Wed, 24 May 2000

Govt in tug-of-war with labor exporters

JAKARTA (JP): As the controversy over the minimum capital for labor exporters rolls on, the director general for labor placement, Din Syamsuddin, asked on Tuesday that labor export firms incapable of complying with the rule to stop operating.

Din said the labor export sector required strong capital to enable it to go international and expand its market to numerous countries.

"Labor exporters with small capital should not take part in labor export activities. They should do their businesses in other sectors in line with their financial capabilities," he said.

The Manpower Ministry issued in September last year a ministerial decree requiring a labor export company to place at least Rp 1 billion in capital comprising assets worth Rp 750 million, along with a Rp 250 billion bank deposit.

It set a June 1 deadline for companies to meet the new equity ratio.

The previous ruling issued in 1998 set the minimum asset at Rp 300 million and the minimum bank deposit at Rp 75 million.

The bank deposit, placed under the name of the manpower minister, is compulsory in order to cover protection guarantees for workers and serve as a stand-by fund to help workers in need abroad.

"It will be very difficult for small- and medium-scale companies to participate in the labor business because it needs strong capital to make it more professional and credible," Din said.

He acknowledged that the decree was issued for the purpose of cutting down the number of labor-supplying companies which has now reached a staggering 450, while also hoping to improve legal protection for migrant workers, too.

"It is impossible for small companies to provide legal protection for workers or to hire foreign lawyers to provide legal aid for workers in need," he said.

Many small companies have used their bigger counterparts in exporting workers because of financial concerns.

"As a consequence of this, many workers they send get in hot water because they don't undergo proper training beforehand," he said.


More than half of the 421 firms under the auspices of the Indonesian Labor Exporters Association (Apjati) have repeatedly criticized the new ruling.

Enraged, they demanded that Din and Minister of Manpower Bomer Pasaribu step down.

The companies have complained they would be unable to meet the set deadline.

They also claimed the government did not involve Apjati in drawing up the decree.

"It is very strange that the government has made a new regulation without prior discussion with us," Apjati chairman Abdullah Umar said.

He added that Din had issued numerous rulings unilaterally, which eventually sparked much criticism.

He said the government was considered unfair and would enforce the decree to all labor exporters.

"The government should be wise in enforcing the decree because the companies cannot be treated equally," he said.

He also suggested that the government offer a long grace period to the labor exporters, which they will undoubtedly need, in order to adjust to the new requirement.

"It is not fair to allow only three weeks for the exporters to renew their licenses as stipulated in the new decree," he said.

Abdullah said the government's reason -- to enact the decree to improve protection for workers -- was baseless.

"If the government wants to improve protection for workers, it should revamp the insurance program for workers and improve bilateral cooperation with foreign countries where Indonesian workers are employed," he said.

He stated that thousands of workers who have gone abroad since March have been abandoned because all nine insurance consortia appointed to represent them were suspended due to the absence of liaison officers overseas.

"If the government is consistent with the law, all workers should participate in the social security program (Jamsostek) to provide basic protection for workers. The commercial insurance run by the nine consortia is not mandatory," he said.

Abdullah called on the government to draw up a new bill on labor export -- instead of decrees -- to give legal certainty both to workers and labor exporters.

He also said the government should revive all training centers and establish new ones in which to train workers as is stipulated in the constitution.

"The government is obliged to provide not only education but also vocational training for workers. Indonesia should promote vocational training to catch up with other countries such as the Philippines, China and South Korea," he said.

He acknowledged many workers have been sent without adequate training, saying this has caused a decrease in demand for Indonesian workers in foreign markets. (rms)