ANU’s Professor Greg Fealy presents at the Future Researchers of Indonesia Program in Bogor, July 2017
On 26 March the President signed into effect Presidential Decree 20 of 2018 on the Use of Foreign Labour. The regulation will come into full effect at the end of June 2018.
The regulation offers new opportunities for Indonesia based entities (government, business, community-based and socio-religious) to recruit foreign staff. While expatriate labour has long been part of the workforce in Indonesia, numbers have been extremely low (certainly as a percentage of the total workforce) and indeed have been falling during this decade. The new regulation may offer some more flexibility for agencies and enterprises operating in Indonesia to recruit new people.
Don’t expect a flood of entrants
While the regulation is a welcome step forward in terms of enabling Indonesian business and other entities to recruit optimal staff members, there do remain a number of administrative procedures to follow and the ongoing operation of a Compensation Fund to the government (a kind of foreign worker levy payment).
Another feature of the regulation is the need for foreign recruits to be accompanied by an Indonesian ‘apprentice’; the purpose being for the foreigner to be made redundant and replaced by the Indonesian ‘apprentice’.
Further details on the applications of the new system will be revealed through implementing regulations to be led by the Ministry of Manpower. Other implementing regulations will be needed from the Ministry of Justice and Human Rights (on immigration and visa related reforms). Technical or sectoral ministries will also be able to identify priority areas.
Education take up
One area where the new regulations have been well received has been in higher education. The Minister of Research, Technology and Higher Education has expressed enthusiasm for applying the new regulations in the Indonesia tertiary education sector seeing this as a great way forward in raising standards of education at the campus level.
In addition, the Compensation Fund system will not be applied for foreigners recruited to work in the education sector.
While the number of foreign academics teaching in Indonesian tertiary centres is limited, many of these are also short term. As a result these new regulations do offer considerable potential to assist enable new forms of campus to campus collaboration.
The Ministry of Research, Technology and Higher Education already provides funding to support Indonesian campuses recruit World Class Professors to teach in country.
Taken together these moves seem to follow a new trajectory of providing wider opportunities for Indonesian centres to build new and creative partnerships with international providers with the higher education sector.
At the national level this adjustment to regulations governing the use of foreign labour conforms to several other initiatives and proposals of the President, who is seeking to ensure that Indonesia is better connected into global development opportunities and not becoming isolated from them.