Employers caution that stricter labor law could hike costs and curb investment

The Indonesian Employers Association (Apindo) cautioned lawmakers that the pending manpower protection bill could increase operating costs and discourage investment if it emphasizes only worker protection. Chairwoman Shinta Kamdani urged a balanced approach that also supports the country’s competitiveness and expands employment opportunities. She highlighted a trend of investment moving toward capital-intensive industries and a reduced capacity of several sectors to absorb labor, contributing to a growing informal sector.

Apindo warned that imposing new restrictions on employment relationships and harsher sanctions without an impact study or clear implementation plan could damage productivity. The association called for regulations that give businesses certainty while safeguarding workers. The bill is slated to be voted on next week.