The Constitutional Court’s Decision on the Job Creation Act does not affect the ease of investment in Indonesia
By: Edi Jatmiko )*
The Constitutional Court (MK) has determined that Law Number 11 of 2020 concerning Job Creation (Cipta Kerja) requires revision or improvements. However, this decision will not affect the ease of investment in Indonesia.
Deputy Chairperson of the Indonesian Chamber of Commerce (KADIN) for Regional Autonomy Development Sarman Simanjorang said employers respect the Constitutional Court’s decision on the Judicial Review of Law Number 11 of 2020 concerning Job Creation or the Job Creation Act.
One of the decisions of the Constitutional Court stated that the regulation was conditionally unconstitutional and the government and the DPR were given up to two years to revise the law. However, Sarman believes that the Constitutional Court’s decision will not affect the business world or investment realization.
So far, the government has issued 45 government regulations (PP) that technically regulate the ease of business licensing. President Joko Widodo (Jokowi) also issued four presidential regulations as derivatives of the Omnibus Law.
All of these derived rules support the business world. He believes that this derivative policy will remain in effect so that the business and investment climate remains conducive. The Job Creation Law was passed in 2020 using the omnibus law method and taking into account the content and substance that must be changed in the Job Creation Act and reached 78 laws.
This includes 10 clusters, namely improving the investment ecosystem and business activities, employment, convenience, protection and empowerment of cooperatives and MSMEs, ease of doing business, research and innovation support, land acquisition, economic zones, central government investment and acceleration of national strategic projects, administrative implementation. governance and imposition of sanctions.
Although the Constitutional Court ruled that the Job Creation Act was unconstitutional, the Central Java Provincial Government (Pemprov) continued to improve the ease of processing various investment permits as an effort to boost economic growth in 2022.
Sumarno as the Regional Secretary of Central Java said that related to licensing for investors it must be made easier, even the Central Java Provincial Government has also prepared facilitation of assistance and a licensing support system. It will also make it easier for business actors to take care of licensing in investing.
Sumarno explained that the government’s task in facilitating investment licensing is an important part so that in this case the government can help by simplifying and accelerating the licensing process so that it becomes more effective and efficient.
The Central Java Provincial Government will also maximize special economic zones, integrated industrial areas and several other industrial areas to facilitate potential investors from within and outside the country.
With the high number of investors investing, it is hoped that it will boost the regional economy, reduce unemployment, create jobs and reduce poverty in Central Java.
In addition, in order to increase exports of Central Java products, the provincial government continues to work hard to build synergies with stakeholders such as the central government, district/city governments, as well as small and medium enterprises.
On a different occasion, the Minister of Investment/Head of the Investment Coordinating Board (BKPM) Bahlil Lahadalia believes that the investment realization target in 2022 of IDR 1,200 can be achieved.
With a record economic growth can reach above 5%. Efforts to encourage economic growth are carried out in line with health policies in handling the Covid-19 pandemic.
Of course, it is impossible for the government to fully create job opportunities. The government facilitates the business world to create jobs. The government has issued a job creation law that provides easy licensing for entrepreneurs in starting a business.
The government is also encouraging the entrepreneurship ratio, which is currently only 3.6%. The government targets to achieve an entrepreneurial ratio of up to 3.95% by the end of 2024. When compared to neighboring countries, this figure is of course still small because Malaysia and Thailand have an entrepreneurial ratio of 4.5% while Singapore has reached 8.7%. .
Bahlil also revealed that his party would facilitate licensing in order to speed up friends becoming the business world. We must encourage investors both inside and outside to execute their investment plans.
This shows that although the Constitutional Court has decided that the Job Creation Law is conditionally unconstitutional, the government still has efforts to make it easier for investors to invest in Indonesia, so that this effort is expected to open new businesses and create job opportunities.
)* The author is a contributor to the Press Circle and Cikini Students
