JAKARTA, March 21 (Reuters) – Indonesia’s parliament on Tuesday voted to pass President Joko Widodo’s emergency decree to cement rules on investment and jobs in Southeast Asia’s biggest economy, replacing a similar 2020 law that had been ruled partially unconstitutional.

The law, which revises more than 70 other laws, has been praised by foreign investors for streamlining business rules, but also criticised by labour and green groups as being too pro-business.

The changes under the 2020 law include cuts in severance benefits, new minimum wage limits and removing some mandatory paid leave, as well as loosening rules on environmental inspections for investment.

In 2021, the Constitutional Court ruled the passage of the law was flawed due to inadequate public consultation and ordered a renewed debate process in parliament within two years.

Tuesday’s passage of the decree meant most of the changes brought about by the law would stay, with some small changes on labour rules.

Some legal experts have criticised the decree as a government ploy to bypass the court’s order, but government officials have said the decree was needed to ensure legal certainty after the court’s decision.

Experts have also questioned the use of the decree, officially known as a government regulation in lieu of law, especially after parliament delayed its vote by more than a month.

Under Indonesia’s constitution, a president is only supposed to use such a decree to address an emergency and parliament is supposed to vote on it in the first sitting after its issuance.

Jokowi, as the president is popularly known, issued the jobs decree in December, arguing that ongoing global economic uncertainty gave him the legal basis to exercise executive authority, but parliament failed to bring it to a wider vote before going into recess in February.

Two out of nine parties in parliament opposed the decree during the plenary session, with members of the opposition Islamist party, the Prosperous Justice Party, walking out before speaker Puan Maharani announced the vote had been passed.

The Labour Party, which currently has no seat in parliament but plans to contest the 2024 elections, intends to hold a rally to protest the passage of the decree later on Tuesday.

Reporting by Stefanno Sulaiman and Stanley Widianto;
Writing by Gayatri Suroyo
Editing by Ed Davies

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