Jakarta. The government has issued a regulation in lieu of the job creation law to provide a secure footing for key economic policies in the face of global uncertainties and a gloomy outlook for 2023 which require rapid and appropriate responses, Justice Minister Yasonna Laoly said in an exclusive interview with BTV news broadcaster on Thursday evening.

The law stipulates a series of major policy changes aimed at improving the business and investment climate that will eventually create more jobs in the country.

“If we don’t make a significant breakthrough and structural reform to improve the business climate now, it will be too late for us to make corrective measures later,” Yasonna said.

According to him, the issuance of an emergency regulation was deemed necessary after the Constitutional Court froze the law and gave the government two years to amend and ensure that its adoption involves public participation following a legal motion by some elements of the society last year.

“It came under the spotlight because the job creation law is a [legislation] product which deals with as many as 77 different laws to the surprise of many, and they were [codified] under a new, previously unheard method called the omnibus,” Yasonna said.

“It gave the impression as if we had forced the law merely for the sake of investment but in reality, it has a high degree of partiality toward small and medium enterprises.” 

Yasonna claimed that the emergency regulation is basically a copy of the frozen law although it carries delicate adjustments to provisions on manpower, halal certification, taxation, and financial ties between central and regional governments.

He denied allegations that the government took a coercive approach to rush into the emergency regulation disregarding public inputs.

“Pros and cons are a normal thing in a democratic nation. We have been working on it for a year since the Constitutional Court [froze the law],” he said.

“And we have compelling reasons: prognoses and economic outlook by the IMF, the World Bank, Bloomberg, and all others mentioned a gloomy prospect.”

Indonesia is no exception for the immediate outlook that remains bleak unless anticipatory measures are taken including issuing a regulation in lieu of the job creation law, the minister said, adding that “the ball is now in the House of Representatives’ court”.

He argued that the emergency regulation doesn’t contravene the Constitutional Court verdict because it took into consideration public feedback and necessary amendments.

The Indonesian judiciary system also allows the government to issue a regulation in lieu of the previous law, but the House won’t have the capacity to discuss it further – its main duty is to accept or deny it.

In November 2021, the Constitutional Court accepted a motion by several non-governmental organizations to freeze the law and ordered the government and lawmakers to make necessary revisions within two years, or the law is declared unconstitutional, null, and void.

The ruling highlights improper procedures in the making of the law and the fact that it underwent some key changes in the wording after the enactment by the House and the government.

The court also revealed a fact that the formulation of the law had “failed to optimize public participation”.