JP/9/H06

JP/9/H06

Fadli The Jakarta Post Batam

A tripartite meeting attended by businessmen, labor and government representatives has agreed to propose a five percent, or Rp 25,000, increase in the minimum wage for the industrial island of Batam in Riau province, officials said on Sunday.

The proposal was approved by Batam Mayor Nyat Kadir and has been presented to the Riau governor for endorsement or rejection.

Under the agreement, Batam's regional wage will likely increase from Rp 510,000 to Rp 535,000 per month. This would be the highest minimum wage so far when compared to other regions.

Nasir Harun, chairman of Batam's Indonesian Employers' Association (Apindo), said the decision to raise the minimum wage by 5 percent had taken several considerations into account, including preventing investors from leaving the island, which could spark mass dismissals.

"We want Batam to become more attractive to international business, so the minimum wage needs to be determined based upon mature consideration," he explained.

Arifin, head of the manpower and transmigration office in Batam, said the wage increase was relatively low compared to those of previous years.

"We are waiting for a gubernatorial decree approving the minimum wage. There may be some revisions," he added.

Netty Herawaty, who heads Batam's All-Indonesia Workers' Union Federation (FSPSI), said that in principle his organization had actually not wanted to propose any increase in the minimum wage on the island because it could raise the prices of essential commodities.

"We asked the employers during the tripartite meeting to establish a Batam Employers and Workers' Cooperative (KPPB) in order to pay more attention to the plight of workers," he said.

But, the Indonesian Prosperity Trade Union (SBSI) rejected the five percent increase decided on by the tripartite meeting, at which it was not represented.

SBSI leader Bambang Yulianto said the Rp 25,000 rise was not in line with the demands of workers for wages that were sufficient to cover estimated monthly living expenses of Rp 780,000 per person in Batam.

The chairman of the Batam Authority's board, Ismeth Abdullah, told The Jakarta Post that if the wage rise was not decided upon wisely, it could reduce the island's competitive edge in attracting investment compared to similar industrial zones in Asia.

The determination should also consider the financial capabilities of employers, he said without elaborating.