Indonesia has passed a broad bill that would weaken environmental protection and workers’ rights in an effort to boost investment, a move condemned as a “tragic miscalculation” that could lead to “uncontrolled deforestation.”
Groups representing millions of workers said they would strike on Tuesday in response to protest against the bill, which would amend nearly 1,200 articles in 79 existing laws after it was passed in parliament with unprecedented speed. Police said that a permit to protest had not been approved due to the Coronavirus pandemic.
The bill has also been criticized by both environmental experts and some of the world’s largest investors, who have expressed concern about its impact on the country’s tropical forests. A group of 35 investors – including Aviva Investors, Legal & General Investment Management and the Church of England Pensions Board – said they fear the changes would “risk violating international best practice standards”.
The government argues that the bill will make the country more attractive to investors at a time when the economy is suffering from the impact of Covid-19. Millions of people have lost their jobs as a result of the virus, which has infected more than 300,000 people and killed 11,253 people.
Officials believe the changes will help Indonesia attract companies relocating from China. Overall, “the passage of the law should be seen as a positive development”, said OCBC economist Willian Wiranto, but added that the impact will take time to clear.
According to the draft bill, mandatory paid leave for childbirth, weddings, baptisms and bereavement leave, as well as menstrual leave for women will be abolished. Overtime will be increased to four hours per day, and mandatory end-of-service benefits paid by employers will be reduced, from 32 times the monthly wage to 19 times the monthly wage. The state will also pay six months wages to the person concerned.
Regulatory hurdles designed to protect the environment will also be reduced, with only high-risk investments required to obtain a permit or conduct an environmental impact assessment before starting operations. Although local authorities usually grant permits, the central government will gain the authority to take over this process in some cases.
Restrictions on foreign participation in some sectors will be eased, and the government will establish and manage a land bank to acquire land in the public interest and redistribute the land.
Willem Keane, chief campaign manager at Mighty Earth Environmental Group, said the Indonesian parliament had made a “damaging wrong choice between environmental sustainability and economic growth” and that the bill would legalize “uncontrolled deforestation as the driver of so-called professional investment job creation policy”.
Ken added that foreign investors increasingly rely on environmental sustainability in their investment decisions.
Critics say the hasty way the legislation was quickly passed through parliament meant that there was not long time for scrutiny, and that the government was failing to consult experts. On Monday, police reportedly prevented thousands of workers from demonstrating at the Indonesian Parliament building in Jakarta.
Esfinawati, president of the Indonesian Legal Aid Foundation, accused parliament of ignoring the will of the people. “ There is clearly significant protest from various sectors such as labor, the indigenous community, students, farmers, women’s groups, and many more – but [the government] It continues to progress. “She is deaf,” said Esfinawati.
In 1997, she added, an earlier attempt to undermine workers’ rights was met with massive protests. Ultimately, the government and parliament agreed not to implement it. So it is a matter of political will for [president Joko Widodo’s] And the administration and parliament to decide whether to implement it. “
Rallies held against the bill were relatively small, although Asfinawati and others said they would continue demonstrations.
“We will continue to strike at the national level,” Nining Illitos, head of the Al Qasabi workers group, told Reuters. Ahmed Jamali, head of the Tangerang branch of the Metal Workers Union, said the workers intended to stop production in protest of the law.