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.