President Joko Widodo sold the law as necessary to make the world’s fourth most populous country a better place to do business. But activists say it eliminates critical protections for workers and the environment.
A protest against a new job creation law in Jakarta, on Monday.
BANGKOK — Late on Monday night, President Joko Widodo of Indonesia quietly signed into law a divisive stimulus bill that has sent hundreds of thousands of Indonesians to the streets in protest.
The omnibus law was first pitched as a vital jobs-creation effort that would resuscitate Southeast Asia’s largest economy, slashing red tape and clearing a thicket of regulations that have discouraged investment.
But when they woke up on Tuesday, few Indonesians knew exactly what was in the new law, which had suddenly expanded from 812 to 1,187 pages. Inconsistencies abounded: Article 6 of 186, for instance, referred to an article 5(1) that was nowhere to be found.
“This is the worst legislative process that I know of in Indonesia history,” said Bivitri Susanti, a lecturer at the Jentera School of Law in Jakarta, the Indonesian capital. “There has never been such a mess.”
Indonesia has the largest coronavirus caseload in the region, with at least 14,000 deaths, and this year its economy is on track to enter its first recession in more than 20 years.
Critics have decried the new law for stripping labor and environmental protections in a country where such safeguards are already poorly enforced. The stimulus measures allow for certain development projects to proceed without environmental assessments or consultation with Indigenous peoples. The burning of Indonesia’s rain forests and peatlands, largely to make way for palm-oil plantations, is a major source of global carbon emissions.
The law gets rid of minimum severance pay requirements and mandatory days off for workers. It also allows businesses to replace full-time employees with cheaper contract workers. The Indonesian government says that it will generate about 1 million new jobs a year.
“The contents of the law, especially regarding the employment section, are almost entirely detrimental to the workers,” Said Iqbal, the president of the Indonesian Trade Union Confederation, said on Tuesday.
Mr. Joko, who swept to power in 2014 as a can-do technocrat unconstrained by Indonesia’s often corrupt politics, has sold the new law as necessary to make the world’s fourth most populous country a better place to do business. He won re-election last year for a second and final term, backed by a clutch of oligarchs who have been pushing for business reforms.
After the stimulus bill was passed by Parliament in early October, hundreds of thousands of Indonesians joined a three-day nationwide strike that, at times, devolved into violent protests. Mr. Said, the trade unionist, said that the strikes will continue.
His union confederation filed a suit at the Constitutional Court on Tuesday morning, arguing that the new law infringed on the constitutional rights of workers. A successful judicial review could lead to the law’s annulment, but legal scholars said the likelihood of such an outcome was slim.
On Tuesday, investors and academics alike were left desperately scanning the new law — which modifies dozens of existing labor, business and tax regulations — trying to figure out what exactly was in it. Incorrect paragraph references made clarity difficult. Provisions on who regulates Indonesia’s oil and gas reserves were removed entirely.
Five draft versions of the legislation have floated around Jakarta for weeks. What Mr. Joko signed on Monday night, one day before the deadline to sign the bill into law and while many labor activists and environmentalists were asleep, was a sixth iteration.
“This draft, even after he signed it, still has mistakes because they were rushing it,” Ms. Bivitri, of the Jentera School of Law, said. “This is what has made the public angrier because we are going to be greatly impacted by this law but they don’t even take the process seriously.”