Jakarta. The minister of manpower on Thursday vowed to “eventually” abolish labor outsourcing, starting with restrictions on the scope of the practice.
“I myself will issue a ministerial regulation to restrict outsourcing,” Muhaimin Iskandar said in Surabaya. “First I will reduce it, then eventually it will disappear.”
In Indonesia, outsourcing refers to the hiring of workers on a contractual basis, often through a provider company. The workers are usually hired on short-term contracts and paid a daily wage, without benefits.
According to Muhaimin, companies generally did not outsource core jobs, only peripheral work like cleaning and security.
During May Day protests this year, labor groups called on the government to abolish the practice of outsourcing.
Following a violent clash between Indonesian and foreign workers in Batam in April, Muhaimin pledged to better protect the rights of outsourced workers, including more surveillance of working conditions, ensuring salaries were paid and contracts enforced, as well as clearly defining what types of jobs could be outsourced.
Muhaimin’s statement on Thursday, however, was met with skepticism by both workers and employers.
Sofyan Wanandi, head of the Indonesian Employers Association (Apindo), said while he believed the government was working toward putting an end to outsourcing by the end of next year, he questioned whether Muhaimin had the authority to do so alone.
Sofyan said the Indonesian Institute of Sciences (LIPI) was currently studying outsourcing and was scheduled to release its findings next month. After that, he said, LIPI, labor associations and the government would sit down and discuss how to proceed.
Timbul Siregar, chairman of the Indonesian Workers Association (OPSI), dismissed Muhaimin’s statement as political posturing intended to attract the support of workers.
“Actually, we’re happy if he is serious about his intentions to abolish the outsourcing system. But so far, there has been no effort from government to implement it,” he said.
Timbul said similar pledges had been made last year but nothing came of it. “There are many violations regarding the outsourcing of workers but the government does nothing to defend them,” he said.
Muhaimin said the ministry would work to ensure that more companies hired permanent employees, and that more outsourced workers saw their roles evolve into permanent positions.
“We will continue to check that companies’ outsourcing leads to formal employment and that employees have stable futures and not limited working lives,” he said.
Muhaimin also encouraged local governments to help create permanent jobs. “Looking ahead, economic growth must have an immediate impact on reducing unemployment,” he said.