Recently, the public has heard the phrase ‘omnibus law’ repeatedly and the reverberation of this phrase has caused confusion among practitioners and legal observers who have never studied or graduated from law faculties in countries that adopt the common law system.
In general, the meaning of the omnibus law must be traced from the omnibus bill. Here is the meaning of the omnibus bill according to the Black’s Law Dictionary, 2nd edition:
In legislative practice, a bill including in one act various separate and distinct matters, and particularly one joining a number of different subjects in one measure in such a way as to compel the executive authority to accept provisions which he does not approve or else defeat the whole enactment.
So, in essence, simply, it can be said that the omnibus bill which will later become the omnibus law when enacted, will be able to regulate many cross-cutting issues in one document so that there is an acceleration of legislation. This will be a very unique breakthrough in the Indonesian legal order because until now, Indonesia has been trapped in what is called the principle which in English is called the principle of the unity of the subject matter, in German it is called grundsatz der Einheit der Materie, in French referred to as principe de l’unité de la matière, and in Italian referred to as principio dell’unità della materia.
Similar to Indonesia, Indonesia has so far adhered to the unwritten principle in which all laws regulate only one specific topic. This has not been regulated in Law Number 12 of 2011 as amended by Act Number 15 of 2019 concerning Formation of Regulations and Regulations.
The effectiveness of Omnibus Law
Some time ago, the idea of the omnibus law emerged because there was an assumption that the concept of the omnibus would be very influential for the acceleration of changes in overlapping and irregular laws. Sectors that are felt to be greatly benefited by the concept of the omnibus are mainly about foreign investment.
During this time, the regulation of foreign investment is quite tough and there have been many regulations issued and scattered in various ministries and also the Investment Coordinating Board (“BKPM”). These scattered arrangements are due to Government Regulation Number 24 of 2018 concerning Electronic Integrated Business Licensing Services which introduces an Online Single Submission (“OSS”) system in which various relevant ministries will further regulate the process of integration of these ministries with the OSS Institution in managing licensing.
One of the strengths of the omnibus law is that there will be a law that can regulate cross-cutting under different ministries. This will speed up the consolidation of unprofitable and conflicting rules all at once. It could be that, without the need to wait for each ministry involved in OSS to issue revised regulations, it is precisely with omnibus law in the field of foreign investment, this can later be avoided. Not to mention, the omnibus law is expected to regulate not only foreign investment, but also other related matters such as employment issues to the relaxation of negative investment lists.
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Obstacles in Making Omnibus Law
So far, as mentioned briefly above, the concept of the omnibus law is not yet known in Indonesia because it has not been regulated in Law Number 12 of 2011 as amended by Law Number 15 of 2019 concerning Formation of Legislation. So, what obstacles are there other than because this concept has not yet been arranged in the hierarchy in the Indonesian legal order?
Omnibus Law will intersect with the concept of regional autonomy
As regulated in Act Number 23 of 2014 concerning Regional Government as amended by Act Number 2 of 2015 concerning Determination of Government Regulations in lieu of Act Number 2 of 2014 concerning Amendments to Law Number 23 of 2014 concerning Regional Government Being Law, Indonesia knows the name decentralization so that there is a division of authority between the central government and regional governments. Then, if later there is an omnibus law, there is a possibility that there is pressure from the regional government if there are articles that are detrimental to the interests of certain local governments.
Omnibus Law will be a temporary effective drug
There is the possibility of drafting various new laws that have the characteristics of an omnibus law more and spread to various other sectors, not only in the investment sector. It needs to be studied further so that laws that have the characteristics of the omnibus law do not actually create chaos in the Indonesian legal order, both in terms of hierarchy and regulated material.
If the two problems above can be resolved and known how to effectively deal with them, of course the concept of the omnibus law can run smoothly in Indonesia. For too long the regulations that were formed at the regional and central levels were in fact contradictory and not conducive to the investment climate in Indonesia. Hopefully, with the introduction of the omnibus law concept in Indonesia, more and more progress will occur in the process of legislation that will further facilitate investment in Indonesia so that foreign and domestic investors prioritize Indonesia as an investment destination country.