Widodo’s jobs bill poses threat to forests, global investors warn Indonesia

In a letter, 35 investors said the legislation could hamper efforts to protect the country’s tropical forests

The government says the bill, passed by parliament on Monday, is needed to streamline regulations in Indonesia

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A demonstrator sets up scarecrows for keeping social distancing during a protest outside the Indonesian parliament against the Omnibus bill in Jakarta last month. Photo: Reuters

Published: 9:37pm, 5 Oct 2020Updated: 9:42pm, 5 Oct 2020

Global investors managing US$4.1 trillion in assets have warned Indonesia’s government that a contentious job creation bill passed by parliament on Monday could pose new risks to the country’s tropical forests.

In a letter, 35 investors expressed their concerns, including Aviva Investors, Legal & General Investment Management, the Church of England Pensions Board, Netherlands-based asset manager Robeco and Japan’s largest asset manager, Sumitomo Mitsui Trust Asset Management.

“While we recognise the necessity for reform of business law in Indonesia we have concerns about the negative impact of certain environmental protection measures affected by the Omnibus Bill on Job Creation,” Peter van der Werf, senior engagement specialist at Robeco, said in a statement.

With President Joko Widodo’s coalition controlling 74 per cent of seats, parliament passed the bill that the government says is needed to improve the investment climate and streamline regulations in Southeast Asia’s biggest economy.

The new law would ensure the “state’s presence” in the relationship between employers and workers, Airlangga Hartarto, chief economics minister, told parliament on Monday.

A coalition of 15 activist groups, including trade unions, earlier condemned the bill and called on workers to join a planned national strike on October 6-8.