A few months ago, the Indonesian House of Representatives (DPR) ratify the Omnibus Bill on Job Creation or publicly known as Omnibus Law. This law aims at improving the ease of doing business and attract investment in Indonesia by simplifying the bureaucracy on investment and provide more jobs. Indonesian President Joko “Jokowi” Widodo, during the virtual press conference, stated that the need for jobs has become a primary need for now on, supported by the Covid-19 pandemic which makes the situation even worse.

“Every year around 2.9 million people at new productive age get into the labor exchange, so the need for new employment is crucial. Especially amid the pandemic (Covid-19), there are approximately 6.9 million unemployed and 3.5 million workers affected by the Covid-19 pandemic, so it is necessary to encourage the creation of new jobs, especially in labor-intensive sectors. So, the Omnibus Law aims to provide as many job opportunities as possible for job seekers and unemployed people.” He said.

This new Law covers 11 clusters: (1) business licensing; (2) investment ecosystem; (3) manpower; (4) land procurement;  (5) ease of doing business; (6) research and innovation support; (7) government administration; (8) micro, small and medium-sized enterprises (MSMEs) and cooperatives; (7) imposition of sanctions; (8) economic zones; and (11) government investment and facilitation to national strategic projects. 

How this law protects the worker?

            The main focus of Omnibus Law is to provide a new job for the job seekers and promote ease to invest in Indonesia. Therefore, this law is actually the answer to the biggest issues these days and gives win-win solutions for job seekers, investors, and the government. It is due to the Omnibus Law amends, deletes, and/or stipulates new provisions under various existing laws and regulations, including employment-related laws and regulations. The Omnibus Law regulate several things such as the utilization of foreign employee; employment agreement for a specified period of time; outsourcing; working time and rest period; wages; employment termination; and social security

What you should do as an Importer?

            As a matter of fact, human resources are very important for a company. The quality of the product, price of the product, the production time, and many more aspects are relying on human resources. In this case, good human resources are including the employee’s knowledge, skill, education, training, intelligence, health, and other things employers’ value such as loyalty and punctuality.

As an importer, you have to make sure that your supplier or your potential supplier treat their employee properly and has a good and healthy working condition including the working hours, wages and compensation, welfare, freedom of association and right to collective negotiations, environmental health and safety, avoid discrimination, not employ the underage labor, avoid forced labor, disciplinary practices, and has an adequate fire protection.

The Social Audit (SA) is an answer for you. This audit service verifies that you are doing business with factories respecting social rights. In today’s market, it is essential to protect your image by ensuring that your supply chain is socially compliant and responsible. You will be able to qualify new suppliers and understand if it is suitable to work with them. By doing a social audit, you will get some benefits, such as (1) Avoid factories with precarious working conditions, child labor, etc.; (2) Compare potential vendors and select viable sources; (3) Be proactive about sustainable development; (4) Demonstrate to your clients that you are a socially responsible company; (5) Save time and secure your business.

Contact us for further information on how we conduct a social audit in Indonesia.