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)