President Joko Widodo delivered a press statement regarding the Job Creation Law, Friday (9/10//2020)

President Joko Widodo delivered a press statement regarding the Job Creation Law, Friday (9/10//2020) afternoon, at the Bogor Presidential Palace.

Peace be upon you, and Allah's mercy and blessings.

Ladies and Gentlemen, This morning I chaired a virtual Limited Meeting on the Job Creation Law with government officials and the governors.

In this Law, there are eleven clusters that generally aim to carry out structural reforms and accelerate economic transformation. The clusters are: matters of simplification of licensing, matters of investment requirements, manpower affairs, affairs of land acquisition, matters of business convenience, affairs of research and innovation support, affairs of government administration, affairs of imposition of sanctions, matters of ease of empowerment and protection of MSMEs, matters of investment and government projects , as well as economic area affairs.

In the Limited Meeting I emphasized why we need a Job Creation Law.

      President Joko Widodo delivered a press statement regarding the Job Creation Law, Friday (9/10//2020) afternoon, at the Bogor Presidential Palace.

First , every year there are around 2.9 million people of new working age, young people enter the labor market. So that the need for new jobs is very, very urgent. Especially in the midst of the pandemic (Covid-19), there are approximately 6.9 million unemployed and 3.5 million workers affected by the Covid-19 pandemic. And around 87 percent of the total working population has an education level of Senior High School and below, of which 39 percent have primary school education. So it is necessary to encourage the creation of new jobs, especially in labor-intensive sectors. So the Job Creation Act aims to provide as many jobs as possible for job seekers and unemployed people.

Second, with the Job Creation Act, it will make it easier for people, especially micro and small businesses to open new businesses. Overlapping regulations and complex procedures were trimmed. Business licensing for micro and small enterprises (UMK) is no longer needed, only registration. Very simple. The formation of a PT or limited liability company is also facilitated, there is no longer a minimum capital limitation. The formation of cooperatives has also been made easier, with only nine cooperatives being formed. We hope that there will be more cooperatives in the country. UMK (micro and small enterprises) engaged in the food and beverage sector, halal certification is funded by the government, meaning free. A fishing boat license for fishing, for instance, only goes to the work unit of the Ministry of KKP. If we previously had to submit to the Ministry of KKP, Ministry of Transportation,and other agencies, currently it is sufficient from the units in the Ministry of KKP.

Third , this Job Creation Law will support efforts to prevent and eradicate corruption. This is clear because by simplifying, by cutting, by integrating into the licensing system electronically, illegal levies (pungli) can be eliminated.

However, I saw demonstrations against the Job Creation Law which were basically motivated by disinformation regarding the substance of this Law and hoaxes on social media.

For instance, there is information that mentions the elimination of the UMP (Provincial Minimum Wage), UMK (City / Regency Minimum Wage), UMSP (Provincial Sectoral Minimum Wage). This is not true, due to the fact that the Regional Minimum Wage (UMR) still exists.

There is also a mention that the minimum wage is calculated on an hourly basis. This is also not true, nothing has changed with the current system. Wages can be calculated based on time and based on results.

Then there was news that all leave: sick leave, marriage leave, circumcision leave, baptism leave, death leave, maternity leave had been abolished and there was no compensation. I also emphasize that this is not true, the right to leave remains and is guaranteed.

Then can the company workers be unilaterally laid off anytime? This is also not true, it is true that companies cannot unilaterally lay off workers.

Then also the question about whether social security and other welfare are missing? The truth is, social security still exists.

What is also often reported incorrectly is the elimination of amdal (analysis of environmental impacts). That is also not true. Amdal still exists. For large industries, a rigorous Amdal study must be carried out, but for MSMEs, the emphasis is more on mentoring and supervision.

There is also news about this Job Creation Law encouraging the commercialization of education. This is also not true, because what is regulated is only formal education in Special Economic Zones, in KEK, while education licensing is not regulated in this Job Creation Law. Moreover, licensing for education in Islamic boarding schools is not regulated at all in this Job Creation Law and its existing regulations remain in effect.

Then it was reported that there was a land bank. This land bank is needed to ensure public interest, social interest, national development interest, economic equality, and land consolidation, as well as agrarian reform. This is very important to ensure community access to land ownership, land ownership, and so far we do not have a land bank.

I also emphasize that this Job Creation Law does not carry out a recentralization of authority from the regional government to the central government, no. There is no. Business licensing and supervision are still carried out by local governments in accordance with the NSPK (Norms, Standards, Procedures and Criteria) established by the central government. This is in order to create good service standards in all regions. And the determination of this NSPK can later be regulated in PP or government regulations.

In addition, the licensing authority for business non-licensing remains with the regional government so that nothing changes. In fact, we simplify it, standardize the types and procedures of doing business in the regions and business permits in the regions are given a time limit. This is what's important here. So there is a service level of agreement, the permit application is considered approved when the time limit has passed.

I need to reiterate that the Job Creation Law needs a lot of government regulations and presidential regulations. So, afterwards, there will be government regulations and presidential regulations which will be completed three months at the latest after the law is passed. The Government invites the public to provide insights. And It is still open for suggestions and inputs from the regions. The Government believes that through the Job Creation Law, millions of workers can improve their lives and also the livelihoods for their families. And if there is still dissatisfaction with the Job Creation Law, please file a judicial review with the Constitutional Court (MK). It is regulated in our constitutional system. So, once again, those who are not satisfied with and opposed to the Job Creation Law may file a judicial review at the Constitutional Court.

I think that is all I can convey on this good opportunity.

Thank you.

President Joko Widodo

Wassalamualaikum warahmatullahi wabarakatuh