Sun, 06 Jul 2008
Industry players say a government plan to regulate company operating hours will lower their productivity and hurt workers relying on overtime payments.

Hasanuddin Rachman, deputy chairman of Indonesian Employers Association (Apindo), said Friday the plan would only create new problems for many business people.

Industry Minister Fahmi Idris said Thursday the government would issue a joint ministerial decree requiring companies to adjust their operational working hours to help ease periods of heavy load endured by state electricity firm PT PLN or face sanctions.

"The planned regulation will force many companies to recalculate their daily production, meaning they will automatically produce less," Hasanuddin said.

Lowering production at factories would result in a decrease in the supply of products to the public, he added.

"Therefore, many companies will gain less profits and pay smaller wages to their workers," he said.

Thomas Darmawan, chairman of the Indonesian Foods and Beverages Association (GAPMMI), said the policy would mean workers earning the minimum wage would not be able to benefit from extra shifts.

"Many workers will no longer be able to earn more money because they will not work overtime," he said.

He said factories would also face difficulties in rearranging employee shifts.

"I am also afraid many factories will have to dismiss their employees because of the limited working hours," he said.

He said a control system was needed to ensure the effectiveness of the policy, adding that it was up to the government to ensure the policy did not result in company losses.

However, Apindo chairman Sofjan Wanandi said businesses should wait until the government provided further details before forming opinions.

"We will meet with Kadin (the Indonesian Chamber of Commerce) to come up with a common stance related to the government's planned regulation next week.

"I hope we can formulate suggestions for the government," he said.

The regulation is designed to limit the effects of the electricity crisis currently facing the country.

The regulation will apply to all manufacturers -- including factory and office activities -- except those forced to operate 24 hours a day.

The government will also restrict the use of fluorescent lamps nationwide with the goal of saving up to 3,500 megawatts (MW) of electricity per year, or equivalent to Rp 6 trillion (US$654 million).



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