Indonesia’s government defends legal challenge to job creation law

An aerial view of deserted main roads in Jakarta following the imposition of large-scale social restrictions by the government to prevent the spread of the coronavirus disease (COVID-19) in Jakarta, Indonesia

Indonesia’s chief economic affairs minister defended President Joko Widodo’s flagship job creation law at the Constitutional Court on Thursday, arguing the move to simultaneously amend scores of laws in one go was legal.

The law that was approved in parliament last year triggered widespread protests in Southeast Asia’s largest economy with trades unions filing a judicial review.

The so-called “omnibus” law, which amended 78 existing laws, is vital to create jobs by attracting investment via streamlined licensing and the avoidance of overlapping regulations, Minister Airlangga Hartarto told the hearing in a video call.

“Changes to these laws cannot be carried out through conventional means by changing the laws one by one, therefore a legal breakthrough was needed,” the minister said, noting such a method while unconventional had been done previously.

Airlangga said the government had followed steps mandated by the law from academic preparation to ratification, as well as getting input from independent experts and communicating the process to the public, including on social media.

Indonesia’s parliament passed the job creation bill into law last October through an expedited process, which included late-night and weekend deliberations.

The bill has been largely welcomed by business and the markets but criticised by unions and environmental groups for potentially reducing workers’ rights and relaxing environmental regulations.

The government says Indonesia needs to become more attractive to investors to boost an economy battered by the coronavirus pandemic.

Indonesia’s gross domestic product contracted 2.07% last year, the first contraction since the 1998 Asian financial crisis amid the coronavirus pandemic.

The court’s next hearing will be on June 24 to hear witnesses from the applicants.

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