KADINs Input on the Manpower Draft Bill

The Indonesian Chamber of Commerce and Industry (Kamar Dagang dan Industri Indonesia – “KADIN”) is advocating for labor market flexibility in the Draft Bill on Manpower (“Manpower Draft Bill”). This is considered important for improving the ease of doing business and ensuring certainty in the investment climate.

“We hope that the Manpower Draft Bill will be prepared comprehensively so that it does not create issues in the future that could disrupt the business sector,” said Diana Dewi, Chairperson of KADIN DKI, to Hukumonline.

The flexibility in question relates to the Provincial Minimum Wage (Upah Minimum Provinsi – “UMP”). The Manpower Draft Bill is considered to need a realistic formula before increasing the UMP.

For instance, increases in the UMP should be linked to company productivity and efficiency, rather than solely to demands from labor unions. In addition, according to Diana, it would be preferable if the application of wage structures and scales better reflects workers’ contributions.

“Because minimum wage regulations that frequently change send a negative signal for investment certainty,” she said.