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.