Indonesians Stage Protest Against New Jobs Bill

Thousands of Indonesians, under the aegis of several trade unions, have erupted and taken the streets of many cities in a protest against a new job law, drafted by the government in an attempt to respond to the COVID-19 pandemic impact. The protest, which was started today, would be expected to continue for three days and unions were expecting more people to join their fights against the new law.

On Monday, October 5, 2020, the parliament of Indonesia approved President Joko Widodo’s “omnibus” Job Creation bill, which has revised more than 70 existing laws to accelerate reform of Southeast Asia’s largest economy. Many critics including unions opposed the bill as it was pro-business, which aimed at promoting or inviting more investment for the country’s business organizations.

Indonesian investors and business heads welcomed the government’s latest move. Following the approval of the bill, the country witnessed a surge of its main stock index up as much as 1.31% and the rupiah reaching as high as 1.28%, before paring some gains today.

Indonesian Protests

As local media reported, several people staged demonstrations on Tuesday in many key industrial areas around Jakarta and on Batam Island as well as in major cities in Sumatra and Sulawesi islands. Moreover, television footage showed thousands of masks-wearing people were protesting in Bandung, West Java, and some of them indulged in setting fire on tires in front of the local parliament office.

According to media reports, police blocked the protestors who were protesting in front of the national parliament in Jakarta. The media reported that unions were expecting some two million workers to join the three-day national strike, starting on Tuesday, against the new law.

As Reuters explained that the law has removed the three-year maximum duration of contracts and reduced severance benefits while the government said these provisions were intended to promote formal hiring. Other reforms include longer working hours and changes to mandatory paid leave.

Pro-Business Economic Bill

Following the adoption of the new bill, the Indonesia Investment Coordinating Board said it would lead to better welfare for workers by facilitating more foreign investment. However, a member of the FSPMI trade union in Tangerang, west of Jakarta, Anwar Sanusi said, “The law will definitely affect the status of our employment,” adding that people were now fear of losing pensions and insurance due to the change in the law.

A Trimegah Securities economist Fakhrul Fulvian said banks and export-oriented industries should benefit from the law while consumer and retail sectors might be affected since workers had to increase savings to compensate for changes in labor rules.

Citibank, in a research note, said the law simplifies business licensing and addresses restrictive trade and labor policies, but added that immediate foreign investment was unlikely in the currently depressed global economic climate. However, many Indonesians criticized the law and called lawmakers traitors.