The landmark passage of the Omnibus Law on Job Creation is the foundation for President Jokowi’s vision of Indonesia as an upper middle-income country by 2045. The Law makes changes to more than 70 laws across various industry sectors reflecting its tremendous ambition. It seeks to strengthen and transform Indonesia’s economy by increasing competitiveness, creating jobs and making it to easier to do business in Indonesia.
Business licensing, investment, taxation and labour rules to boost job creation are the focus of the Law. The Law includes meaningful gains across investment rules such as in the infrastructure, power and shipping sectors to note a few. Changes to labour provisions were passed with broad agreement across most stakeholders; a Labour law that, despite efforts, had not been reformed since 2003.
The Omnibus Law has captured worldwide interest with particular attention on the environment. The Law does not change Indonesia’s environmental standards nor rolls back environmental gains in areas such as reducing deforestation. Rather, the focus of the Law is on the investment licensing process and how best Indonesia can realize investment consistent with its ambitious environmental goals.