Investors may pull out of RI over worker protests: Sofyan

Investors may pull out of RI over worker protests: Sofyan

BANDUNG, West Java (JP): At least 20 foreign manufacturing
companies in Jakarta and West Java may pull out of Indonesia over
concerns with worker demonstrations, Indonesian Business Council
chairman Sofyan Wanandi said on Saturday.

Sofyan said the 20 companies, mostly owned by South Korean
investors, included 13 firms operating in Jakarta and its
surrounding areas, and seven in Karawang, West Java.

"They said they wanted to meet with Gus Dur to receive
assurances about security and the certainty of their operations
in Indonesia," he said, referring to President Abdurrahman Wahid
by his nickname.

"If there is no longer any certainty, they said they would
pull out," Sofyan said on the sidelines of a seminar organized by
the Catholic University of Parahyangan on Saturday in the West
Java capital of Bandung.

Sofyan said the companies were hampered in their operations by
the continuing demonstrations.

Seven of the 20 companies, including leading Japanese
electronics firms Aiwa and Sony, have halted production due to
protests by their workers.

"Sony has threatened to relocate its factory to Malaysia if
its workers continue their protests," Sofyan said

He noted that electronics exports were one of the main sources
of government revenue.

Sofyan regretted the government's response to the issue, which
he said mostly favored the workers, warning that the majority of
foreign investors would leave the country if the situation
remained unchanged.

"Actually, worker demonstrations are something which the
President does not need to handle directly. I believe the
minister of manpower can handle it, and I have asked him to do
so," Sofyan said.

Sofyan also called on investors to be transparent with their
balance sheets, noting that many demonstrations were sparked by
workers' anger with investors' lack of transparency about their
profits and losses.

"Transparency is important. If the investors are making
profits, why not agree to (the workers') demands for pay hikes as
long as the demands are reasonable," Sofyan said.

Aside from worker demonstrations, foreign investors are also
concerned by unrest and the potential for unrest in many areas of
the country, and the uncertainty over the implementation of the
new law on regional autonomy, Sofyan said.

Foreign investors will not enter the country until they are
assured that Indonesia is secure, he said.

Concerning the autonomy law, Sofyan said foreign investors
were concerned the transfer of many of the rights and powers
previously held by the central government to the provinces would
encourage provincial administrations to create new taxes that
would prove burdensome to their investments.

"All parties are waiting for a regulation which will clearly
define which taxes will be collected by whom," Sofyan said.
(25/jsk)