Blog Details

During the presentation of new cabinet ministers under Joko Widodo’s second term as President of the Republic of Indonesia on October 23, 2019, the new administration is assigned to continue working on previous priority programs. A concrete bureaucracy reforms remain one of the government’s primary programs in order to boost investments and generate as many employment opportunities as it can.

The government proposes Omnibus bill for two laws, namely job creation and empowerment of micro, small, and medium enterprises (hereinafter shall be referred to as MSME), in order to simplify and strengthen current impediments to investments including complicated system and process to obtain licenses. Omnibus bill or consolidation law is by definition a revision of several or more laws into a single law in order to create a more simplified and targeted procedure. In practice, the application of omnibus bill is intended typically for crucial issues happening in a country and it is considered a more effective and efficient way in the making and revision of the law. In this case, several or dozens of hurdles in each of the aforementioned laws such as access to funding, marketing, and training for MSMEs will be revised in a simultaneous manner. It is worth noting that the government is currently finalizing other omnibus bill for permits and taxation laws, in which the former is targeted to complete at the end of November 2019 and likely to contain issues on job creation and empowerment of MSME as well. Barring any regulatory inconsistency and lack of coordination from different levels of government, the initiative could potentially result in improvement in the bureaucracy at all levels of the government hierarchy from regency or city to province and national, hence provide investors with business certainty.

However, prior to passing this government-initiated omnibus bill into a law, the process must be preceded by decision of People’s Representative Council of Indonesia (hereinafter shall be referred to as “DPR”) to include the two laws in National Legislative Program (hereinafter shall be referred to as “Prolegnas”). Potential barriers may occur before the bill can become a law, primarily regarding competences of DPR to this new law making method since it had never been done before in Indonesia. In addition, dynamics among factions in DPR may become an inhibiting factor in issuing omnibus bill, mainly due to the number of laws that need to be revised that warrant negotiation.