Bank workers' demand<\/p>\n
Seen from an economic standpoint, the demand by former bank
\nemployees for severance pay up to ten times the government-
\nmandated standard package could simply be discarded as completely
\nunreasonable and excessive. It indeed makes no sense to tax the
\nowners of the already insolvent banks with such an obligation,
\nhowever tragic the fate of the now unemployed workers. After all,
\nwhy do former bank employees deserve severance pay ten times that
\nreceived by laidoff workers in other sectors?<\/p>\n
But to understand the real issue behind the demand of the
\n25,000 former employees of the 38 banks closed by the government
\non March 13, one must look beyond the economics of the demand. We
\nbelieve their demand is prompted more by their anger at bank
\nowners and management and the government.<\/p>\n
The statements of protest the former employees have made since
\nstarting their wave of demonstrations last month clearly express
\ntheir feelings of being punished for the wrongdoings of others.
\nThey do not see the bank failures as the unavoidable consequence
\nof the economic crisis. They instead put the blame squarely on
\ncorrupt management and greedy shareholders.<\/p>\n
The perception of the former bank employees is that many of
\nthe closed banks were bankrupted by shareholders in collusion
\nwith management and, in several cases, with bank supervisors at
\nthe central bank. This could easily be seen in the threats of the
\nfired bank workers to disclose the reckless banking practices
\nowners and management had engaged in to plunder their banks.<\/p>\n
Some of the laidoff workers could simply be bluffing, but we
\ntend to believe that as insiders many of these employees were
\nprivy to transaction documents at their former banks and
\nwitnessed how their management and majority shareholders might
\nhave plundered their banks. That they remained tight-lipped about
\nsuch misdeeds up to now could simply be attributed to their oath
\nto adhere to the banking secrecy provisions or to their helpless
\npositions as underlings afraid of losing their jobs.<\/p>\n
The perception that unsound banking practices and egregious
\nviolations of prudential banking rules took place at many banks
\nin the country was confirmed by the due diligence conducted on
\nbanks by international auditors over the past few months. The
\ncomprehensive audits revealed that a number of private banks
\nviolated the legal lending limits as management and shareholders
\nsiphoned off most of the loans to their own businesses. The
\nauditors also found the bulk of loans at state banks were given
\nto politically well-connected businesspeople without proper
\ncredit assessments.<\/p>\n
It is understandable if the fired bank employees are
\nfrustrated by the fact that despite these violations and despite
\nthe fact that more than 50 percent of total bank loans have gone
\nsour and hundreds of trillions of rupiah in taxpayers' money have
\nbeen used to bail out depositors and creditors at the closed
\nbanks, almost none of the bankers have been brought to court for
\ntheir crimes.<\/p>\n
Because many of the laidoff employees are university
\ngraduates, they know full well that there is more than enough
\nevidence to bring suits against bad bankers based on the Banking
\nAct of 1998, which stipulates a jail term of up to eight years
\nand a fine of up to Rp 100 billion for those found guilty of
\nviolating prudential banking rules. The law also empowers the
\nstate to seize the personal assets of the bankers if their bank
\nassets do not meet their liabilities.<\/p>\n
The former bank employees see the government simply does not
\nhave the political will to enforce the law. Even the management
\nand owners of the 16 banks closed as long ago as November 1997
\nremain virtually untouched. In some cases where the authorities
\nhave taken rapid and firm measures, the moves clearly were
\ndiscriminative because they deliberately targeted businesspeople
\nwho were critical of the government.<\/p>\n
Given the perception that the government allows bad bankers to
\nget away with trillions of rupiah in ill-gotten gains from the
\nstate coffers, the fired bank employees understandably consider
\ntheir demand for more severance pay quite trivial by comparison.<\/p>\n
The Indonesian Bank Restructuring Agency, which acts as the
\nmediator between the fired employees and the owners of the closed
\nbanks, should look past the economics of the issues and focus on
\nthe aspect of justice when negotiating a compromise solution to
\nthe problem of severance pay. We think the fired bank employees
\nwould not so stubbornly stick to their demands if they saw that
\ncriminal bankers were being brought to justice.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bank-workers-demand-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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