Indonesia’s protests reignite over controversial labour law

Bloomberg

Student groups across Indonesia resumed protests against a landmark labour law passed earlier this month that opponents say will erode workers’ rights and dismantle environmental protections.
The renewed protests come after police detained thousands of people last week as demonstrators in Jakarta clashed with officers, hurling rocks and bottles and setting alight bus shelters. Labour unions plan to challenge the constitutionality of the legislation they say was hurried into law under opaque circumstances.
Passed by parliament, the sweeping reforms are aimed at addressing systemic red tape that has long deterred foreign investors. Once enacted, President Joko Widodo’s administration hopes it will bolster local businesses and stimulate job growth while bringing billions of dollars into an economy hit hard by the pandemic.
For Jokowi, as Widodo is known, the law’s passage without the support of powerful unions shows a determination to hasten key reforms at the heart of his economy-focussed policy agenda, even if it risks stoking already simmering discontent.
“Since his re-election, Jokowi has been in a rush to pursue reforms that he thinks will boost growth, but the backlash against the omnibus law shows the risks of this approach,” said Ben Bland, director of Lowy Institute’s Southeast Asia program. “Governance reform is a complex, long term process.”
When Jokowi set out to deliver the job creation bill following his re-election last year, his administration sought to develop a draft that would appeal to businesses and labour unions. Businesses have long complained they are hamstrung by a complex minimum wage system and restrictions on hiring and firing, making it difficult to expand operations. Yet, with staunch opposition and worsening public backlash to changes to the 2003 labour code, Jokowi earlier this year struggled to get the bill in front of lawmakers.
Said Iqbal, president of Indonesian Trade Union Confederation, recalled stakeholders stressing the need to reach
a compromise when unions joined the government-led negotiations in Jakarta in July. But the talks quickly soured.
“Unfortunately, in that first meeting, business associations arrogantly refused our draft,” Iqbal said by phone. By the second meeting, he said the government omnibus task force withdrew the need to reach a consensus, saying the talks were purely consultative. “We decided to walk out from the discussion,” he said.
A day after the bill was passed, the Minister of Manpower Ida Fauziyah said its “essence” reflected input from experts and stakeholders including trade groups.