Indonesia proposes labor law reforms and stricter forest fire penalties

The Indonesian House of Representatives (DPR RI) is proposing the expansion of social security for workers through the Labor Protection Bill. Commission IX Vice Chair Nihayatul Wafiroh stated that Article 129 of the bill, an initiative of the DPR, seeks to strengthen severance pay schemes. The proposal suggests managing severance funds through BPJS Ketenagakerjaan rather than allowing companies to keep these reserves internally, which currently follows PSAK 24 accounting standards. This move aims to ensure workers receive payments even if a company faces bankruptcy or financial distress.

Separately, policy analysts are calling for stricter legal enforcement and higher corporate fines regarding forest and land fires (karhutla). During a parliamentary discussion, analyst Adib Miftahul noted that while non-tax state revenue from corporate fines reached Rp 1.5 trillion, this amount remains small relative to the profits and land area controlled by the corporations involved. He emphasized that stronger sanctions are necessary to create a deterrent effect against recurring seasonal fires.