Labor woes aplenty
What is a manpower minister's primary job? The answer that first comes to most people's minds seems simple enough. First and foremost, as his title indicates, it is to oversee labor relations in this country, especially to protect workers against exploitation by miserly employers, and then to let the market's supply and demand mechanisms take care of the rest.
However, Indonesia's labor woes, long simmering underneath the surface and only reemerging at the onset of the reform movement in recent years, show the matter to be far more complex than it may seem.
Nevertheless, the simple explanation cited above appears not to be accepted by the majority of Indonesian workers. It is also not endorsed by the government -- at least, that is, if we agree with the view offered by Harijadi B. Sukamdani of the National Economic Recovery Committee (KPEN) during a media briefing in Jakarta on Wednesday.
His view is shared by members of the Indonesian Employers Association (Apindo) and other industry associations in this country, whose members over the past few years have had to deal with a rising incidence of strikes and protests, often accompanied by violence and even killings. These problems, according to Harijadi, mostly stem from the government's inappropriate labor policies which, he said, are not only shortsighted, but also discriminate against employers.
Take, for example, Minister of Manpower Decree No.150/2000, which Harijadi describes as irrational. Under this decree employers must, among other things, provide severance pay for employees in the case of a termination of their employment, even when they resign voluntarily. In response to this "irrational" ruling, the industrial associations have asked the Supreme Court to undertake a judicial review of the decree. Manpower minister Alhilal Hamdi, in turn, is said to have admitted to there being flaws in the decree, but he has done nothing so far to correct them. Indonesia, industry association members have pointed out, is the only country in the world to date that is known to have such an irrational decree as the Manpower Minister's Decree No.150.
It needs no expert to see that aside from the economic crisis that is affecting the lives of almost all Indonesians, a variety of labor problems -- most particularly underpayment and lack of adequate welfare arrangements for the workers, combined with rising demands for higher pay and more equitable treatment -- has helped to lead Indonesia deeper and deeper into crisis with more and more investors pulling out of the country.
To mention just a few examples, labor disputes have affected Indonesia's largest oil producer, PT Caltex Pacific Indonesia, for the last two years with no settlement yet in sight. The giant coal mining company PT Kaltim Prima Coal (KPC) has also been badly affected. In fact, labor disputes have been plaguing a host of sectors, including the mining, oil and gas, banking, hotel and manufacturing industries.
That problems abound in the labor sector is obvious enough. The big question is, what can be done? Indonesia can ill afford investors not only staying away from the country, but pulling out one by one. Apindo chairman Suparwanto seems to have the answer. "We need a minister with a firm understanding of labor issues in Indonesia," he advises. As things are, he said, the minister appeared to be interested more in bolstering the government's image among labor unions than in creating real jobs for the country's 6 million (official figure) unemployed. With the number of disguised unemployed unavailable but estimated to be about twice as many, there certainly is a dire need for job creation.
Indonesian officialdom likes to talk about preferring to give the people "the hooks rather than the fish". In the current context that must mean giving more people jobs, however modest, so they can earn an honest living. Eventually, and in not too long a time frame, of course, everybody's lot must be improved to reach standards that equal, or if possible surpass, those that prevail in some of the more advanced developing countries in the world. Scaring investors away from a country already beset by economic and financial woes is not the most effective way to reach that goal.
The answer to the question posed at the beginning, then, is for the manpower minister to find a balance that is viable under present circumstances between labor and industrial interests. What is needed is not only a firm understanding of labor issues in Indonesia, but of all the interconnected issues that in the final analysis could lead to a true improvement in our workers' lot.