Aprisindo under fire over minimum wage rise delay

JAKARTA (JP): President Soeharto ordered yesterday the minister of manpower to take action against the Indonesian Footwear Association (Aprisindo) for telling its members to delay paying the new minimum wage.

The association had caused unrest among workers, Latief said, quoting the President.

"The President ordered me to take stern action against the association," said Latief after meeting with President Soeharto at Bina Graha.

"The association has told its members to seek government approval to postpone paying the new minimum wage to their workers," the minister said.

The government increased the minimum full-time wage in all 27 provinces by an average 10.07 percent from April 1. A worker in Greater Jakarta now receives Rp 172,500 (US$75) monthly from Rp 156,000 in 1996.

Last year, the government introduced a regulation requiring companies to calculate wages on the basis of 30-working days a month, abandoning the traditional practice of setting a basic daily wage.

The regulation was opposed by employers, particularly textile and footwear producers.

Latief said his office had allowed 276 garment and shoe industries to delay paying the 1997 minimum wage after a public audit proved they were incapable of doing so.

The minister said the number of strikes has dropped 38 percent from 114 cases last year to 76 cases this year.

Ten thousand shoe factory workers from PT Hardaya Aneka Shoes Industries, which produce Nike and other sports shoes, demanded their employers pay the monthly minimum wage.

He said the recent strikes were mostly caused by employers, who were ignorant of the new minimum wage.

There were 366 medium and big shoe companies in Indonesia last year, mostly in Greater Jakarta. They produced 1.26 million pairs of shoes a year with total investment reaching US$2.80 billion.

Seventy percent of sport shoes are dominated by the four international brands: Nike, Fila, Reebok and Adidas.

Indonesia's shoes export reached US$2.19 billion last year.

Aprisindo Chairman Anton Supit said yesterday he had never encouraged the association not to pay the minimum workers' wage.

But he said Indonesia's footwear industry was in a "very critical" state, as could be seen from the declining enthusiasm of buyers and the financial problems faced by labor-intensive industries.

He said it was not surprising that many companies were unable to pay the minimum wage.

"I always tell Aprisindo members who are willing and able to pay the minimum wage to leave (our organization's) meetings, which we usually hold to accommodate problem-ridden members and seek a way out for them," he said.

He said under government regulations, labor-intensive industries could be exempted from paying the minimum wage if they asked for it and met several requirements.

"Aprisindo helps its members seek these exemptions," he said.

"I never thought the issue would become so serious... All I tried to do was keep the footwear industry alive," he said.

Minister Latief also said the President would soon issue a decree requiring employers of Indonesian workers abroad to pay US$100 a year during their working contract.

The money would be deposited at state cashiers and would be used to finance vocational training programs for local workers.

"It would also finance insurance and legal protection for the workers when they have troubles abroad," said Latief.

The levy is a condition for recruiting Indonesian workers and will have to be paid by their employers in advance.

"Insurance will pay the rest of their salaries if they are fired during the term of their contract," said Latief. (06/pwn)