ILO defends RI workers amid investment outflows

Moch. N. Kurniawan, The Jakarta Post, Jakarta

The International Labor Organization (ILO) came to the defense of Indonesian workers on Friday, saying that unproductive laborers should not be considered as the only factor hindering the economy here.

"I doubt that the labor issue is the major problem causing investors to flee from here. What I see is Indonesia is on the right track as all parties are trying to improve the labor system," ILO director for Indonesia Alan Boulton told the Jakarta Post.

Admitting that the country's workers had to improve productivity, Boulton stressed that political and legal uncertainties as well as rampant corruption were the major problems that had caused many companies to relocate elsewhere.

The Korean Chamber of Commerce warned the government on Thursday that South Korean firms would pull out of Indonesia if it failed to address various labor problems ranging from unfavorable labor policy, soaring increase of wage, poor productivity and constant strikes.

Recently, U.S. footwear manufacturers Nike and Reebok cut back their operations in the country, citing increasing labor problems.

Some foreign and domestic firms have also criticized two new labor bills currently being deliberated in the House of Representatives (DPR), saying that they were too pro-worker and hurt their businesses.

Minister of Manpower and Transmigration Jacob Nuwa Wea said this week that the government would revise some 35 chapters of the bills which have been widely rejected by the country's workers.

Boulton hailed recent meetings between labor unions and the Ministry of Manpower and Transmigration, as well as the business community and the ministry as part of efforts to create good labor laws.

However, Indonesia had to concern itself with its workers' low productivity which has eroded its competitiveness, he added.

"Workers here must improve their productivity to compete with workers in other countries," he said.

According to the World Bank, there are increasing signs since early 1990s that Indonesia's competitiveness is being eroded by several factors: rising labor costs, low worker productivity and increasing industrial unrest.

Minister of Manpower and Transmigration Jacob Nuwa Wea said earlier that an average Indonesian worker produced six times less than an average Malaysian and eight times less than an average Japanese worker.

Boulton supported the current debates over labor bills however, which were focused on recognizing labor rights, not allowing military intervention in industrial disputes and regional administrations' power on addressing manpower issues.

The bills guarantee workers freedom to choose his or her worker union, a right that workers did not posses in the previous law. Workers would also have the right to negotiate with employers on working terms and conditions, while in the past employers were totally in control of the workers.

There would also be a guarantee in the system that no military intervention in resolving disputes between workers and employers, which was dominant in the past.

The authority of regional administrations to deal with local manpower problems would be legalized under the proposed law.

Meanwhile, senior executive at the Indonesian Workers Union (SPSI) Arif Sujito warned the government to meet its promise to revise 35 chapters of the labor bills.

According to him, three crucial issues: the approval from the Industrial Relations Settlement Court (PPHI) on worker dismissal, criminal action and a code of conduct for strikes, are among articles that have to be revised.

Arif said on dismissal matters, approval from PPHI was important to prevent employers from arbitrarily dismissing workers.

Regarding criminal action, he said, wrongdoing such as cheating, or theft should be categorized as a major fault, therefore those who carry out such practices would be only punished by dismissal.

At present, those wrongdoings are considered a crime, which can be tried in the criminal court.

On strikes, the new bills may stipulate that the employer must pay workers who go on strike but follow the proper procedures, Arif said.