Workers in Indonesia are protesting for the third straight day after a new job creation law was passed this week, thousands have taken part in strikes and demonstrations in several cities, with hundreds detained by the police, protesters are worried that the so-called “omnibus law” will hurt both workers and the environment, but the government says the changes are needed to help its economy which has been hit hard by the Covid-19 pandemic. Demonstrations have gathered steam in the capital Jakarta and other cities such as Bandung on Wednesday and Thursday, after relatively peaceful protests earlier in the week.
Indonesian police detained at least 400 protesters, including some who were allegedly armed with molotov cocktails and sharp weapons, the bill, which is over 1,000 pages long and amends 79 existing laws, was passed on Monday with the support of seven out of nine parties, the bill is aimed at relaxing Indonesia’s complex web of business, labour and environmental laws in an attempt to attract investment and stimulate the economy, in an interview in January, President Joko Widodo told reporters that the law is about removing red tape and opening the economy to more foreign investment, we want to simplify the licensing and bureaucracy (process), we want speed, so a harmonization of law is needed to create speedy services, speedy policymaking, so that Indonesia would be faster to respond to every world change, he said.
Indonesia’s economy, which is the largest in South East Asia, shrank by 5.3% in the second quarter of this year, in addition to removing red tape, the bill makes significant changes to Indonesia’s labour regulations, it abolishes the sectoral minimum wage, in favour of minimums set by regional governors, it will reduce severance pay to a maximum of 19 months salary, depending on how long the employee has had the job. Previously the maximum was 32 months pay, however, a new government fund will provide an additional six months pay to the newly unemployed.
Allowable overtime will be increased to a maximum of four hours in one day and 18 hours a week. Businesses will only be required to give workers one day off a week instead of two. Restrictions on outsourcing have also been reduced, as have restrictions on the jobs in which expatriates can work, the law also relaxes environmental standards, only forcing businesses to file an environmental impact analysis if their projects are considered high risk. The so-called “omnibus law” is expected to create nearly three millions of jobs for young people who start looking for jobs and six million people who have lost jobs because of the Covid-19 pandemic.