Omnibus Law on Job Creation, a Radical but Necessary Choice

Didi Setiarto,

Senior Expert for Energy at Deputy I KSP

The government has issued the Job Creation Law, aiming among others to simplify the licensing process, which is currently felt too convoluted. In the upstream oil and gas industry, this condition is still an obstacle, both at the central government and the regional level.

The Senior Expert for Energy at Deputy I KSP Yusuf Didi Setiarto said that the Omnibus Law was a radical choice, so many were skeptical and against it. However, the government and the Parliament ensured that the adoption of the law must be carried out so that Indonesia can move forward. “From 80 laws of 1,200 articles into one Job Creation Act with 174 articles. There are 11 clusters, this is a structural transformation being carried out,” he explained in the Morning Talk event, IPA Convex 2021, Friday (3/9).

Although this transition period has not seen many changes, Didi stated, business licensing will be included in the large One-Stop Service (OSS) system fronted by the Ministry of Investment and BKPM. “Is the OSS a sewing machine or tailor? The tailor will be OSS, not KSP and the Director-General of Oil and Gas,” he said.

He said that with the OSS system, licensing for oil and gas investors would be easier. The reason is, upon issuance of NIB, upstream oil and gas activities can immediately be carried out; for example drilling programs in areas such as forest areas. “We believe that the Ministry of Environment and Forestry has greatly transformed to interpret the President’s vision. The question is whether the system supports it. Especially in regard to the process, interlinking ministries/institutions/local governments,” he said.

Didi said that in terms of system integration, the Interlinking of ministries/agencies and local governments still has to be discussed. “For example, the coordinates are needed from the regional government, how would the OSS system connect to the regional government? Let’s ensure that the one does not have to go to local government to obtain coordinate. So the basic philosophy with OOS is to ensure that there will be a clear timeline to issue permits. What the investors need is certainty. This is already available through OSS , ” he explained.

Didi agreed that oil and gas investors need support from the government, especially regarding the ease of doing business. The Omnibus Law is considered the first step towards ease of doing business. He hopes that with the government’s support for investors through the Omnibus Law, the investment climate in Indonesia will be competitive compared to other countries. “As a driving force for the economy, oil and gas investment is still very much needed. This is a shared hope that investment can increase, for the sake of the country’s economy and the welfare of the people,” he said.

PROFILE

Didi Setiarto currently serves as the Senior Expert for Energy at Deputy I of the Presidential Staff Office (KSP). His work in the energy sector began at SKK Migas, where he served as Head of the Oil and Gas Legal Division, where he provided many legal opinions and negotiated several legal issues related to Gas Project Development (Financing Arrangement, Up Stream Arrangement) and Gas/LNG Sales and LPG. Didi is a graduate of the Faculty of Law, the University of Indonesia.