The Curious Case of Omnibus Law
The Job Creation Law ignores environmental aspects and workers’ rights. It will end up reducing investment.
PRESIDENT Joko Widodo’s ambition to increase foreign investment by passing the omnibus job creation law will most likely miss its target. It is hard to believe that major global investors will rush to put their money into Indonesia when business ethics that respect the environment and human rights are discarded via this law.
One day after the Job Creation Law was passed, a number of international workers unions immediately sent a letter to President Joko Widodo asking for the law to be revoked. They claim that it will damage the rights and welfare of Indonesian workers. The opinion of these international labor activists cannot be taken lightly. They represent a lobby of labor movements in many developed countries, which are also the home countries of the very foreign investors that Jokowi wishes to attract.
It is workers who stand to lose the most under the omnibus law. Most obvious is the regulation that drastically cuts severance pay for dismissed workers from 32 months’ salary to 25 months. The job creation law also removes the limit on fixed-term employment contracts, which used to be limited to a maximum of two years. Under the new law, employees could be on contracts their whole lives.
The protests of workers that continue to spread all over the country should ring alarm bells for the government. At present, consumer awareness of the welfare of workers is spreading around the world. Buyers will not be reluctant to abandon well-known brands that do not care about workers. For example, the Japanese clothing producer Uniqlo was hit hard by the global “Pay up Uniqlo” campaign caused by the fact that one of its factories in Indonesia did not pay adequate wages.
Not only this, but a number of major companies—also because of consumer pressure—are now demonstrating awareness of environmental preservation in their production processes. With a number of articles in the omnibus law ignoring environmental protection, they will think twice before coming to Indonesia. For example, the job creation law removes the requirement in the Forestry Law for a minimum forest cover of 30 percent of the area of river courses or islands. The removal of this provision has the potential to increase the rate of destruction of Indonesia’s forests, which is the third highest in the world with 324,000 hectares being lost every year.
Furthermore, instead of imposing severe punishment, the Job Creation Law rolls out the red carpet to polluters of the environment. A number of acts that pollute nature such as violations of water and air quality standards now will only result in administrative sanctions. Previously, the Environmental Protection Law only imposed this kind of sanction for negligence that did not endanger human lives or health.
The statement by Environment and Forestry Minister Siti Nurbaya that administrative sanctions are more effective because they do not need a legal process does not make sense. We all know that the government has never been serious in taking legal action against corporations that damage the environment. For example, a number of oil palm plantations and forestry companies have continued to operate despite indications of either direct or indirect involvement in the forests fire. Without tough sanctions that create a deterrent effect, the fact is that environmental criminals will continue to do as they please.
President Jokowi’s administration seems to be unaware of the global changes demanding investment and economic growth that do not violate the rights of workers or damage the environment. Rather than going to so much trouble passing the omnibus law, the government should resolve important problems that obstruct investment such as corruption, excessive bureaucracy and the lack of legal certainty.