08 Oct 2020
Reformist Job Creation Bill Passed by Indonesia’s House of Representatives

In our ABNR Legal Update on the Job Creation Bill that was published on 26 February 2020, we commented as follows:

The opportunity to effect fundamental economic reforms, such as those proposed in the Bill, is greater now than at any time since the dawn of the New Order in the mid-1960s. This is because the Government currently enjoys an overwhelming majority in the DPR[1] that is unprecedented in the country's recent history.

The Government has now seized the opportunity made available by the advantageous parliamentary arithmetic to ensure the passing of this far-reaching legislation at a plenary sitting of the DPR on Oct. 5, despite strong opposition from myriad civil society groups. The Government’s success in doing so was assisted in no small part by the ongoing Covid-19 crisis, which resulted in reduced public participation during the deliberation process and labor protests that have been more muted than might otherwise have been expected.

The legislation, undoubtedly the most wide-ranging in Indonesia since the adoption of the Civil Code in 1847, amends or repeals almost 80 statutes, which taken together cover virtually all major economic sectors as well as many important facets of the country’s governmental, regulatory and planning systems.

According to the Government’s own count, 35 Government Regulations and 5 Presidential Regulations will now need to be issued in order for the legislation to be fully put into effect. While the text of the legislation sets a deadline of three months for the issuance of these new regulations, the President has instructed his ministers to have them on the statute book within just one month. Given the country’s long-standing problems related to the synchronization and harmonization of legislation, the setting of such a tight deadline could cause problems down the road. We can only hope that the various ministries and agencies have been beavering away on the drafting work behind the scenes.

Given the importance of the new legislation to investors, we will be publishing a series of ABNR Legal Updates on selected key aspects over the next few weeks. However, should you need urgent advice or information on the legislation’s implications for specific sectors or operations, please feel free to contact any of the persons below.

Mr. Emir Nurmansyah (enurmansyah@abnrlaw.com)

Mr. Nafis Adwani (nadwani@abnrlaw.com)

Mr. Agus Ahadi Deradjat (aderadjat@abnrlaw.com)

[1] Dewan Perwakilan Rakyat, Indonesia’s House of Representatives

This edition of ABNR News and the contents hereof are intended solely to provide a general overview, for informational purposes, of selected recent developments in Indonesian law. They do not constitute legal advice and should not be relied upon as such. Accordingly, ABNR accepts no liability of any kind in respect of any statement, opinion, view, error, or omission that may be contained herein. In all circumstances, you are strongly advised to consult a licensed Indonesian legal practitioner before taking any action that could adversely affect your rights and obligations under Indonesian law.