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With growth in Southeast Asia's biggest economy having been
stuck at around 5% for several years, President Joko Widodo has
said the new legislation is vital to boost investment and create
jobs.
The bill will cover 79 laws, comprising over 1,200 clauses, and
aims to streamline businesses permits, investment requirements
and labor laws, said Susiwijono Moegiarso, secretary of the
Coordinating Ministry of Economic Affairs.
Widodo, who started his second term in October, hopes parliament
will pass it within 100 days.
Moegiarso said the world's fourth-most populous country needed
to create 9 million jobs per year, requiring much higher
investment. "The government wants to create a conducive business
climate," he said.
"The 'omnibus' law draft will be submitted to parliament on
Monday. We are finalizing the details, but the substance is all
clear."
It will simplify permit processes covering 15 sectors including
manufacturing, agriculture, energy and mining, as well as
environmental permits and construction, according to a ministry
presentation.
The government will also remove a "negative investment list"
that restricts foreign ownership in some areas. It will still
set ownership limits in certain industries, said ministry
official Elen Setiadi, but the cap will be determined by a
regulation that will be easier than a law for the government to
change.
On labor issues, the government will adjust parameters
determining minimum wages to take into account economic
conditions of different regions.
Previous governments have struggled to reform employment laws
and unions are planning protests next week to oppose a bill they
view as "pro-business".
Moegiarso denied the new law would curb labor rights.
In the mining sector, the government plans incentives for
downstream investors. These could include an extension of
permits for as long as a mine's lifespan, according to the
presentation material.
The government may also remove coal miners' royalty charges and
rules on mandatory sales to power plants if a miner invests in a
coal gasification plant, the documents showed.
(Writing by Fransiska Nangoy; Editing by Ed Davies and John
Stonestreet)
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