Government And DPR Pass The Ciptaker Bill To Spur Investment, Global Investors Criticize It

Illustrated photos (Mery / YOU)

JAKARTA - The House of Representatives of the Republic of Indonesia (DPR RI) passed the Job Creation Bill (RUU Ciptaker). This bill is an initiation by the government of Joko Widodo (Jokowi), whose spirit is to intensify foreign investment in Indonesia. However, the global investors responded negatively to the Ciptaker Bill.

Global investors, who manage US $ 4.1 trillion in assets, have warned the Indonesian government that the Ciptaker Bill which was passed on Monday, October 5 actually threatens the existence of tropical forests in Indonesia. And they don't like it. In a letter verified by Reuters, Tuesday, October 6, 35 investors expressed their resistance to the Ciptaker Bill.

Among them are Aviva Investors, Legal & General Investment Management, Church of England Pensions Board. Two of the biggest asset managers based in the Netherlands and Japan, Robeco and Sumitomo Mitsui Trust Asset Management are also among the critics.

"While we recognize the need for business law reform in Indonesia, we have concerns about the negative impact of certain environmental protection measures impacted by the Omnibus Bill on Job Creation," Peter van der Werf, Robeco's Senior Engagement Specialist, said in a statement.

The Jokowi administration, which controls 74 percent of parliamentary seats, is swinging through its plan with the bill. A coalition of 15 activist groups, including labor unions, condemned the bill and called for a strike.

Investors said they feared the law could hamper efforts to protect Indonesia's forests, which in time would undermine global action to tackle biodiversity loss and slow climate change.

"While the proposed regulatory changes are aimed at increasing foreign investment, they run the risk of violating international best practice standards intended to prevent harmful, unwanted consequences from business activities that could deter investors from the Indonesian market," said the letter, sent hours before the bill. passed.

With concerns over environmental damage increasing, it is the focus of investors. Some asset managers are starting to take a more public stance in urging governments in developing countries to protect nature.

In a similar intervention in July, 29 investors managing $ 4.6 trillion wrote to the Brazilian embassy demanding a meeting to call on President Jair Bolsonaro's right-wing government. This was done in an effort to stop deforestation of the Amazon rainforest.