AmCham Update Vol. 7 #096

Unions Air Gripes about Employment Bill, 2000 Free-Lunch Kitchens Suspended, Purbaya wants to Use AI to Hunt down Tax Cheats, Indonesia to Open Bank Accounts for 200 Million People, Joint Chambers Networking, Early Maneuvers under way ahead of 2029 Elections

Sep 11, 2026

Labor Airs Grievances over Employment Bill

Labor unions are planning nationwide demonstrations related to the proposed new employment bill as they demand stronger worker protections, from changes to the minimum wage formula to tighter limits on contract work and a new severance reserve system.

Employers, meanwhile, are pressing for a bill that looks after workers but does not undermine the investment climate. They argue that higher labor costs and other restrictions could harm Indonesian competitiveness.

The deadlock comes as the government wants the bill finalized by the end of October, following a 2024 Constitutional Court ruling that ordered the government and the DPR to draft a new employment law separate from the Job Creation Law.

The head of the Association of Indonesian Workers (Aspirasi), Mirah Sumirat, said the coalition met with lawmakers and the Indonesian Employers Association (Apindo) on Sep 8 to discuss the bill.

“After looking at the House-initiated bill, it is quite bad. Provisions on a decent standard of living and justice are not reflected in it,” Mirah told The Jakarta Post on Aug 9.

The coalition wants to restore the role of wage councils in setting minimum wages and restrict fixed-term employment contracts (PKWT) to one year, compared with the longer terms currently permitted. The group also wants to limit foreign workers to highly skilled positions to facilitate technology transfers.

“We are also planning to hold demonstrations in regions across the country, from Sabang to Merauke,” Mirah said. “If the outcome is not satisfactory, we will hold a large-scale national protest, either at the DPR or the State Palace. We will wait and see how the outcome develops.”

Apindo labor affairs division chairman Bob Azam, had said on Aug 31 that the employment bill should balance worker protections with job creation and investment, rather than create regulations that make formal employment more difficult.

Apindo, he said, wants a “transformative” law that guards the country’s competitive position in ASEAN and focuses on realistic provisions for companies.

Manpower Minister Yassierli said the government is open to input as it prepares the bill with the DPR.

“We are currently in the review phase, and starting next week, we will begin discussions with the House of Representatives. During that phase, labor unions, trade unions and Apindo will also be involved in the discussions,” he said on Sep 9.

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2,000 MBG Kitchens Suspended over Food Safety Woes

In the face of rising numbers of food poisoning cases, the National Nutrition Agency (BGN) has temporarily suspended nearly 2,000 kitchens – formally known as Nutrition Fulfillment Service Units (SPPG) – for failing to register for required hygiene certification under the Free Nutritious Meals Program (MBG) of President Prabowo Subianto.

“Sanitation requirements are mandatory for kitchens implementing the MBG program. BGN continues to rigorously screen and verify tens of thousands of SPPGs,” BGN Head Sudaryono said on Sep 7.

The agency said the suspended kitchens would undergo further review before being allowed to resume operations.

Food safety concerns have persisted despite the promise of tighter oversight. In Pati, Central Java, 259 students and teachers from two schools had reported symptoms of suspected food poisoning as of Sep 10 after consuming MBG meals distributed two days earlier. More than 2,000 cases have been detected in various areas in the last two weeks.

The incidents prompted the Save Indonesian Education Coalition (KOSPI) and MBG Watch to send a notice on Sep 10 to Sudaryono, the president, Finance Minister Purbaya Yudhi Sadewa, and House of Representatives (DPR) Speaker Puan Maharani threatening legal action.

The groups called for a comprehensive evaluation of the program and guarantees that victims of foodborne illness receive adequate treatment and recovery support. They said they would move forward with legal action should the government fail to act by seven calendar days. They also raised concerns over the continued use of education funds to finance the free lunches following the Constitutional Court’s July 30 ruling requiring the program to be separated from the education budget by 2028. The Court said lunch is not an educational activity.

Around Rp 223.6 trillion of the Rp 769.1 trillion education allocation in the 2026 State Budget covers MBG spending. The government is required to spend 20 percent of the state budget on education.

The coalition urged the government to prioritize education spending, including teacher welfare, while calling for stronger accountability over repeated food safety incidents.

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Purbaya Plans to Use AI to Hunt Down Tax Cheats

In his latest effort to step up tax collections and find untapped revenue sources, Finance Minister Purbaya Yudhi Sadewa plans to use an artificial intelligence-based detection system to identify revenue sources and underpayments, with coal companies and gold traders among his key targets.

The technology is in development and will analyze data using the National Single Window Agency (LNSW) to detect underpayments of taxes and customs duties, Purbaya said on Aug 9.

“Any potential taxes or customs and excise revenue that have been missed can be detected early here. And usually, the accuracy is quite high,” Purbaya told reporters at the LNSW office in Jakarta.

The LNSW has an electronic system to handle customs, quarantine, shipping and other documentation related to exports, imports and logistics. By combing through a wealth of data, the Finance Ministry hopes to identify discrepancies pointing to underpayments by companies.

Coal companies will be an initial area of focus because of the sector's sheer size and revenue potential, Purbaya said.

“Going forward, no one will be able to play games anymore. We will monitor this much more closely,” he said.

The government also sees significant potential in gold trading. Purbaya said the system would examine taxes linked to gold transactions and identify underpayments. The system has already identified possible violations involving several companies, Purbaya said.

Once the LNSW compiles the data, it will be provided to the Directorate General of Taxes for potential enforcement against companies found to be dodging their tax obligations.

The initiative would expand the role of the LNSW beyond facilitating trade and logistics documentation to an enforcement role by using the large volume of information already flowing through the system to identify potential revenue leakage. AI-based analysis could allow authorities to cross-check information from different sources and flag discrepancies for further examination by tax officials.

Purbaya noted that that the scheme is at an early stage and the government is still mapping to find out how much revenue can be obtained from the integration of data.

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Indonesia to Open Bank Accounts for 200 Million People

The government plans to allocate around Rp 11 trillion ($620 million) to provide bank accounts for more than 200 million Indonesians as a way to expand financial access and support the digital distribution of government services.

Coordinating Minister for Economic Affairs Airlangga Hartarto said each account would receive an initial state-funded deposit of Rp 50,000, with implementation to be carried out gradually. The final funding and rollout mechanism is still being discussed with Bank Indonesia (BI) and the Financial Services Authority (OJK).

“The money will come from the state budget. With our target of 200 million people, we need to prepare at least $600 million, or equal to Rp 11 trillion,” Airlangga said on Sep 9.

The initiative follows a directive from President Prabowo Subianto during a cabinet meeting on Sep 7 to expand bank account ownership among Indonesians. The government wants to begin the program before the end of 2026, although it has not yet determined whether funding will come from the 2026 or 2027 state budget.

The government has instructed state-owned Bank Rakyat Indonesia (BRI) and Bank Syariah Indonesia (BSI) to prepare the accounts, which are expected to be linked with population data from the Directorate General of Population and Civil Registration (Dukcapil).

The program is also expected to support broader digital-government initiatives, including the planned distribution of social assistance through direct cash transfers.

Permata Bank Chief Economist Josua Pardede said that implementation could face challenges including uneven financial literacy, duplicate accounts, higher operating costs for banks, and the risk that dormant accounts could be misused for fraud or online gambling.

Indonesia already has relatively high levels of financial access. The 2026 National Survey on Financial Literacy and Inclusion found a financial inclusion rate of 93.61 percent and a financial literacy rate of 69.57 percent, up from 92.74 percent and 66.64 percent, respectively, in 2025.

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Joint Chambers Gather for Global Partners Networking

On Sep 8, AmCham Indonesia, BritCham Indonesia and the Indonesia Canada Chamber of Commerce (ICCC) co-hosted Global Partners by BritCham with the Americas at the Pastis Function Hall, Oakwood Suites Kuningan in Jakarta.

The evening brought together chamber members, diplomats and members of the wider business community for a relaxed night of networking. With old friends catching up and new introductions happening throughout the room, formalities were kept brief so guests could make the most of the evening.

The program opened with remarks from BritCham Indonesia Chairwoman Mercy Francisca Sinaga, followed by greetings from representatives of the co-hosting chambers. Sophie Freeland-Haynes, Country Director for Trade at the British Embassy in Jakarta, and Ambassador Mario Ignacio Artaza Loyola, Ambassador of Chile to Indonesia were guests of honor. Guests raised a glass in toast before a raffle draw added a playful spark to the evening. A lively networking session continued through the rest of the night.

The event received generous support from Bali Hai and Two Islands providing very refreshing beer and wine, respectively. British Propolis, HSBC, Coca Cola Europacific Partners and North Jakarta International School (NJIS) all supported the evening.

AmCham Indonesia extends its appreciation to BritCham Indonesia and ICCC, as well as the participating embassies, sponsors, partners and everyone who joined us. The evening was a warm reminder that some of the best business connections begin with a simple conversation.

We look forward to more evenings of good company and new connections!

Early Political Ferment tied to Sliding Approval Ratings for Prabowo

With President Prabowo Subianto’s approval ratings down and criticism of the government growing, political contenders have begun making moves despite elections being three years away.

The early political dance comes as Subianto’s approval ratings have fallen from about 80 percent in November 2025 to just over 50 percent in July polls.

Among those said to be positioning themselves early is infrastructure minister Agus Harimurti Yudhoyono, who recently made remarks that experts took as indirect criticism of the government.

Agus used his speech during the Democratic Party’s 25th anniversary celebration on Sep 5 to urge party members to be “honest about the realities experienced by the people.” He also called for continuous efforts to promote a “healthy democracy,” under an accountable government and a free press.

Former President Joko Widodo, who cannot run for a third term and tacitly backed Subianto in 2024, has also launched a regional tour that some analysts say is intended to boost the political future of his son, incumbent Vice President Gibran Rakabuming Raka.

The Widodo road show came as doubts have circulated over whether Subianto would keep Gibran on the ticket in the next presidential race. With Gibran largely sidelined from key decisions in the administration, Widodo has stepped up meetings with leaders of his volunteer groups.

These developments led Golkar Party politician Ahmad Doli Kurnia to question the emergence of two political blocs, one linked to Yudhoyono and the other to Widodo, while both are part of the ruling coalition.

“Such [shifts] further show that the 2029 presidential election is becoming increasingly difficult to ignore … and it seems that some political forces are already beginning to prepare,” Doli said earlier this week.

Outside the ruling coalition, unsuccessful 2024 presidential candidate Anies Baswedan frequently speaks out on a range of issues, including criticism of the government’s troubled free lunch program.

Several popular regional leaders have also begun appearing in opinion polls for 2029, including Jakarta Governor Pramono Anung from the Indonesian Democratic Party of Struggle (PDI-P), and West Java Governor Dedi Mulyadi, from Prabowo’s Gerindra Party.

Political Analyst Agung Baskoro said on Sep 10: “This is essentially a warm-up, a way to see whether [potential presidential contenders] have the political strength and support, both among the public and the political elites, to compete in 2029.”

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Member Announcement | PwC Indonesia

PwC Indonesia Voice of the Consumer 2026: Understanding the New Drivers of Consumer Value

Consumers globally are redefining what value means. According to PwC’s Voice of the Consumer 2026, purchasing decisions are increasingly influenced by six interconnected priorities: affordability, wellness, longevity, trust, convenience, and community. Based on insights from more than 21,000 consumers across 27 countries, including Indonesia, the report highlights how evolving consumer expectations are shaping spending across sectors such as food, retail, beauty, fitness, lifestyle products, and digital services. For businesses, the opportunity lies in removing friction, building trust, and making healthier, more convenient choices easier for consumers to adopt.

Explore Voice of the Consumer 2026 to uncover the six consumer shifts reshaping purchasing behavior and learn how your business can respond to changing expectations. Read the report here!

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Update is AmCham’s regular newsletter on developments related to investment, the economy, regulations and issues related to doing business in Indonesia. It comes out three times a week. It is edited by AmCham Managing Director Donna Priadi and written by the AmCham Staff.

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