Architecture of Indonesia’s ultimate umbrella law

29 October 2020

As the first of a series of articles, this article introduces and provides a brief overview of the overall structure of the Indonesia Job Creation Bill, commonly known as the Omnibus Law on Job Creation (“Omnibus Law”) that was approved by Indonesia’s House of Representatives (“DPR”) on 5 October 2020. This article is prepared based on an informal draft of the final Omnibus Law that was widely circulated on 13 October 2020.

By approving the Omnibus Law, the DPR has passed one of the most significant and diverse laws in Indonesia’s history. The informal title “omnibus” refers to the Latin word of the same name, which translates to “for all”, which is fitting as the Omnibus Law simultaneously impacts almost 80 different laws. Although it is a quite an ambitious piece of umbrella legislation, the Indonesia Government still has much work to draft and pass the many implementing regulations contemplated throughout the Omnibus Law. Without the implementing regulations, there is considerable speculation as to the practical implementation of the myriad changes set out for so many laws.

The objective of the Omnibus Law is to boost domestic growth and investment, mainly by “simplifying” and removing various steps and procedures that were involved in obtaining business licences, streamlining inter-government bureaucracy, making industrial relations matters more employer-friendly and creating more jobs along the way.

This is an extract of an article by Soemadipradja & Taher, an Indonesian law firm with which Allen & Gledhill has a strategic alliance. To read the full article from the Soemadipradja & Taher website www.soemath.com, please click here.