Experts Stress Labor Law Enforcement to Safeguard Foreign Investment

Jakarta — Foreign investment remains a key driver of Indonesia’s economic growth. However, its sustainability depends not only on financial returns but also on adherence to labor regulations that foster healthy industrial relations and provide legal certainty for all parties involved.

Ahmad Ansyori, Deputy Chair II of the Indonesian Association of Labor Law Scholars and Practitioners (P3HKI), emphasized that worker protection and legal certainty are fundamental elements in maintaining the quality of investment in the country. He argued that compliance with labor regulations benefits not only employees but also investors by creating a predictable business environment.

“Investors should not focus solely on financial gains while overlooking legal obligations. Ignoring labor laws ultimately reflects a disregard for Indonesia’s legal principles,” Ansyori said during a discussion titled “Foreign Investor Compliance with Indonesian Labor Law” held in Jakarta on Tuesday.

He added that strengthening labor compliance is increasingly important as foreign investment expands across various sectors. Such efforts are necessary to ensure that economic growth goes hand in hand with the protection of workers’ rights and the creation of harmonious industrial relations.

According to Ansyori, persistent labor-related issues should serve as a collective evaluation point for the government, businesses, and other stakeholders to improve monitoring systems and law enforcement mechanisms.

P3HKI has proposed the introduction of a mechanism to encourage corporate compliance with labor regulations, particularly during corporate actions such as mergers, acquisitions, and divestments.

“For example, we propose a requirement such as a Certificate of Labor Compliance before companies proceed with corporate actions like mergers or acquisitions,” he explained.

Public policy expert Trubus Rahardiansah from Trisakti University highlighted that legal certainty plays a crucial role in maintaining both public and investor confidence in Indonesia’s business environment. He stressed that the implementation of court decisions and the resolution of labor disputes must be prioritized.

“Legal certainty is essential to building trust in the investment climate,” Trubus said.

Meanwhile, Arnando Jujur Pardamean Siregar, Director of Industrial Relations Dispute Settlement at the Ministry of Manpower, underscored that investment and worker protection should not be seen as conflicting goals. Instead, they must be aligned to achieve inclusive economic growth.

“Investment is expected to drive economic growth while creating jobs that improve public welfare. Good investment is not only profitable but also compliant with the law and respectful of workers’ rights,” Arnando stated.

The discussion concluded with a shared emphasis on the need to build an investment climate that is not only competitive but also grounded in legal certainty and respect for labor rights. Such an approach is expected to deliver broader benefits for businesses, workers, and the national economy.

Indonesianpost.com | Antara