Protesters clashed with police in Jakarta as thousands of students and workers staged rallies across Indonesia on Thursday in opposition to a new law they say will cripple labour rights and harm the environment.

The job creation law approved by Parliament on Monday is expected to substantially change Indonesia's labour system and natural resource management. It amended 79 previous laws and was intended to improve bureaucratic efficiency as part of efforts by President Joko Widodo's administration to attract more investment to the country.

The demonstrators say the law will hurt workers by reducing severance pay, removing restrictions on manual labour by foreign workers, increasing the use of outsourcing and converting monthly wages to hourly.