Investors warn Indonesia that jobs bill puts forests at risk

LONDON: Global investors managing $4.1 trillion in assets have warned Indonesia’s government that a flagship job creation bill due to come before parliament on Monday could pose new risks to the country’s tropical forests.
In a letter seen by Reuters, 35 investors expressed their concerns, including Aviva Investors, Legal & General Investment Management, the Church of England Pensions Board, Netherlands-based asset manager Robeco and Japan’s largest asset manager Sumitomo Mitsui Trust Asset Management.
“While we recognise the necessity for reform of business law in Indonesia we have concerns about the negative impact of certain environmental protection measures affected by the Omnibus Bill on Job Creation,” Peter van der Werf, senior engagement specialist at Robeco, said in a statement.
With President Joko Widodo’s coalition controlling 74 per cent of seats, parliament is expected to pass the bill that the government says is needed to improve the investment climate and streamline regulations in Southeast Asia’s biggest economy.
But the investors said they feared the bill could hamper efforts to protect Indonesia’s forests, which would in turn undermine global action to tackle biodiversity loss and slow climate change.
“While the proposed regulatory changes aim to increase foreign investment, they risk contravening international best practice standards intended to prevent unintended harmful consequences from business activities that could deter investors from Indonesian markets,” the letter said. — Reuters