Perppu 2/2022, A Few More Steps to Become the Law/Undang-Undang

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Perppu 2/2022, A Few More Steps to Become the Law/Undang-Undang

March 2023
One Asia Lawyers Indonesia Office

1．Introduction

The Indonesian government drafted the “Draft Law of 2023 on Determination of Government Regulations in Lieu of Law No. 2 of 2022 on Job Creation Law (“Draft Law 2023”) ” and submitted it to the House of Representatives/Dewan Perwakilan Rakyat (“DPR”) for its review.

This Draft Law 2023 is drafted to make the “Government Regulation in Lieu of Law No. 2 of 2022 on the Job Creation Law (“Perppu 2/2022”)” to become a Law/Undang-undang.

2．Background

As you may be aware, the Indonesian Government issued the “Law No. 11 of 2020 on Job Creation Law (“Law 11/2020“, widely known as Omnibus law)” on November 2^nd, 2020, however; it was later declared conditionally unconstitutional by the Constitutional Court on November 25^th, 2021, through Decree No.91/PUU-XIII/2020.

To rectify the unconstitutionality of Law 11/2020, the Indonesian Government issued Perppu 2/2022 whose content is materially similar to Law 11/2020, on December 30^th, 2022. Although this Perppu 2/2022 has been effective and valid since the time of its issuance, because Perppu 2/2022 has not been approved by the legislative body and its validity is temporary, it needs to be approved by DPR to be effective permanently as a Law/Undang-undang. For this purpose, the government drafted the “Draft Law 2023” to make the “Perppu 2/2022” to become a Law/Undang-undang and submitted it to the DPR for its review.

3．The Latest Update

On February 15^th, 2023, DPR held a joint meeting with the Regional Representatives Council/Dewan Perwakilan Daerah (“DPD”) and approved the Draft Law 2023 to be passed to a plenary meeting of the DPR.

4．What is the Content of this Draft Law?

Draft Law 2023 stipulates the Perpppu 2/2022, whose content is materially similar to the Law 11/2020, to become the Law/Undang-undang.

5．Conclusion

Although we are still waiting for further updates from the DPR, once Draft Law 2023 is ratified at a plenary meeting of DPR, published and signed by the president, it means that Perppu 2/2022 has become the Law/Undang-undang.

Koji Umai, Lawyer (Japan)

Yusuke Tomofuji, Lawyer (the State of New York, USA)

Prisilia Sitompul, Lawyer (Indonesia)