Indonesia: Omnibus law benefits big bosses, threatens people and environment

October 16, 2020
Workers taking part in the national strike against the new Omnibus Law on October 6. Photo: Industriall / Facebook

The corrupt Indonesian parliament passed the Omnibus Bill on Job Creation into law on October 5, which opponents referred to as the “Damned Bill”.

This was despite the very serious threat currently faced by Indonesian people with rising COVID-19 cases and the devastating impact the pandemic has had on people’s livelihoods and all aspects of social life.

The national government has failed to make serious efforts to contain the pandemic. Rather, they have focused on strengthening the position of powerful elite business interests, with the most recent effort being the passing of this new law.

On October 8, big protests demanding the law’s withdrawal were staged in large and small cities across Indonesia in almost all of its 34 provinces. Workers, university students, communities from different sectors, progressive political organisations and high school students took to the streets to loudly oppose this controversial law.

Thousands of protesters in Jakarta and many thousands more in cities and regions across Indonesia filled the main roads, gathered at government offices and parliament buildings, all while putting aside their concern about the pandemic. “COVID is scary, the Omnibus Law is worse,” said a metal worker who joined a protest in West Java.

Hashtag Mosi Tidak Percaya (Motion Of No Confidence) and Batalkan Omnibus Law (Cancel Omnibus Law) have flooded social media. Many critical analyses of the law, from academic communities, lawyer organisations and other competent institutions, are being circulated to the public.


Indonesian Corruption Watch reported that since September, Indonesian police had spent 408 billion rupiah on equipment specific to controlling large protests. As predicted, police and the army have made a brutal and repressive response to the demonstrations. Beatings, water cannon, tear gas and rubber bullets were used, and arrests took place at almost every demonstration.

Logistical and medical support for protesters was blocked by security forces. They also stopped journalists from reporting on the mass actions and some were violently assaulted. After many arrests, legal aid teams for protesters were denied meetings with their clients. Many protesters are reported as still missing.

Despite the complex content of the Job Creation bill, the passing of the bill by the Indonesian parliament was surprisingly and suspiciously quick.

In February, President Joko Widodo wrote a non-procedural proposal letter to the national parliament about the government-initiated bill. Parliament immediately put the proposed bill on the list of 50 new priority draft bills to be passed and signed off in 2020.

After a series of procedural missteps, parliament established a committee to work on the draft. At the same time, the government established a task force to coordinate with the committee and do everything necessary to secure the bill’s passing.

Finally, after a number of marathon and secretive meetings ‒ which sidelined open public criticism and public protests by academics, activists, worker unions, students and various civil society organisations ‒ parliament signed the bill into law.

Who gains?

A closer look at the profile of figures that have played siginificant roles in the parliament and in the government task force, immediately raised suspicions about the true purpose of the controversial bill.

Coordinating Minister of Economy, Airlangga Hartanto, who created the task force, is a very wealthy businessman with connections to a giant coal mining company in Eastern Kalimantan.

Chairman of the Task Force, Ruslan Roeslani, is also chairman of the Indonesian Chamber of Commerce and Industry and has business relations in media, pharmacy, finance, property, oil, gas and coal mining.

Chairperson of the parliamentary assembly responsible for passage of the bill, Azis Syamsudin, has connections with the coal mining industry and a close personal relationship with the former regent in Eastern Kalimantan, who is in jail for corruption.

Puan Maharani, the chairperson of the Indonesian national parliament has family investments in energy companies including oil.

Indeed, half of the national members of parliament have big business investments, as share holders, commissioners or company directors and, in one case, owning more than 1000 companies.

Since the first draft of the bill was leaked early this year, the public could smell the rotten agenda of certain vested interests that will gain the most advantage from the bill. The idea propagated by the government is that the new law will create jobs by promoting private investment. However, critical examinations of the content of the draft showed that Cipta Kerja (Job Creation) is simply camouflage to hide the government’s real agenda.

The law facilitates further huge capital expansion, mainly in the manufacturing and natural resources sectors, by making regulations to simplify private investment, strengthen the position of employers against the interests of workers, remove environmental protection laws and weaken the position of indigenous communities, traditional farmers and small fishers. Furthermore, it will “legalise” what have previously been illegal practices by big businesses involved in land-grabbing and ignoring of legal protections of ordinary people and the environment.

Exploitation, environmental destruction legal

Prior to this bill, ordinary people and NGO activists defending environmental and human rights have been criminalised when their interests come into conflict with corporations, and the passage of this law will further undermine the remaining legal rights of these brave activists.

Many sections of the bill expose the scandalous relationship between business and the state (government and parliament).

In relation to labour, clauses that appear in the previous Labor Law relating to wages, working hours and employment relationships have been replaced with more exploitative clauses in the new law.

The clauses on natural resources have abolished many environmental protection regulations, and simplified regulations on land function conversion, business licenses and construction permits, which will bring new threats to the environment and access to and control over natural resources for indigenous people, smallholder farmers and traditional fishers.

Concerning maritime resources, the new law will increase the size of the conservation area of the ocean, small islands and coastal areas – seemingly a good thing. But the implicit consequences of these clauses is to prohibit small traditional fishers from entering zones that they rely on for their livelihoods and that historically “belong” to them and their ancestors. To add insult to injury, hiding behind the “conservation” push is, in fact, preparation for future tourism industry projects run by big corporations in these same coastal regions.

Operationally, the Job Creation Law will allow the central government to override more local and regional decision-making about investment – a reversal of some of the gains of the Reformasi (reform) era and a return to centralised decision-making over access to and benefits from natural resource exploitation. This not only removes control at the local level, but loses the context of local situation and condition in decision-making.

The Job Creation Law purports to simplify or shortcut many regulation on one hand, yet the many topics of law within the legislation makes it unwieldy and likely to require potentially hundreds of clauses to make it operational. The already corrupt and chaotic nature of bureaucracy in government will further complicate the implementation of any remaining protection measures for people and the environment.

Not only is the law a total scandal, at a substantial level, at the procedural level it breaks the very basic principles of public transparency and participation. Those involved in the making of the draft are government bureaucrats, the business community and conservative pro-government scholars and ordinary people have actively been excluded from the drafting and debate process.

Finally, the most fundamental problem of the Job Creation Law is that it violates the constitution. In a democratic country, the public interest should always come before private interests. Meanwhile, this law is dedicated to securing further benefits for the rich elites, while sacrificing the interests of the majority.

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