JAKARTA (Reuters) – Indonesia’s government handed legislation to parliament on Wednesday to speed up the pace of economic reform and improve the country’s investment climate, prompting a protest by trade unions.
The “Job Creation” bill is one of several of President Joko Widodo’s so-called “omnibus laws” or bills that group together changes in unrelated legislation to allow parliament to vote on them in a single swoop.
Foreign investors often cite regulatory uncertainty, bureaucratic hurdles and strict labour rules as among their top concerns about Indonesia.
“We’re here to hand over the president’s letter, the draft (of the bill) and its academic paper,” said Airlangga Hartarto, coordinating minister for economic affairs.
“At the same time we will promote the bill across Indonesia … so that society knows what is being discussed, decided and the impact for the national economy. The content is purely to create jobs,” he said.
Details of the bill have mostly been kept under wraps due to the sensitive nature of changes in labour rules and foreign investment limits, but trade unions have already criticised it and called it “modern-day exploitation”.
Hundreds of union members rallied at the front gate of parliament’s building on Wednesday to protest against the bill.
A source with knowledge of the issue told Reuters the bill includes proposals to cut severance payments, but it will also order companies to provide cash benefits upfront to appease unions.
Government officials have said new rules related to minimum wages will also be proposed and there will be chapters on simplifying the cumbersome business licencing system.
Other known major proposals in the bill include incentives for investment in metal and coal processing and changes in coal mining concession rules.
Economists say Widodo’s omnibus laws could boost growth in the second half of the year, assuming timely approval by parliament.
Growth slipped to the slowest in three years in 2019, at 5.02%, and is likely to be pressured further this year by an economic slowdown in China as it battles a coronavirus outbreak.
The president has asked lawmakers to finish debating the Job Creation bill and another omnibus legislation on taxation within 100 days. His ruling coalition controls nearly 75% of the seats in parliament.