Fri, 18 Jul 2003

Employers, unions set up bipartite body to mediate disputes

Rendi A. Witular, The Jakarta Post, Jakarta

The Indonesian Employers Association (Apindo), an influential business lobby, and the country's labor unions have agreed to set up a bipartite secretariat that would play a key role in settling disputes between businesses and workers, a move which some said reflected growing disappointment over the government's poor handling of labor conflicts.

Apindo chairman Sofjan Wanandi told The Jakarta Post on Thursday that the establishment of the joint secretariat should help improve the country's business climate, which has suffered, partly, due to protracted labor conflicts.

"Businessmen want labor peace. Through the secretariat we hope to be able to build mutual trust with the unions so that we can avoid labor strikes and demonstrations," Sofjan said.

The secretariat is the first of its kind in the country. It was formed during a meeting on Wednesday between Apindo and representatives of 75 labor unions.

During the meeting both parties agreed that any dispute should be settled through the secretariat and that the resulting settlement would be binding. Apindo and labor unions also agreed they would meet at least once a month to discuss various labor problems. The two sides would meet in the first week of August to discuss how the joint secretariat would be run, and to discuss the mechanism to settle labor disputes.

Sofjan explained that labor problems along with illegal levies and legal uncertainties had become disastrous factors discouraging new investments in the country.

He said that employers were often worried about labor strikes and demonstrations as they could be conducted at anytime and anyplace, threatening to disrupt the production process.

The lingering labor conflict in the country has also been blamed as one of the main factors triggering the relocation of some foreign companies to other neighboring counties offering better investment climates, like China and Vietnam. The conflict has also negatively affected exports as foreign buyers fear that labor strikes could eventually delay delivery of products.

Experts have said that luring more investments is key to increasing the country's economic growth to around 6 percent per year, from a meager growth rate of 3 percent to 4 percent posted during the past couple of years. The higher economic growth is needed to help resolve the pressing unemployment problems in the country.

Meanwhile, National Front for the Struggle of Indonesian Workers (FNPBI) chairwoman Dita Indah Sari said the setting up of the joint secretariat was a sign of growing distrust in the government's ability to settle labor conflicts.

She said the involvement of the government and lawmakers in resolving labor problems had only made things worse as they turned the cases to serve their political interests.

"The unions and Apindo have agreed to join forces in protesting any government policies that are unfavorable for businesses."

Dita praised the initiative of Apindo to form the secretariat, saying that it would help mend the deteriorating relationships between unions and businesses.

"This is a positive sign to (improve) the relationship between labor unions and businessmen," Dita said, adding that she doubted if the secretariat could fully ensure labor peace.

Labor unions mushroomed in Indonesia after the downfall of former dictator president Soeharto in 1998.

Since then hundreds of labor unions have prevailed but have placed the country in a dilemma since most of them run their unions in a militant way by organizing strikes and mass demonstrations, and burning factories, scaring away investors.