UGM Business Law Professor: Perppu Ciptaker could make a better National Investment Climate
Jakarta — The issuance of a Government Regulation in lieu of a Job Creation Law (Perppu) is considered capable of reviving the national investment climate after experiencing a legal vacuum due to the Constitutional Court (MK) Decision regarding the previous Ciptaker Law.
Professor of Business Law at Gadjah Mada University (UGM), Prof. Nindyo Pramono explained that in fact the existence of the Job Creation Law had made the current investment climate positive.
“Data from the IMF, World Bank and Indonesian Economic Prospects show that the presence of the Ciptaker Law has indeed provided a positive climate for investment flows, especially foreign direct investment,” he said.
Not without reason, the article is that the increase in investment in the country has occurred due to trimming of the licensing mechanism which has been stipulated in the Job Creation Law.
Thus, with the trimming and simplification of these permits, entrepreneurs and investors no longer feel difficulties in terms of licensing.
“The purpose of the Job Creation Law includes improving the investment ecosystem, trimming the licensing mechanism with an online single submission, actually the aim is to cut the licensing routes that used to be felt convoluted by investors,” added Prof. Nindyo.
The existence of the Job Creation Law has also helped to improve the national economy, even though it was only valid for 2 years before it was finally suspended by the Constitutional Court’s Decision and deemed conditionally unconstitutional.
Proven, according to Prof. Nindyo Pramono that there has been an increase in investment in Indonesia from 2015 to 2019 even though it is still lagging behind neighboring countries.
“Looking at data from Bloomberg and the World Investment Report, indeed from 2015 to 2019 there has been an increase in our investment, but the increase in Indonesia’s investment climate is still behind that of neighboring countries, Singapore, Malaysia, Thailand and Vietnam,” he explained on Thursday (9/2).
In an interview session on one of these television stations, the UGM professor also added that what the Constitutional Court was actually questioning was only the procedural side and not the substance in the Job Creation Law.
“From a procedural point of view, the Ciptaker Law was declared conditionally unconstitutional, meaning that the Ciptaker Law was contrary to the 1945 Constitution as long as within 2 years no changes were made to procedures alone, the substance was not questioned,” he said.
Then, within the timeframe given by the Constitutional Court, the Government of Indonesia finally made improvements by issuing a Job Creation Perppu which has become the authority of President Jokowi.
Of course, the formation of Perppu Number 2 of 2022 concerning Job Creation was also carried out by the government in order to anticipate a crisis.
“The Perppu on Job Creation cannot be separated from a juridical basis because of a pressing emergency. Indeed, the President has the authority to issue a Perppu if there is a pressing emergency,” explained Prof. Nindyo.
Furthermore, according to him, the crisis that enveloped the country is related to the crisis situation and also the existence of a legal vacuum left by the previous Ciptaker Law.
“Some of the parameters are a crisis situation, there is an urgent need for legislation that is indeed empty so as to fill the void, then related to the global crisis which has affected the national crisis,” he said.
