Aprisindo under fire over minimum wage rise delay

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)