Indonesia’s Stimulus Plan Draws Fire From Environmentalists and Unions

Critics say the sweeping measure near passage in Parliament would lead to greater deforestation and the loss of worker protections.

President Joko Widodo backs the omnibus bill as a way to attract investment and stimulate the creation of new jobs.
President Joko Widodo backs the omnibus bill as a way to attract investment and stimulate the creation of new jobs.Credit…Agus Suparto/Indonesian Presidential Palace, via Associated Press

By Richard C. Paddock and Muktita Suhartono

BANGKOK — Indonesia’s Parliament is on the verge of approving a sweeping coronavirus stimulus package that opponents charge would undermine worker protections and permit widespread destruction of the country’s rainforests.

The legislation is backed by Indonesia’s president, Joko Widodo, and is seen as a way to attract investment and stimulate the creation of new jobs by reducing regulations on businesses. Its supporters hope to win passage before Parliament ends its session next Friday, even as opposition to the measure grows.

A confederation of labor unions is calling for a three-day national strike starting on Tuesday over provisions in the bill that would reduce job security, wages and mandatory days off. Union leaders say the strike has the backing of five million workers from dozens of industries.

Environmentalists oppose the measure because it would eliminate environmental reviews for many new projects and could lead to the destruction of primary rainforests that are essential in controlling carbon emissions and slowing climate change.

“The government is pursuing this policy as if they were completely deaf and blind to the effect on people by the emerging climate crisis,” said Phelim Kine, senior director for Asia at Mighty Earth, a global environmental campaign organization. “This is the Indonesian equivalent of ‘Drill, baby, drill.’”

Branded as an “omnibus bill,” the legislation is 1,028 pages long and would amend 79 laws and more than 1,200 articles. Supporters say it would improve Indonesia’s investment process by speeding regulatory approval and eliminating many permit requirements.

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“This is the key to facilitate investment, especially in terms of simplifying permits,” said Luhut Pandjaitan, a top cabinet minister whose portfolio includes investment.

Indonesia, the world’s fourth-most-populous country, has been hit hard by the coronavirus, which has pummeled the economy and threatens to overwhelm the country’s beleaguered health care system.

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The government was slow to adopt coronavirus restrictions this year, then quick to lift them in the hope of reviving the economy. Now, the country is nearing 300,000 confirmed cases, and its death toll — nearly 11,000 — is the highest in East Asia. Jakarta, the capital, has imposed a partial shutdown for the second time.

Indonesia’s economy is expected to contract this year for the first time since the Asian economic crisis of the late 1990s. The finance minister, Sri Mulyani Indrawati, has forecast a decline in the gross domestic product of as much as 1.7 percent this year.

Officials fear that the economic downturn — along with the closing of schools as a pandemic measure — will reverse the country’s recent gains in reducing poverty, improving nutrition and raising education levels.

Mr. Joko, in his second five-year term, has made economic development the focus of his presidency, often overshadowing other concerns.

The effort to push this bill through Parliament has given his critics a sense of déjà vu.

A year ago, as Parliament neared the end of its session, lawmakers attempted to push through legislation that would have sharply reduced personal freedom, including limiting free speech and prohibiting sex outside marriage, effectively banning gay and lesbian relations.

Thousands took to the streets in protest around the country, and five died in clashes with the police. Mr. Joko withdrew the measure, although he refused to block another contentious bill that weakened the country’s anticorruption agency.

This year, despite coronavirus restrictions making it harder to stage protests, labor organizers said they planned to demonstrate outside Parliament and invited students, environmentalists and other opponents of the measure to join.

The labor coalition supports the idea of job creation but argues that the omnibus bill would harm workers by reducing severance pay for those laid off, cutting the amount of mandatory leave, allowing longer work hours and permitting the hiring of contract and part-time workers to take the place of full-time employees.

“The fact is that the omnibus law reduces labor rights in the existing law,” said Said Iqbal, president of the Indonesian Trade Union Confederation and a leader of the planned strike.

Indonesia, which straddles the Equator and once had vast rainforests, has lost much of its forest cover to intentional burning that has been used for decades to clear land for palm oil plantations.

Forest fires occur every year and produce huge volumes of smoke that drift over neighboring Singapore and Malaysia and into the atmosphere, contributing to global warming. Environmentalists say that the government has made some progress in recent years in reducing the amount of burning, but that restrictions now in place would be reversed by the omnibus bill.

Especially vulnerable, they say, are four provinces in Sumatra and another on Java that still have intact primary forest and serve as natural carbon sinks that help protect against climate change.

Asep Komarudin, senior forest campaigner for Greenpeace in Indonesia, said the measure would gut forest protection, including by eliminating public input in the permit process and repealing laws that the government uses to sue companies for illegal burning on their land.

He noted that these provisions were drafted in the interest of corporations long before the pandemic and had nothing to do with the coronavirus.

“The government is offering investment by eliminating all the safety nets, meaning that everything has been put on sale,” he said.

Defenders of the measure say that the current environmental requirements would not be eliminated for large projects, just for smaller ones.

“If the business field poses low risks, then there would be no need for a permit,” said Ihsan Zulkarnaen, an official at the coordinating ministry for the economy. “They would only need to register.”

But critics said the lack of safeguards and the reduction in environmental protections could make foreign investors — especially those from Europe, where environmental standards are high — less interested in putting money in Indonesia.

“This is very damaging for our forest and for our environment,” Mr. Asep, of Greenpeace in Indonesia, said. If the bill passes, “all the effort to work on climate change and preventing deforestation will be futile.”More About IndonesiaWhen Learning Is Really Remote: Students Climb Trees and Travel Miles for a Cell SignalSept. 5, 2020As Amazon Smolders, Indonesia Fires Choke the Other Side of the WorldSept. 17, 2019Thousands in Indonesia Protest Bills to Limit Rights and Ban Extramarital SexSept. 30, 2019

Richard C. Paddock has worked as a foreign correspondent in 50 countries on five continents with postings in Moscow, Jakarta, Singapore and Bangkok. He has spent nearly a dozen years reporting on Southeast Asia, which he has covered since 2016 as a contributor to The New York Times. @RCPaddock

Muktita Suhartono reports for The New York Times in Indonesia and Thailand. She joined The Times in 2018 and is based in Bangkok.