Indonesia scraps rules restricting foreign workers

Indonesians walk on train tracks as they go to work at Tanah Abang train station in Jakarta on Oct 15, 2015.
Indonesians walk on train tracks as they go to work at Tanah Abang train station in Jakarta on Oct 15, 2015. PHOTO: REUTERS

JAKARTA (REUTERS) - Indonesia has scrapped rules introduced this year that made it harder to employ foreign workers after complaints from companies in the latest policy flip-flop.

The government no longer reqires firms to hire 10 Indonesian employees for every foreign worker, said Hery Sudarmanto, a director general overseeing foreign workers, about four months after the rule was imposed.

Permit requirements for non-residential directors, foreigners attending work meetings, and giving speeches were also dropped, he said.

"We are hearing suggestions from all sides. We dropped this to support investment because when investors come, they would create jobs," Sudarmanto told a news briefing on Wednesday (Oct 28).

The government of Southeast Asia's largest economy this year withdrew a plan requiring foreign workers to pass local language proficiency tests.

An official in the presidential palace told Reuters this month the government would make it easier for skilled foreigners to get work permits as part of moves to stimulate economic activity.

Hit by low commodity prices and slowing consumption, Indonesia's economy grew 4.67 per cent in the second quarter, the weakest in six years.

Manufacturers cut payroll numbers at the second-fastest pace in at least four years in September as industry activity contracted for a 12th straight month, Nikkei Markit's survey showed. The fastest pace was in July.