Thousands of Indonesian trade unions confederation protest against government omnibus law that plans to hand over its draft to the parliament this week - Photo by Insider Stories.

JAKARTA (TheInsiderStories) – Thousands of Indonesian trade unions confederation gather outside the House of Representative office on Monday (01/20) to protest against government omnibus law that plans to hand over its draft to the parliament this week. The workers specifically reject the draft law on labor issues and health insurance fees.

Unions President Said Iqbal revealed six reasons they reject planned changes to labor laws. The new law, he said, will eliminate minimum wages for workers. The introduction of hourly wages will result in the minimum wage being degenerated or even lost.

Then, the law would result in loss of severance pay; freeing contract workers and outsourcing; facilitating the entry of foreign workers; eliminating social security; and eliminating criminal sanctions for employers, Iqbal adds.

“We urge the parliament to cancel the omnibus law on labor issues and health insurance fees. The planned law is pro-business. It makes the future of workers, prospective workers who will enter the workforce without protection,” Iqbal shouted.

Iqbal pledged the workers would hold a bigger rally if the demand to cancel the increase health insurance fees, especially the third class, was not carried out.

The contributions will be increased starting this month. First-class contributions will increase from Rp80,000 (US$5.71) to Rp160,000 per month, second class raise from Rp51,000 to Rp110,000 per month. And the third class is planned to increase from Rp25,500 to Rp42,000 per month.

President Joko Widodo has said the new legislation is vital to boost investment and create jobs and hopes parliament will pass it within 100 days. The new bills will try to simplify rules in a wide range of areas, including investment requirements, research, and innovation, as well as more sensitive issues such as labor and land acquisition rules.

The bill will cover 79 laws, comprising over 1,200 clauses, and aims to streamline business permits, investment requirements and labor laws, said Susiwijono Moegiarso, secretary of the Coordinating Ministry of Economic Affairs in a press conference over the weekend.

Moegiarso said the world’s fourth-most populous country needed to create 9 million jobs per year, requiring much higher investment. It will simplify permit processes covering 15 sectors including manufacturing, agriculture, energy, and mining, as well as environmental permits and construction.

“The government wants to create a conducive business climate. The omnibus law draft will be submitted to parliament starting Monday. We are finalizing the details, but the substance is all clear.” he said.

Coordinating Economic Minister Airlangga Hartarto earlier has said the government will also remove a negative investment list which broadly aims to reduce current account deficit, improve financial stability, and stimulate growth. In its place, the government will issue a positive investment list.

The new policies will focus on restraining imports and expanding exports as well as boosting foreign investments in the country. As such, the measures will include tax incentives to attract foreign direct investment (FDI) and the opening up of several market sectors to foreign investment, Hartarto said.

Written by Lexy Nantu, Email: lexy@theinsiderstories.com