Why Indonesian workers should be concerned about the Omnibus Bill

With Indonesia's controversial and sweeping pro-investment Omnibus Bill set to be passed this year, researchers at Amnesty International Indonesia explain why workers should be concerned about the legislation's finer details

Dominique Virgil and Rahma Safira
July 9, 2020
Why Indonesian workers should be concerned about the Omnibus Bill
Indonesian workers march towards the parliament building during a protest against a government omnibus bill on job creation in Jakarta on January 13. Photo: Adek Berry/AFP

With a final draft submitted to the House of Representatives in February, the controversial “Omnibus Bill” of the government of President Joko Widodo claims to bring wide-ranging reforms that will make it easier to do business in Indonesia and attract investment, boosting jobs in the process.

But when it comes to human rights and the rights of workers, the 1,028-page document, set to be approved this year, will not improve the legal protections. Instead, it will weaken protections for workers in Indonesia.

Palm oil workers are particularly at risk. According to the World Bank report, the palm oil industry in Indonesia is a key player in the national economy – its exports contributed 3.5% of the national GDP in 2018. It creates 17 million jobs for communities and smallholder farmers in Indonesia, with four million of them highly dependent on this industry to sustain their livelihoods. In other words, it has become a cornerstone of economic development and job creation. 

However, for workers in Indonesia, especially in the palm oil sector, the draft Omnibus Bill, currently being discussed in parliament, takes away the safety net and weakens their labour protections. 

Currently as per Indonesian law, a temporary worker who is in continuous employment for more than two years with one year of prolongation, will be deemed a permanent worker and will enjoy all the benefits available to permanent workers. The Omnibus Bill proposes to revoke this protection and as a result will deny temporary workers across Indonesia to gain permanent status after two years of service and one year of prolongation. Denial of this opportunity means denial of job security and social security benefits such as pensions and severance pay   

In practice, not all companies actually abide by these provisions. Palm oil plantations often continue to keep temporary workers in their current employment status, including daily labourers (Pekerja Harian Lepas/PHL), and not all companies, including palm oil companies have taken measures to make their temporary workers permanent, according to reports from various trade unions and civil-society organisations. 

The Omnibus Bill– if enacted in its current form – will make this legitimate and therefore worsen conditions of work.  

The draft bill also provides for some sectors to allow people to work for more than 40 hours a week or eight hours per day, which is the current limit set by existing legislation. The number of additional hours per day and per week is proposed to be determined by employers. 

The sectors that will implement this provision will be further elaborated in the Government Regulation since the bill does not specify them. It is concerned that palm oil will be one of the sectors whose workers are allowed to work more than the current limit, while palm oil workers are already known to work long hours each day to meet their targets, even asking their family members to help them, according to the 2016 Amnesty International report, Great Palm Oil Scandal. Again, changing the law to allow companies to unilaterally set the working hours will lead to further abuse.

Currently minimum wages in Indonesia are set at the city or regencies and province level, thereby taking into consideration the higher cost of living in some cities or regencies. The Omnibus bill scraps the city-level determination of minimum wage (UMK), meaning that the lower, provincial wage (UMP) would be the new nationwide standard. 

Without important revisions, the Omnibus Bill will take Indonesia backwards and damage workers’ rights

As a result, there is concern that the minimum wages of workers in cities will fall and will not be sufficient to meet the cost of living in areas with higher living cost. As for palm oil workers, it is also concerned that they will earn less than their current wage which is not sufficient to cover their basic daily needs.

Under existing legislation, palm oil workers are entitled to their own determined minimal wage, which is higher than the UMK. It is unclear whether the Omnibus Bill will scrap this too. 

The International Covenant on Economic, Social, Cultural Rights (ICESCR), which Indonesia has ratified, includes the right to just and favourable conditions at work. This right includes important elements, such as fair wages that provide a decent standard of living; equal remuneration for work of equal value; safe and healthy working conditions; rest, leisure, reasonable limitation of working hours; and periodic holidays with pay; as well as remuneration for public holidays. 

As a state party to ICESCR, Indonesia must comply with its obligations under international treaties to protect workers’ rights and provide decent work to its people – and not introduce any regressive laws that will result in weakening protections of workers’ rights.

The proposed Omnibus Bill must meet these international human rights standards, and currently fails to do so. Without important revisions, the Omnibus Bill will take Indonesia backwards and damage workers’ rights. Millions of workers in Indonesia, including palm oil workers, deserve safe and healthy work conditions, a decent wage and protection from exploitation.

Dominique Virgil is a researcher in Amnesty International Indonesia. Rahma Safira is a research intern in Amnesty International Indonesia.

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