Indonesian Law No 11 of 2020 on Job Creation: "Omnibus Law"

  • Print

On 2 November 2020, Indonesia's President officially enacted the job creation law - commonly known as the "Omnibus Law". On 5 October 2020, the Legislation Body of the House of Representatives of the Republic of Indonesia ("DPR") and the Indonesian government agreed to pass the Omnibus Bill on Job Creation or what is commonly known as the Omnibus Law. The bill is a breakthrough effort by the government to comprehensively amend 76 sectoral laws and amend or revoke hundreds of regulations to create job opportunities and improve Indonesia's investment ecosystem.

Within seven days after the date of the plenary meeting at DPR on 5 October 2020, the bill will be delivered to the President, who is expected to sign the bill into law. Failing this, it will automatically become law within 30 days after the draft bill is jointly agreed by the President and DPR.

From the beginning, the Omnibus Law has attracted both criticisms and applauds. Despite its controversial deliberation process, many, including the government, believes that the Omnibus Law will accelerate Indonesia's national economic growth and encourage reform of the country's regulatory system, which in turn will make Indonesia more favourable for investment in today's global economy. Oppositions against the Omnibus Law have mostly come from labour groups, NGOs, and students, all of whom have regularly expressed their rejection through a series of mass rally.

Compared to the initial draft released in early April 2020, which amended a total of 79 laws, the final draft amended a total of 76 laws. Seven laws have been excluded from the initial draft, namely:

Law No. 40 of 1999 on Press;

Law No. 20 of 2003 on National Education;

Law No. 14 of 2005 on Teachers and Lecturers;

Law No. 12 of 2012 on Higher Education;

Law No. 20 of 2013 on Medical Education;

Law No. 4 of 2019 on Midwifery; and

Law No. 20 of 2014 on Standardisation and Conformity Assessment.

On the other hand, the Omnibus Law includes the amendment of four new laws as follows:3

Law No. 6 of 1983, in conjunction with Law No. 16 of 2009 on the General Rules and Guidelines on Taxation;

Law No. 7 of 1983, in conjunction with Law No. 36 of 2008 on Income Tax;

Law No. 8 of 1983, in conjunction with Law No. 42 of 2009 on Value-Added Tax on Goods and Services and Tax of Luxury Goods; and

Law No. 18 of 2017 on the Protection of Migrant Workers in Indonesia.

The Jakarta Post published the practical and useful article "Guide to omnibus bill on job creation: 1,028 pages in 10 minutes"

The full Law 11 of 2020 PDF in Bahasa Indonesia can be downloaded here