Labor factor seen as hindering FDI<\/p>\n
Ridwan Max Sijabat, The Jakarta Post, Jakarta<\/p>\n
The emergence of numerous labor unions and the high severance
\npayments for workers have been blamed for the reluctance of
\nforeign businesspeople to invest in Indonesia, and for the
\nrelocation of their factories to other (more competitive)
\ncountries.<\/p>\n
Minister of Manpower and Transmigration Fahmi Idris said the
\nnumber of labor unions continued to increase but this was not
\nfollowed by an improvement in their skills in bipartite
\nnegotiations with their employers.<\/p>\n
"As a result, most labor unions have encouraged workers to
\nstay out of the workplace or to go strike after they are unable
\nto fight for their interests in bipartite negotiations with the
\nmanagement," he told a business forum on strategic steps toward
\neconomic recovery here on Thursday.<\/p>\n
There are at least 86 labor unions registered with Fahmi's
\noffice.<\/p>\n
The minister admitted that many investors, especially those
\nfrom South Korea, frequently complained about the expensive
\nseverance pay they had to give for their dismissed or laid-off
\nworkers.<\/p>\n
"It is quite a dilemma because laid-off workers would have
\ndifficulty in meeting their daily needs and sending their
\nchildren to school, unless they receive higher severance payments
\nsince there is no guarantee they will get new jobs after being
\nlaid off," he said.<\/p>\n
Fadmi said the country's high unemployment rate was linked to
\nthe poor development in the real sector, while calling on the
\ngovernment to review the investment law and procedures to make
\nthe country more conducive to foreign investors.<\/p>\n
The government has accelerated labor export to help contain
\nthe unemployment problem that has affected the national education
\nprogram as unemployed parents cannot afford to send their
\nchildren to school and contributed to the increasing crime rate.
\nOpen unemployment has reached almost 12 million people, while
\ndisguised unemployment or underemployment has reached 48 million.<\/p>\n
Sofyan Wanandi, chairman of the Indonesian Employers'
\nAssociation (Apindo), supported Fahmi's call and said the
\ngovernment should review the labor policy to attract new
\ninvestment.<\/p>\n
"The government should review Law No. 21\/2001 on labor unions
\nand Law No. 13\/2003. Many employers are confused by the numerous
\nlabor unions in their companies, especially when they have to
\nhold bipartite negotiations to prepare collective labor
\nagreements (PKBs).<\/p>\n
"Besides, the labor law also requires employers to pay
\nseverance and service payments that could be 20 times higher than
\ntheir monthly salaries. Such regulations are not found in any
\nother countries," he said.<\/p>\n
He pointed out that many labor-intensive factories have moved
\nto other countries and that no new labor-intensive firms have
\nentered Indonesia since the economic crisis hit Indonesia in
\n1997.<\/p>\n
New investors have invested only in capital-intensive
\ninvestment projects and the mining sector to avoid non-investment
\nfriendly labor regulations, Sofyan said.<\/p>\n
However, National Front for the Struggle of Indonesian Workers
\n(FNBI) leader Dita Indah Sari said the labor factor was not to
\nblame for the low investment in the country.<\/p>\n
The lack of new investors in Indonesia has more to do with the
\nglobal crisis and the rising prices of imported raw materials,
\nshe argued.<\/p>\n
"Many labor-intensive factories have stopped operations or
\nmoved to other countries because of the rising prices of raw
\nmaterials and the high-cost economy," she said.<\/p>\n
Dita conceded that the existing laws do favor workers because
\nthey have been in a weak position in bipartite and tripartite
\nnegotiations.<\/p>\n
Labor unions would support the proposed review of anti-
\ninvestment chapters in the two labor laws, if the government was
\nserious in providing social security for laid-off workers and
\njobless people.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/labor-factor-seen-as-hindering-fdi-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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