On 5 October 2020, the House of Representatives of Indonesia passed Law 11/2020 on Job Creation, or the Job Creation Law (JCL). President Joko Widodo ratified it on 2 November 2020. The JCL aimed at streamlining licensing requirements and bureaucratic inefficiencies, and accelerating the country’s economic progress. It was developed using the omnibus law method by simplifying and removing several laws. The JCL is currently no longer in force, as the Constitutional Court ruled that it was ‘conditionally unconstitutional’. However, in practice, most of the content of the JCL is in force as it was readopted in the Regulation in Lieu of Law 2/2022 on Job Creation.
The JCL amended many provisions related to the forest and land-use (FOLU) sector. These changes cover: the minimum threshold of forest areas; forest area gazettement; the role of forest management units; forestry sector licences; forest areas with specific purposes; utilisation of forest areas for non-forest sector development; environmental protection; protection of indigenous peoples/local community’s rights; and tenurial conflict resolution.
In 2022, Sebijak Institute, with the European Forest Institute (EFI), carried out a study on the potential impacts of the JCL and its implementing regulations on the FOLU sector. The study identified changes in the FOLU sector after the issuance of the JCL and analysed their potential impacts.