President Joko Widodo allows businessmen to invest in the new capital (IKN) to recruit foreign workers (TKA). This regulation is governed by Government Regulation No. 29 of 2024 concerning changes in licensing attempts, business convenience, and investment facilities for enterprises within IKN.
The PP requires foreign workers in IKN to be accompanied by local workers. According to Article 22 paragraph (2) of the PP, the work period for TKA is valid for 10 years and can be extended. A labor observer from the University of Indonesia stated that this regulation is the government's effort to attract investment to IKN, because Article 22 paragraphs (3) and (4) stipulate that foreign companies in IKN will receive special treatment, exempting them from the obligation to pay compensation for using foreign workers within a certain period.
He believes this rule will cause problems in the future and also has legal issues due to conflicts with labor law. The Labor Law stipulates that foreign workers can only work under a fixed-term work agreement (PKWT). However, he stated that the 10-year service period stipulated in PP 29/2024, which can be extended, does not provide legal certainty. This will cause legal issues in the future because there is a 10-year work period that can be extended. This regulation not only creates legal uncertainty but may also trigger an influx of foreign workers. Economically, this regulation may lead to a massive relocation of foreign companies to IKN. Foreign companies in Indonesia will be exempted from paying compensation because they will not compensate for using foreign workers. Finally, foreign companies will be free to recruit foreign workers, so local workers will not be hired.
President Joko Widodo allows businessmen to invest in the new capital (IKN) to recruit foreign workers (TKA). This regulation is governed by Government Regulation No. 29 of 2024 concerning changes in licensing attempts, business convenience, and investment facilities for enterprises within IKN.
The PP requires foreign workers in IKN to be accompanied by local workers. According to Article 22 paragraph (2) of the PP, the work period for TKA is valid for 10 years and can be extended. A labor observer from the University of Indonesia stated that this regulation is the government's effort to attract investment to IKN, because Article 22 paragraphs (3) and (4) stipulate that foreign companies in IKN will receive special treatment, exempting them from the obligation to pay compensation for using foreign workers within a certain period.
He believes this rule will cause problems in the future and also has legal issues due to conflicts with labor law. The Labor Law stipulates that foreign workers can only work under a fixed-term work agreement (PKWT). However, he stated that the 10-year service period stipulated in PP 29/2024, which can be extended, does not provide legal certainty. This will cause legal issues in the future because there is a 10-year work period that can be extended. This regulation not only creates legal uncertainty but may also trigger an influx of foreign workers. Economically, this regulation may lead to a massive relocation of foreign companies to IKN. Foreign companies in Indonesia will be exempted from paying compensation because they will not compensate for using foreign workers. Finally, foreign companies will be free to recruit foreign workers, so local workers will not be hired.