Labor 'terror' a blow to investor confidence<\/p>\n
JAKARTA (JP): The government's decision to shelve the
\nimplementation of labor decrees will only deepen foreign
\ninvestors' negative perception of the country's legal certainty,
\na noted foreign analyst said here on Saturday.<\/p>\n
The president of PT Harvest International Indonesia, Harvey
\nGoldstein, said the decision indicated that the government's
\npolicy could be dictated by \"terror\" from a rioting mob.<\/p>\n
The eruption of street violence also made clear to foreign
\ninvestors that Indonesia was unsafe and that political interests
\nremain on top of economic ones.<\/p>\n
\"It's a double jeopardy, a double danger to attracting foreign
\ninvestment,\" he told The Jakarta Post over the weekend.<\/p>\n
Last week several cities across the country were hit by a wave
\nof labor protests, which in some cases turned violent as police
\nlost control over rioting mobs.<\/p>\n
Workers demanded the government revoke revisions made to a
\nministerial decree on severance payment on the grounds that the
\nrevised versions violated their rights.<\/p>\n
The protests have been going on for several weeks, but have
\nonly recently grown out of control as more workers joined the
\nprotests.<\/p>\n
Following a meeting with the military last Friday, Minister of
\nManpower and Transmigration Al-Hilal Hamdi decided to postpone
\nthe implementation of the new decrees.<\/p>\n
Goldstein said that apparently fears of more unrest had
\nprompted the government to override its earlier policy. This,
\nhowever, smacked of inconsistency, he warned.<\/p>\n
In the same week, the government decided to delay the new
\ndecrees, it delayed plans to hike fuel prices, citing security
\nconcerns.<\/p>\n
But as the fuel price hike came into effect on Saturday,
\nthousands of protesters took to the streets again demanding the
\ndecision be canceled.<\/p>\n
The mass anti-government riots signal the eroding public
\nconfidence in the administration of President Abdurrahman Wahid.<\/p>\n
Loosing public support may spell disaster for the embattled
\nPresident, who is facing the threat of impeachment in August.<\/p>\n
\"The government is taking decisions based on politics,\"
\nGoldstein said.<\/p>\n
Ministerial Decree No 78 and No 111 were issued as revisions
\nto Decree No 150, which required employers to provide severance
\npayment to workers leaving their place of employment, even if
\nthey were dismissed.<\/p>\n
Local and foreign investors have decried the old decree as
\noverprotecting workers' rights.<\/p>\n
With the delay of the two ministerial decrees, a tripartite
\nforum comprising employers, trade unions and government
\nrepresentatives will deliberate the issue next month.<\/p>\n
Chairman of the Indonesian Textile Association (API) Lili
\nAsdjudiredja said Ministerial Decree No 150 dealt another blow to
\nthe labor intensive textile industry.<\/p>\n
He said the textile industry, with its high turnover rate,
\nwould be hit the most by the old decree.<\/p>\n
Low-skilled workers, he said, can easily move from one textile
\ncompany to another, forcing employers to fork out huge amounts in
\nseverance payments.<\/p>\n
Earlier, he also warned that this year's rise in fuel and
\nelectricity prices would send many textile companies to
\nbankruptcy, leaving thousands of workers jobless.<\/p>\n
Elsewhere, secretary general of the Indonesian Employers
\nAssociation, Djimanto expressed his disappointment over the
\ndelay.<\/p>\n
\"There is no consistency in the government's regulations and
\nits actions; it will be very difficult for companies to plan
\ntheir business,\" he said.<\/p>\n
According to him, it was very clear that workers'
\nrepresentatives had used intimidation to force the government
\ninto accepting their demands.<\/p>\n
The threat is that if the government ignored workers' demands,
\nthey would continue to rally and prolong the street violence.<\/p>\n
Chairman of the Indonesian Prosperity Trade Union Muchtar
\nPakpahan welcomed the government's decision, but added that a
\ndelay is unsatisfactory.<\/p>\n
\"We will continue to struggle to have the new decrees
\nrevoked,\" he said.<\/p>\n
He said if he had his way, the government should reinstate
\nLaw No 12\/1964 on manpower, which bans companies from firing
\nworkers other than due to criminal acts.<\/p>\n
\"If the law causes a company to go bankrupt, so be it. In a
\ncase of bankruptcy workers' rights must be prioritized,\" he said.<\/p>\n
Confirming Djimanto's fear, he warned that workers would
\nreturn to the streets to protest if the government fails to heed
\ntheir demands.<\/p>\n
\"We have allowed workers to be abused for far too long,\" he
\nsaid. (bkm)<\/p>",
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