Labor woes aplenty

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.