The Government’s experts taking oath before testifying at the formal judicial review hearing of the Job Creation Law, Wednesday (8/23/2023). Photo by Humas MK/Ifa.
JAKARTA (MKRI) — Government Regulation in Lieu of Law (Perppu) No. 2 of 2022 on Job Creation has become an indicator for the compelling crisis situation due to global stagflation, said business law professor of Universitas Gadjah Mada Pramono Nindyo at a formal judicial review hearing of Law No. 6 of 2023 on the Stipulation of Government Regulation in Lieu of Law (Perppu) No. 2 of 2022 on Job Creation into Law.
The sixth hearing for case No. 54/PUU-XXI/2023, scheduled to hear the president/Government’s experts in the case filed by fifteen workers’ unions or federations, took place on Wednesday, August 23, 2023 in the plenary courtroom. Muhammadiyah University of Jakarta’s law professor Ibnu Sina Chandranegara, Borobudur University law lecturer Ahmad Redi, and vice president director of PT Bank Mandiri Tbk Dendi Ramdani also presented their expert testimonies.
In his testimony, Pramono Nindyo said the compelling crisis situation that compelled the issuance of the Job Creation Law, which was initiated by the issuance of Perppu No. 2 of 2022, can be observed from the economic aspect, as an anticipatory move, and in relation to business permits in Indonesia before and after the Job Creation Law was enacted. He said that a perppu is parallel to a law and is issued by the president amid a compelling crisis situation. This, he said, is not to be debated as the considerations for perppu has been stipulated in the Constitution and it is within the president’s jurisdiction.
He revealed that several perppus had not been issued under a compelling crisis situation, such as Perppu No. of 1998 on Bankruptcy, which was issued close to the 1998-1999 monetary crisis. It did not explicitly state the meaning of “a compelling crisis situation.” In essence, the perppu was enacted amid a crisis with considerations for the economy at a time when the Government spent a bailout fund of 600 T rupiahs despite no reference of any declaration of state of emergency.
“The Government-issued Perppu No. 2 of 2022 did not expressly declares the state in a compelling crisis situation. This is related to the Job Creation Law that—after being declared conditionally unconstitutional by the Constitutional Court was then revised by Perppu No. 2 of 2022 and on March 31, 2023 was stipulated into Law No. 6 of 2023—was the Government’s anticipatory move despite no crisis. The considerations were economy-driven and aimed at avoiding a crisis that the state underwent in 1997, 1998, and 2008 where we faced a never-ending situation,” Pramono said.
Anticipatory Action
Pramono also believes the formation of the Job Creation Law was an anticipatory action to prevent a crisis in Indonesia. The considerations fully concern economy and economic law. It was also the Government’s good faith and wise step to improving investment climate towards Golden Indonesia in 2045 that will be enjoyed by the nation’s future generations. He also said the Government has made reforms to the licensing system for businesses, said to be complicated and having reduced investment interest in Indonesia, to answer questions from domestic and foreign investors. The Government created a risk-based system by through simplification and improvement.
“The formation of the perppu should be responded wisely and it is an anticipatory step against global stagnation impacts. The Job Creation Law is a futuristic law that positively impacts the investment climate and help employment. Let it work according to its purpose and function, but inputs and evaluation remains necessary. Criticism is not needed yet now because it has just been enacted,” Pramono concluded.
Accelerating Economic Growth
Next, Dendi Ramdani asserted that especially in 2020-2022, Indonesia was racing with time due to the economic crisis caused by COVID-19. It is also facing the threat of an aging population while having to compete with neighboring countries for investment. For Dendi, the Job Creation Law is an important breakthrough in Indonesia’s economic history. It is even alleged that Indonesian must race against time to become a high-income country in less than 17 years.
“The target per capita income is 13,845 dollars and it must be achieved before 2040, while currently Indonesia only has a per capita income of 4,580 dollars (according to 2022 data). So, now until 2040 is a golden opportunity to accelerate economic growth. The working age population is larger, but it will reverse in 2040, so it has set a deadline for Indonesia. To achieve the targeted per capita income, economic growth of 6.3% per year must be pursued. Based on experience in other countries in the world, failure to achieve this will cause the country to enter the trap of middle-income and low economic growth, for example what happened in Brazil and Africa. So the issuance of this Job Creation Law is to avoid that trap,” Dendi explained.
Ibnu Sina Chandranegara said that the Job Creation Law’s issuance can be seen from the law doctrine that is synonym to compliance with or resistance to the Constitution. Meanwhile, Ahmad Redi talked about his view on the meaning of “the next session” in Article 22 paragraph (2) of the 1945 Constitution, the interpretation and implementation of “a compelling crisis situation” relating to the stipulation of a perppu into a law, and the relation between the appendix of the Job Creation Law and the Constitutional Court Decision No. 91/PUU-XVIII/2020.
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At a preliminary hearing on Wednesday, May 31, the Petitioners argued that the formation of the Job Creation Law must have complied with the Lawmaking Law. They believe that the Job Creation Law is formally flawed because it—formerly the Job Creation Perppu—was ratified during a recess. They found a legal fact that the perppu, which was the precursor to the Job Creation Law, was stipulated on December 30, 2022—during the recess period of the House of Representatives (DPR). This, they claim, is a real violation of Article 22 of the 1945 Constitution and Article 52 paragraph (1) of the Lawmaking Law.
In addition, in their petition, the Petitioners explained that fear of the impact of global economic crisis on Indonesia’s economy did not justify any claim that there had been a compelling crisis situation that required the issuance of a perppu. They also asserted that there had been no legal vacuum to address since the existing Law was still able to address legal issues in society. Lastly, the regulation was a form of contempt of the Constitutional Court and was a bad precedent on the part of the President that set an example if disobedience
Author : Sri Pujianti
Editor : Lulu Anjarsari P.
PR : Tiara Agustina
Translator : Yuniar Widiastuti (NL)
Disclaimer: The original version of the news is in Indonesian. In case of any differences between the English and the Indonesian versions, the Indonesian version will prevail.
Wednesday, August 23, 2023 | 15:55 WIB 610