365 firms seek exemption from minimum wage rule

JAKARTA (JP): Minister of Manpower Abdul Latief yesterday disclosed that 365 companies have applied to be exempted from the government minimum wage policy which came into force on April 1.

Latief stressed that the number of applicants represented only 0.2 percent of the 160,000 companies in Indonesia, and therefore could not be taken to signal massive opposition to the government's wage policy.

Speaking to reporters after reporting to President Soeharto at Merdeka Palace, the minister said there was "absolutely no reason" for the government to review the minimum wage policy.

Besides hiking the minimum wages by an average of 10 percent, the government is also compelling companies to pay all their workers -- both permanent and temporary -- on the basis of 30 working days a month, and not 25 days under the old regulation.

A number of companies, particularly those in labor intensive industries such as textiles and garment-making, have voiced their objections to the new wage policy, saying that it would make them uncompetitive in the export market. Some have also threatened to close down their factories.

Latief said the government has already approved 52 applications for exemption, and rejected one. The other 312 applications are still being studied.

Exemption is given to companies which can prove they are suffering financial difficulties.

Latief said that while the government is prepared to help companies with financial difficulties, firms should be more transparent and allow the government and workers to scrutinize their books.

He criticized companies for relying on low wages to retain their competitive edge. This means that when they are obliged to hike the wages, they would have difficulties, he said.

He stressed that the government is committed to continuing to increase the minimum wage levels to a more acceptable level.

The current levels, he said, are only sufficient to provide workers with 1,500 to 1,600 calories a day, while the ideal level should be 3,000 calories a day.

"How can anyone work with such a low calorie intake?" he said. (emb)