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As Indonesia woos investors, ‘sex ban’ laws convolute sales pitch | Business and Economy

Medan, Indonesia – For years, Indonesia has managed to present itself as a welcoming investment destination for its neighbors Vietnam and Malaysia.

In 2016, during his first term, Indonesian President Joko “Jokowi” Widodo announced the opening of dozens of industries to foreign investment in what he called the “big bang” of economic liberalization. .

Six years later, the Southeast Asian country’s controversial new penal code – which has made headlines across the world since it was adopted earlier this month by Forbidden to have sex outside of marriage – is calling into question Jakarta’s commitment to fostering an open and welcoming business environment.

In Indonesia, public opinion remains divided over whether the revised penal code, which includes bans on blasphemy, cohabitation, sorcery and insults to the government, will help or harm advertising. Jakarta’s products to the world.

The Association of Indonesian Employers (APINDO) raised concerns about several parts of the code, including penalties for corporate crimes that would have “widespread impact” and the recognition of customary law. .

“For the business sector, the enforcement of this customary law will create regulatory uncertainty and cause investors to reconsider investing in Indonesia,” APINDO said in a statement sent to Reuters. for Al Jazeera.

APINDO also said a ban on sex outside marriage would “do more harm than good, especially for the business sector involved in tourism and hospitality”.

Other industry figures have brushed off such concerns.

“Currently the government is still implementing the new penal code. Of course, there will be some pros and cons, but there will be a period of three years before it is put into practice,” Clement Gultom, managing director of Boraspati Tour and Travel in Medan, told Al Jazeera .

“So I tend to choose not to be too extreme with the new penal code,” Gultom said, adding that lawyers and activists can apply for a review of the code through through the Supreme Court if necessary.

Khairul Mahalli, President of the North Sumatra Chamber of Commerce and Industry, expressed a similarly optimistic view.

“The function of the government is the regulator and the function of business is the operator,” he said. “We need to support the government and ensure that the new laws are coordinated at all levels of management.”

Mahalli said bodies like the chamber of commerce will be instrumental in connecting foreign businesses with local partners and ensuring smooth business operations once the rule comes into effect.

“For now, the business world in Indonesia is untouched and is a world of opportunity,” he said.

Indonesian President Joko Widodo
Indonesian President Joko Widodo in 2016 announced the opening of dozens of industries to foreign investment [File: Ismoyo/Pool Photo via AP]

Revised Code – a complete overhaul of the law from 1918, when Indonesia was a colony of the Netherlands – has been controversial for many years Before it was passed, it sparked nationwide protests in 2019. Then as now, critics fear it would violate basic human rights and erode basic human rights. Indonesia’s democratic freedoms.

The changes come as Indonesia is making strides in its efforts to attract investment, including a goal of attracting $89 billion in foreign investment next year.

According to Investment Minister Bahlil Lahadalia, Indonesia’s foreign direct investment (FDI) grew 63.6% year-on-year in the third quarter of 2022, reaching $10.83 billion.

China, Japan and Singapore are the biggest sources of investment, driven mainly by the development of resource processing – part of the country’s broader strategy to add value to its minerals. me.

Several environmental activists have proposed revised code that, without discouraging investors, will encourage those who want to exploit fragile ecosystems.

Arie Rompas, a campaigner at Greenpeace Indonesia, said he believes the code has been ratified for the benefit of foreign investment and to silence critical voices.

“Investors will be happy that environmental crime reports have been made easier, meaning environmental crimes have become harder to prove in court,” Rompas told Al Jazeera.

Rompas said many of the new laws that critics say will limit dissent and protest are likely to be used against critics of foreign investment, especially threatening projects. environment.

“The possibility of criminalization really threatens local communities and activists if they oppose or criticize projects that are seen by the government as an external partnership strategy,” he said.

“This penal code is designed to reinforce the spirit of colonialism’s legacy of natural resource extraction, environmental destruction, and silence critical voices in civil society.”

The new penal code places restrictions on “organizing marches, rallies or demonstrations” and includes penalties of up to six months in prison for anyone found to have caused “disruption”. mix of public interest, trouble or riot in the community”.

Other provisions make insulting public authorities and state institutions a crime, punishable by up to 18 months in prison.

Usman Hamid, director of Amnesty International Indonesia, said the project of Batang Toru Dam, a Chinese-funded hydroelectric enterprise worth $1.6 billion, is owned by PT North Sumatra Hydroelectric Power Company. Jakarta-based, is an example of the type of project the government hopes to protect with safeguards. penal code.

The project that started in 2017 was controversial from the start due to what Activists say is a threat it poses to the local Tapanuli orangutan population.

“For large investments, the law is intended to secure President Jokowi Widodo’s investment projects, including those with Middle Eastern backing and investment from China,” Hamid told Al Jazeera.

“Protests in different areas in the past have targeted Chinese investment projects, such as Batang Toru in North Sumatra.”

Hamid said articles designed to crack down on dissent, which critics say are deliberately overwritten, could be applied to criticize industries like the nickel sector.

Indonesia has almost a quarter of the world’s nickel reserves, which are used in batteries and stainless steel production. The country is a top exporter of nickel, but activists have long warned about the environmental impact of mining the metal in increasing quantities.

Other business watchers say the penal code can make investors nervous.

Adinova Fauri, an economic researcher at the Center for Strategic and International Studies based in Washington, DC, said common law provisions permit prosecution under certain local laws not covered by the law. criminal law.

Fauri told Al Jazeera: “It is necessary to consider the relationship between customary law and investment certainty in an area.

Fauri said there have been cases where businesses were not allowed to operate in the past due to conflicts with customary law, even though they had business licenses and investors needed more legal certainty after the ministry. New law passed.

“Investment laws need to be rearranged so as not to confuse investors,” he said.



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