Labor unions going too far, minister says

Labor unions going too far, minister says

The Jakarta Post, Jakarta

Minister of Manpower and Transmigration Jacob Nuwa Wea now admits
that labor militancy has reached such a fever pitch that it is
discouraging investors and undermining the overall business
climate.

Jacob, a union activist by background, joined a chorus of
critics who felt that labor unions in this country had a lot to
answer for by prolonging Indonesia's economic crisis.

"They have gone completely over the top. Besides, the number
of disputes is too great now," he was quoted as saying by Antara
on Sunday.

Their action has rendered the business climate in Indonesia
less attractive for investment, he said during a visit to Cepu,
Central Java. Jacob, however, did not spell out what action the
government would take to redress the situation.

His colleague in the Cabinet, Minister of Trade and Industry
Rini Soewandi, publicly begged Jacob earlier this month to rein
in the labor unions, saying that their increasing militancy was
undermining the Indonesian economy.

Various business organizations have cited poor industrial
relations as a major problem that the government must address
quickly. Investors from Japan, South Korea and Malaysia have also
singled out labor militancy as one of the reasons why they are
reluctant to put their money here. Many of them have also
relocated their factories to neighboring Asian countries.

Foreign direct investment has been falling drastically in
Indonesia. In the first five months of 2002, the government
approved only $1.6 billion-worth of new foreign investment
projects, a 60 percent drop from a year earlier.

But it is not only new investment that has been hurt. Export
orders have also fallen, in part due to falling orders for
manufactured goods. The reason most often cited is the inability
of Indonesian suppliers to deliver on time.

Jacob said there were now as many as 62 labor unions
registered with his ministry. Rather than engaging in strikes,
they should first develop the habit of negotiating and reaching
consensus in resolving disputes, he said.

The government, he said, had no intention of taking away
workers' right to strike.

"If they have to go on strike, let them do it for two hours,
but don't force the company to close down," he said. "A strike is
legal if the company is violating the law."

He added that two new pieces of labor legislation currently
being debated at the House of Representatives would set limits on
workers' right to strike.

Endorsement of the two bills -- one on industrial conflict
settlement and another on labor protection -- has been delayed
following protests from labor unions and employers'
organizations.

Jacob urged both sides to engage themselves in the debate, to
pinpoint the particular articles that needed to be changed,
instead of simply rejecting the bills outright.

He said the government and the House hoped to endorse the two
bills in September.