By: A.M Oktarina Counsellor at Law
Drafted by: Baniadhipati Nandiwardhana Pasaribu
Reviewed by: Noverisky Tri Putra Pasaribu, S.H., LL.M (Adv).
In his 2019 inauguration speech, President Joko Widodo elaborate the Indonesian Vision of 2045 with one of the goals is to boost Indonesian Economy and become World 5th Largest Economy. One of the problems that Indonesia are facing is the over-regulation in the Economy and Business sectors which hampering the growth of investment climate in Indonesia. As the solution to solve the over-regulation problem, the Government have already drafting a bills of Omnibus Law Cipta Lapangan Kerja and Perpajakanthese bills will simplify the overlapping laws with the hope to stimulate the economic growth by creating new jobs and increase the ease of doing business ranking. The Coordinating Ministry of Economic Affairs stated that” the Omnibus Law as the strategy of regulatory reform so that the arrangements are done all at once against many regulations.”
According to the Black’s Law Dictionary, Omnibus Bill is a single bill which contains various distinct matter or A bill that deals with all proposals relating to a particular subject. In short, this Law strategy is seen as “the one law to rule them all.” The Omnibus Bill are often applied in a Common Law System state such as the United States, United Kingdom, and Ireland. As retrieved from Hukumonline, the Omnibus Bill was firstly introduced by the United States in 1888 and as of 1967 the Omnibus Bill method was increasingly popular especially when Pierre Trudeau introduce the Criminal Law Amendment Bill. In Southeast Asia, countries such as Malaysia, Singapore, Vietnam, and Cambodia already had stipulates the Omnibus Bill in their respective countries. In Indonesia, similar to any other acts or laws, the legal standing Omnibus Law will be based on the Article 7 Act No. 12 of 2011 and its revision, which stated that in the hierarchy of law, Undang – Undang or Laws are positioned below the Constitution and TAP MPRand above any other regulations. However, the Government intended to use the new Omnibus Law as an Umbrella Act.
The Indonesian government are currently drafting 2 (two) Omnibus Bill that are listed in the Legislative Priority list, the Omnibus Bill of Cipta Lapangan Kerjaor Job Creation willcontain 11 Clusters which are:
As we can analyse, the Omnibus Bill on Job Creation engage in a wide range of clusters, from Employment / Labour Law to Land Acquisition. Further, the Omnibus Bill of Perpajakanor Taxation will contain 6 clusters, which are:
The Omnibus Bill of Taxation, as retrieved from JakartaPost, would amend articles within the Value Added Tax Law, Income Tax Law, General Taxation Law, and Law on Regional Taxation and Retribution, it will lower the corporate income tax from 25% to 20% by 2023 and it will also lower the tax on penalties.These bills will revise 79 laws and 1.244 articles, and the government argues that the bill will solve the over-regulation problems that Indonesia currently facing.
As manifested in the goals of this bill, to improve the investment – ecosystem from abroad as the way to creates more jobs, thus, it will boost the economy. Therefore, this bill is seen as favourable to the Investors or to Potential Investors. For example, in the simplification licencing clusters, the government plans to replace the Licence Based Approach with the Risk Based Approach which make the businesses with high health, safety, and environment risk will be assessed by the government, and the medium risk business will use a standard which will be assessed by a certified professions, lastly, the low risk business will only need to register their business. In the Investment Requirements cluster, the Government will stipulate a Priority List (High Tech Business, Major Investment, Digital Business, and Padat Karya)to push such business to invest in Indonesia.
The Omnibus Bill also steps into a circle of controversy with a lengthy debate among the people, some people finds it beneficial and favourable for the economy but some people are highly criticizing it, especially the Omnibus Bill on Job Creation with some people seen it to be more beneficial to entrepreneurs rather than the labour, therefore, the most controversial cluster within the Omnibus Law on Job Creation is the Labour / Employment cluster. As retrieved from the presentation of the Coordinating Ministry of Economy Affairs, the Government will introduce a new scheme of hourly wage to a certain jobs, such as consultant, part-time workers, and workers in digital industry. Further, the issues that rises some debate are regarding the foreign workers and severance pay. Many labour criticised the new mechanism which makes it easier for an unskilled foreign workers to work in Indonesia, also regarding the new severance pay system that replace the Law No. 13 of 2003 which condemned by many labourers.
From the beginning of the introduction of Omnibus Bill by the United States, the concept and its implementation has brought controversy, some legal scholars finds it as Anti – Democratic and vulnerable to a so called “rider” or a new – unrelated provisions within the laws which according to the Court in Commonwealth v. Bennet (1901) “… and thus coercing the executive to approve obnoxious legislation”In Commonwealth v. Bennet, the US court hold on the opinion that “Bills, popularly called omnibus bills, became a crying evil, not only from the confusion and distraction of the legislative mind by the jumbling together of incongruous subjects, but still more by the facility they afforded to corrupt combinations of minorities with different interests to force the passage of bills with provisions which could never succeed if they stood on their separate merits.”
In conclusion, the newly drafted Omnibus Bill have some pros and cons, it is important for the Government to listen and see the perspective from all stakeholders including entrepreneurs and labours. However, it needs to be acknowledged that there is no law that can satisfy all the stakeholders, but the government still need to create an equilibrium within the newly drafted Omnibus Law in order to protect all the interest of the stakeholders as well as fulfilling the ultimate goal to boost the economy.
 Pidato Presiden RI Pada Sidang Paripurna MPR RI, 20th of October 2020.
Omnibus Law Presentation by Kementrian Koordinator Bidang Perekonomian
 Bryan A. Garner, Black’s Law Dictionary Ninth Edition. Pg. 186.
“Menelusuri Asal-Usul Konsep Omnibus Law.” Hukumonline.com, Hukumonline.com – Berita, 25 Jan. 2020, www.hukumonline.com/berita/baca/lt5e2c1e4de971a/menelusuri-asal-usul-konsep-omnibus-law/?utm_source=dable.
“Ulasan Lengkap : Mengenal Omnibus Law Dan Manfaatnya Dalam Hukum Indonesia.” Hukumonline.com/Klinik, www.hukumonline.com/klinik/detail/ulasan/lt5dc8ee10284ae/mengenal-iomnibus-law-i-dan-manfaatnya-dalam-hukum-indonesia/.
Omnibus Law Presentation by Kementrian Koordinator Bidang Perekonomian
“One Law to Rule Them All: Government to Amend Thousands of Articles Through Omnibus Bills.” The Jakarta Post, www.thejakartapost.com/news/2019/12/13/one-law-to-rule-them-all-government-to-amend-thousands-of-articles-through-omnibus-bills.html.
Commonwealth v. Bennet, 199 Pa. 161 (1901)