Widodo’s Employment Creation Law, 2020: What Its Journey Tells Us about Indonesian Politics

Summary

EXECUTIVE SUMMARY

• • During 2020, the Widodo government introduced a new Bill for parliamentary consideration. This was the Employment Creation Law. It was also known as the Omnibus Law as it introduced amendments to seventy-four other existing laws on a wide range of matters.

• • The Bill provoked considerable controversy, especially provisions reducing protection of labour rights and weakening environmental protection laws. Several provisions introducing further deregulation of a range of activities also attracted criticism. The labour and environmental issues were the basis for a series of street protest mobilizations during the year. These also involved mobilizations where university students participated.

• • The Law was justified by the government in its supplementary material to the legislation as a strategy to attain a specific growth rate in the gross domestic product and arguing that the revisions in the Law were necessary to substantially improve what was described as Ease of Doing Business.

• • Despite the protests and criticism, the law was passed by a big majority in Parliament on 5 October 2020. All member parties of the governing coalition voted for the Bill, and it was signed into law by President Joko Widodo on 2 November 2020.

• • The political journey of this Bill into Law revealed very clearly the homogeneity of the Indonesian political elite, represented by the parliamentary parties, all of whom either supported or acquiesced to the Law. It was also revealed that sustained and mobilized opposition to the Law was basically confined to a section of civil society, with some sections, including important large trade unions, campaigning in only a moderate and constrained way.