Investment in Indonesia After Constitutional Court’s Decision in the Review of Job Creation Law

Abstract

In 2021, the Indonesian Constitutional Court decided conditionally unconstitutional in the review of the Job Creation Law. It was among a few decisions made by the Constitutional Court to accept a formal review, even if some dissenting opinions followed it. While the decision has largely influenced a wide array of regulatory laws because the Job Creation Law adopts the omnibus law model, the pivotal issue in this paper rests on the legal basis for investment in Indonesia after this decision. Firstly, it enquires whether the Constitutional Court exceeds its power for a procedural judicial review against the Job Creation Law. Second, it discusses the legal basis for investment in Indonesia after the Constitutional Court’s Decision No. 91/PUU-XVIII/2020. Using normative research, the results show that with this conditionally unconstitutional decision, there will be the absence of a legal basis for businesses, licensing, and investments in Indonesia in case the legislative body fails to amend the Job Creation Law within two years. Using the Previous Law will not solve the problem of a legal vacuum. The Indonesian investment will experience legal uncertainty for the next two years, especially the new types of businesses, permits, and investments with the enactment of the Job Creation Law.