In brief

On 2 November 2020, the President signed into law the job creation law (commonly known as the "Omnibus Law").  The aim of the Omnibus Law is to attract investment, create new jobs, and stimulate the economy by, among other things, simplifying the licensing process and harmonizing various laws and regulations, and making policy decisions faster for the central government to respond to global or other changes or challenges.

The final version of the Omnibus Law consists of 1,187 pages, which is the longest law ever issued by the Government of Indonesia. The Omnibus Law is a breakthrough in itself as it amends or revokes a total 78 laws, and covers 27 topics and sectors. 

After the Parliament approved the draft Omnibus Law on 5 October 2020, we issued 21 client alerts on the key amendments and provisions introduced by the Omnibus Law in selected sectors and topics. Except for the environment and forestry alert, the analysis we provided in those alerts remains unchanged although there are several differences due to formatting and editorial changes. Please click here to access the alerts. We will issue a separate client alert providing an update on the impact of the Omnibus Law on the environment and forestry sectors.

The changes introduced by the Omnibus Law have also stirred dissatisfaction of certain stakeholders. For example several labor unions have expressed that the changes under the employment cluster of the Omnibus Law would disadvantage employees. Also, the Confederation of Labor Unions (Konfederasi Serikat Pekerja Indonesia) has submitted a judicial review on the provisions of the Omnibus Law to the Constitution Court. However, the proceedings have not yet commenced.  

Key planning items

The Omnibus Law requires the Government to issue implementing regulations within three months after 2 November 2020 in order to implement the relevant provisions under the Omnibus Law. The Government has created a specific website to provide drafts of implementing regulations for public dissemination, as follows: As of 23 November 2020, there are 27 drafts of government regulations and three drafts of presidential decrees. Several drafts have not been made available on the website. For example, there are still no drafts of the government regulations or the presidential decree on the priority list that will replace the current negative list, or of the government regulation detailing the new licensing regime.  

To better understand how the Omnibus Law is going to be implemented by the Government, readers are encouraged to look at those drafts and monitor developments, including the changes made to those drafts by the Government. We note that some drafts have been updated several times since they were first uploaded.