Jokowi assures investors after court rules passing of jobs law unconstitutional

A protester holds a sign that reads “Overcome the virus, withdraw the omnibus [law]” during a protest on Nov 12 outside the House of Representatives in Senayan, Central Jakarta. - JP

JAKARTA (The Jakarta Post/Asia News Network): President Joko 'Jokow' Widodo has promised businesses that their investments will not be affected by the recent Constitutional Court ruling on the Job Creation Law, saying his administration would immediately work on a do-over of the lawmaking process.

The procedure of passing the law -- the key legislative item in the President’s ambitious yet controversial reform agenda -- was recently declared unconstitutional by the court, which also ruled that the government and the House of Representatives must start the lawmaking process again from scratch within two years.

If they fail to do so, the law will be permanently repealed and all the previous laws it has replaced must be reinstated.

In the meantime, the law remains effective.

“In a democratic nation that is based on the rule of law, the government respects and will immediately implement what has been ruled by the Constitutional Court," Jokowi said in a press conference on Monday (Nov 29), in his first official response to Thursday’s ruling.

"I have instructed the coordinating ministers and other related ministers to immediately follow up on the ruling as soon as possible."

The ruling was a major blow to Jokowi’s bid to cut red tape and bring in investment to Indonesia. Economists feared it would bring back business uncertainty, especially as interest from foreign investors has been steadily growing in Indonesia as an attractive investment destination.

Jokowi, however, gave an assurance that the ruling clearly said the law was still in effect pending the lawmaking do-over.

“All material and substance in the law and [existing implementing] regulations remain in effect without any provisions being revoked or declared invalid by the court," he said.

"Therefore, I assure businesses and investors, both domestic and international, that the investments that have been made and investments that are being processed and will be in process are safe and secure."

This, he said, did not affect his commitment to easing the process of doing business, which will eventually create jobs. Dubbed an omnibus as it was drafted to revise and combine 78 laws into 1,000 pages of legislation, the Job Creation Law was passed in October last year.

The government said more than 43,000 regulations needed to be streamlined in order to improve the nation’s competitiveness in the region. But the court found that the process of drafting the jobs law was flawed because the Constitution mandates that lawmaking be carried out in accordance with prevailing procedures laid in the 2011 law on the drafting of laws and regulations, which does not recognise such a concept as an omnibus law.

The court said the jobs law deliberation also lacked transparency and denied public participation. Parts of the law, meanwhile, have been viewed by labour and environmental groups as detrimental to labour rights and environmental protections.

Coordinating Economic Minister Airlangga Hartarto said the ruling did not cancel out the impact of the jobs law, such as the operations of the Indonesian Investment Authority (INA) because the government issued the implementing regulation prior to the ruling. He said it also would not affect the four newly established special economic zones (SEZs), which have lured Rp 90 trillion (US$6.2 billion) worth of investment commitments, or the changes to labour and wage laws.

The new online single submission (OSS), which streamlines the business-licensing process, also remains operational and it will still be used by the government to process new licences or the extension of existing ones.

For micro, small and medium enterprises, Airlangga said, it meant that the current relaxation in obtaining licences, as well as certain facilities to get halal certificates and the ones that allow the government to buy their products and services for official state procurement were maintained so far.

Since the start of its implementation on Aug 4, the OSS has issued nearly 380,000 licences, of which an overwhelming majority are for micro enterprises.

“Next, the government will write a letter to the House speakership to list the jobs law revision as a priority in the 2022 National Legislation Program [Prolegnas],” Airlangga said in a press briefing on Monday.

Coordinating Legal, Political and Security Affairs Minister Mahfud MD, meanwhile, said the government was committed to completing the revision sooner than the deadline set by the court.