as questions are being raised over the legitimacy of the legislative process. Since the parliament passed the law, there have been at least five different versions circulated publicly -- the document that Widodo signed on Monday being the fifth -- with changes to wording and content.

Jokowi, as the president is popularly known, has remained defiant despite the protests, and showed with his signature on Monday that he remains committed to the law. The government says it will create an additional 1 million jobs a year and increase worker productivity, which is below average in Southeast Asia.

Jakarta also hopes that more investment can kickstart Indonesia's economic recovery as the country continues to suffer from the coronavirus pandemic.

Indonesians hold a sign reading "The people's assembly revokes the omnibus law" as members of Indonesian trade unions and university students protest against the legislation in Sukabumi, West Java Province, on Oct. 7.   © Reuters

Widodo said on Monday the archipelago's gross domestic product likely shrank by more than 3% on an annual basis in the third quarter. GDP shrank by 5.32% in the second quarter, and a further contraction will mean Indonesia's first recession since the Asian financial crisis in the late 1990s.

One of the most controversial aspects of the law relates to protections for workers. Before the text was approved by the parliament, it listed 14 reasons for companies to dismiss employees. But by the time it was sent to the president on Oct. 14, the number had risen to 15, with the addition of dismissals resulting from arbitration by a dispute-settlement body.

Local media also report of changes to the calculation method for severance payments.

The text of the omnibus bill had grown to 1,187 pages from 812 by the time it was submitted to the president. A government source said this growth was the result of changes to page format and technical revisions to the text. 

But critics have accused the government and ruling coalition of mishandling the legislative process.

The bill's language was not finalized before its passage. The parliament was initially supposed to vote on the bill on Oct. 8, but the ruling coalition moved up the date to before the large-scale protests planned in Jakarta and other major cities starting Oct. 6.

As of Monday, the constitutional court had received three requests from citizens for a judicial review, and the court can now begin its process with the president signing it into law. Should the constitutional court deem the omnibus law illegal, it would be annulled.

The process has also raised questions for foreign companies, which the law is supposed to appeal to by making it easier to do business in Indonesia.

"We're trying to gather information, but there's still a lot of uncertainty about the situation," said a Japanese corporate representative in Indonesia.

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