Major procedural flaws mar the omnibus law

Coordinating Minister for the Economy Airlangga Hartarto handing over the draft omnibus bill to House of Representatives (DPR) Speaker Puan Maharani in February. Photo by Astrid Faidlatul Habibah for Antara.

 

On Monday, the House of Representatives (DPR) and the government agreed to pass the omnibus bill on job creation into law. This statute was first proposed by President Joko “Jokowi” Widodo about a year ago, on 20 October 2019, when he was sworn in to serve his second term in office.

 

The bill’s deliberation process took less than six months since it was first discussed in the legislature on 14 April. This is a very short time to discuss an enormous bill that amends 79 existing laws, especially in the midst of the poorly handled Covid-19 pandemic, which should be legislators’ priority.

 

Academics, labour unions and civil society groups working on environmental and human rights issues have criticised the bill for provisions that endanger environmental sustainability and indigenous peoples’ and workers’ rights. Given this, it is of deep concern that the process by which the bill became law was deeply flawed procedurally, in at least four ways.

Four major flaws

First, the government neglected to allow participation of key stakeholders in the drafting process. The job creation bill was drafted at the end of 2019 under the coordination of the Coordinating Ministry for Economic Affairs. The government claimed that the bill would create new jobs and improve workers’ welfare. But many key affected groups – such as labour unions – were never invited to give their views.

 

It was also difficult for the public to obtain the official version of the draft bill. Instead of providing a publicly available draft, the government claimed that the version widely circulated through social media was incorrect, or a “hoax”.

 

This lack of transparency is clearly contrary to the principle of openness and the obligation to encourage public participation in Articles 5 and 96 of Law No. 12 of 2011 on Lawmaking.

 

Second, the DPR skipped a crucial stage in the deliberation process. The Legislative Council (Badan Legislasi), a DPR body of 80 legislators from nine political parties, was responsible for the deliberation process. According to Article 155(1) of the DPR Standing Orders, all matters on the bill’s list of concerns (Daftar Inventarisasi Masalah, or DIM) must be discussed at a Legislative Council meeting. But the Legislative Council instead quickly formed a working committee and delegated discussion of the DIM to it, without ever raising the issues at a Legislative Council meeting. This further undermined the principle of participation, as not all political factions were represented on the working committee.

 

Third, the DPR conducted discussion sessions during its recess period. Although this is not prohibited, Article 1(13) and Article 239(2) of the DPR Standing Orders stipulate that the recess should be used by lawmakers to visit their constituencies.

 

The DPR argued that it hastened the deliberation process because of the Covid-19 pandemic. But if Covid-19 was really such a concern, why was the legislature not prioritising its duty to oversee government policies to respond to Covid-19, instead of discussing a bill with little relation to the public health emergency that has hit Indonesia so hard?

 

Fourth, the DPR and government added a raft of provisions that were never discussed in the draft bill. Three laws on taxation were consolidated in the final draft brought to the plenary session on Monday: the 2007 Law on General Provisions of Taxation; the 2008 Income Tax Law; and the 2009 Law on Goods and Services Value Added Tax and Luxury Goods Sales Tax.

 

This happened even though the legislative dossiers accessible to the public show that these three laws were never discussed during the deliberation process from April to late September. In fact, at the beginning of the year, the government proposed a quite separate omnibus bill on taxation as one of three omnibus bills (the other two were the job creation bill and the bill on the national capital). Instead of allowing a proper debate about major tax reform, the government simply folded the tax laws into the job creation bill at the last moment.

Why omnibus bills are problematic

In countries with common law systems, omnibus laws are commonly used to regulate multi-sectoral issues and amend many laws at once. But omnibus laws are not recognised as a method of lawmaking in the Indonesian legislative system, and for good reason. From the time that the government announced that the job creation bill would be drafted in omnibus form, academics raised the alarm about the potential for procedural violations in the drafting process.

 

Governments (as initiators of omnibus bills) like omnibus bills because they can reduce the deliberation process in the legislature, compared to the lengthy deliberation process required for a number of different laws. Their size can complicate opposition in the legislature, making detailed analysis and criticism more difficult, as was the case with this bill.

 

In fact, more than 40 states in the United States now prohibit the use of omnibus bills in the lawmaking process, precisely to prevent vested interests inserting unrelated provisions, just as happened with this bill.

 

Another problem is that omnibus laws rarely fulfil their supporters’ claim that they simplify the legislative process. The government certainly claims that the Law on Job Creation will simplify Indonesia’s complicated regulatory landscape by reducing the number of existing laws. But this hardly seems likely given that the Job Creation Law mandates hundreds of provisions to be further regulated by dozens of subordinate regulations that are yet to be issued.

 

The Indonesian Centre for Law and Policy Studies (PSHK) and the National Development Planning Agency (Bappenas) found that this sort of hyper-regulation is just the tip of the iceberg of Indonesia’s legal chaos. Related causes include the incompatibility of legislative planning with development planning, the absence of monitoring and evaluation mechanisms in the legislative cycle, and the absence of single authority to handle regulatory management issues.

 

The job creation bill has given the omnibus method a bad name in Indonesia, just as in many other countries. The concerns that academics had from the beginning — such as the limited time allocated for deliberation and poor stakeholder participation — have all been borne out.

What now?

The next stage for the bill will be its authorisation by Jokowi. He can refuse to do so, but according to Article 20(5) of the 1945 Constitution, if the president does not sign the bill within 30 days from the date of its approval in the DPR, it will still be automatically enacted as a valid law.

 

In fact, Jokowi used the tactic of not signing last year, when he declined to sign the amended Law Number 30 of 2002 on the Corruption Eradication Commission (KPK). In the face of massive public protests, Jokowi did not sign the bill in order give the impression he sided with public objections. But this had no legal impact, and the revised law was enacted anyway.

 

As with the job creation bill, the revisions to the 2002 KPK Law were also proposed by the government, so the notion that the president would seriously try to stop legislation he had proposed defies logic. If Jokowi does not sign the job creation bill, it will be a meaningless gesture, nothing more than a political manoeuvre designed to deflect public pressure. It will have no impact at all on the enactment of the Job Creation Law.

 

The only constitutional avenue left is to challenge the law at the Constitutional Court. When this happens, as inevitably it will, the Constitutional Court must review not only the Law’s content provisions for compatibility with the Constitution, but also the legislative making process (uji formil). This is highly relevant given the closed-door drafting and deliberation processes and the other procedural violations described above.

 

Although the Constitutional Court has never before granted a petition for judicial review of the legislative making procedure, this step is still worth taking. At the very least it will serve to emphasise the growing chasm between the interests of the people and those who supposedly represent them in the legislature, but now seem far more concerned about the interests of big business.

 

Rizky Argama is research director of the Indonesian Centre for Law and Policy Studies (PSHK) and a lecturer at the Indonesia Jentera School of Law (STH Indonesia Jentera). He holds a Master of Laws from the University of Melbourne.