Constitutional Court orders revisions of Omnibus law, but two-year grace period allows room for more exploitation

6 Dec 2021

On 25 November Indonesia’s Constitutional Court issued an order to the Government and parliament to change parts of the ‘Omnibus Law’ (UU Cipta Kerja). The Court also forbade the passing of any further implementing regulations and policies associated with the law in a two-year grace period. If the necessary changes are not made within two years, the Court ordered that the Omnibus Law would become “permanently unconstitutional”. 

The Constitutional Court’s judgement will put further pressure on the Government to reconsider the Omnibus law. But a two-year grace period could also be exploited. By the end of the grace period in November 2023, Indonesia will have less than seven years to meet its pledges according to a deforestation agreement signed at the COP26 summit in October. Signatories of the agreement promised to stop deforestation by 2030 although international supervisory arrangements are likely to be inadequate. The agreement was furthermore dismissed by Government Ministers shortly after its signing.

Late last year, shortly before parliament passed the Law, and as demonstrations against it  were ongoing, TAPOL reported that the law would diminish workers' rights. The law has also severely weakened environmental protections, including watering down environmental impact assessments. It has also posed more challenges for communities affected by pollution or climate change to bring lawsuits. 

Months before its passing in 2020, President Joko Widodo had asked for the Constitutional Court’s “support” in “creating a flexible, simple, responsive and competitive law for the sake of realising social justice for all of Indonesian society by the mandate of the Constitution”. 

However, the Government then faced demonstrations in major towns and cities around the time the law was passed. In May 2021, parliamentarians were surprised to find that the law absolved operators of illegal palm oil plantations of wrongdoing, providing them with an amnesty. Parliamentarians – some of whom were members of the parliamentary commission on environmental affairs - were warned repeatedly and publicly about the consequences of passing the law, but they still went ahead. 

Unfortunately, parliamentary arithmetic does not favour deeper reform of the law, let alone its repeal. The governing coalition involves almost all political parties, with the exception of the Prosperous Justice Party, PKS, and the Democrat Party, PD.