Covid-19 impact and responses: Indonesia

Updated on: 15 February, 2021

What is the current situation?

General information

As of 11 February 2021, there were 1,183,555 confirmed cases of COVID-19 in India, of which 32,167 were fatalities and 982,972 people have recovered.

Following the Instruction by the Ministry of Home Affair Number 3/2021, the Large-Scale Social Restriction (PSBB), which is currently named Impose Restriction on Community Activities (PPKM) in Jakarta has been extended from 9 to 22 February 2021. The regulation can be seen in the Governor Decision DKI Jakarta Number 107/2021. Offices and restaurants can operate with a maximum of 50% capacity. Schools are still closed. Malls can open with limited capacity and hours (they must close by 21.00).

The Implementation Regulation of Job Creation Bill (Omnibus Law) has been opened for public consultation. There are four Government Regulations (GR) under the Employment Cluster:

GR on the use of foreigners workers;
GR on certain time working agreement, sb-contracting, working hours and rest time, also dismissal;
GR on wages, as revision partly from GR number 78/2015
GR on the implementation of unemployment benefit or JKP.

Some of the biggest trade union confederations such as KSPI, KSBSI and KSPSI AGN prosecuted against the Omnibus Law. The tribunal is still ongoing in the Constitution Court. Following the Circular Letter by COVID-19 Handling Acceleration Taskforce Number 5 and 6 of 2021 in overcoming the COVID-19 pandemic, effective from 9 February 2021 until further notice, the Indonesian government temporarily closes foreign citizens’ entry (WNA) from all countries to Indonesia. There are exceptions for foreigners who meet certain criteria. See the travel restrictions here.

The situation with factory production

Orders have started to increase even the situation has not returned to that of before the pandemic. The factories only use some parts of their production capacity. In our discussions with suppliers, we have heard that the current situation has made them very uncertain, including about how to respond to the government regulations that keep changing over time. The orders are available until March 2021.

What are the government policies to support local businesses?

SMEs that have no bank loans can apply for cash assistance for productive business (Banpres PUM) at their nearest SME Office. After the verification process, the government will transfer IDR 2.4 million (EUR 141) to SME bank accounts with Bank Rakyat Indonesia (BRI). SMEs can also get interest subsidies of 3-6% for 6 months, depending on the amount of the loan. Kindly check here for more information: https://eform.bri.co.id/bpum

What are the government policies and regulations to protect employees – the workers?

Pre-Working Card (Kartu Pra Kerja)

In 2021, the government will continue the Pre-Working Card programme that will provide free training for 4 months and IDR 1.15 million for workers as an incentive to participate in the training and a survey. The workers who received a Pre-Working Card in 2020 cannot join in 2021. To apply for the Pre-Working Card, workers shall follow the steps on https://www.prakerja.go.id/

Due to IT capacity limitation among garment workers, it is suggested that the workers get assistance from trade unions or supervisors for the application process.

Wage Subsidy Assistance (WSA)

One of the government programmes to help formal workers is the Direct Cash Transfer (DCT) also known as Wage Subsidy Assistance (WSA) that has began in August 2020. DCT applies to all formal workers in any sector whose salary is below IDR 5 million (EUR 300), who have been active in the social security scheme, BPJS Employment (BPJS Ketenagakerjaan) and have an active bank account. However, workers who have applied for the Pre-Working Card programme are ineligible for DCT, which is approved using ID card number. To obtain DCT, the employers shall register the workers to the BPJS Employment office or via SIPP Online BPJS. The government transfers assistance once every two months, which has been happening since late August to pay September-October 2020. The amount of the DCT is IDR 600 thousand (EUR 35) per month. DCT was transferred twice in 2020 and supported more than 12 million workers in September-December 2020. Unfortunately, the DCT programme is discontinued in 2021.

What are local stakeholders doing to lobby their government?

Trade unions are working advocate against the Job Creation Bill/Omnibus Law.

What are local organisations doing to support and protect workers?

Local organisations have more focus on doing research and capacity-building with the trade unions and workers. Given the pandemic situation, both activities are conducted online. In addition to that, some charities have been initiated to support the most vulnerable groups, such as homeworkers.

What have been the responses and requests of business associations to support the industry?

Business associations needs capital support, tax exemption, reduced the electrical and gas bills and other operation cost reductions ib order to keep their members (companies) afloat.

What are international brands doing to support the suppliers and protect the workers?

Brands have shared best practices from other production countries on how to deal with safety measures. No suppliers have reported on production-related support from brands.

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