Manpower Ministry Urges Employment Impact to Be Considered in Standardised Cigarette Packaging Rule

The draft regulation on standardised packaging for tobacco products needs to be thoroughly assessed by considering its impact on the employment sector, according to the Ministry of Manpower (Kemnaker). Kemnaker has reminded that the tobacco products industry (IHT) is a labour-intensive sector that has absorbed millions of workers. Director of Institutional Affairs and Industrial Relations Dispute Prevention at Kemnaker, Decky Haedar Ulum, stated that the IHT not only contributes to state revenue but also serves as a source of livelihood for many workers, especially in the hand-rolled kretek cigarette (SKT) sector. “Amid the current economic conditions, the IHT’s contribution is enormous, both in terms of state revenue through tobacco excise, which amounts to around Rp217 trillion, and significant employment absorption. The IHT is a massive economic anchor that absorbs labour. This standardised packaging draft will claim victims; 1.2 million people will be affected, especially hand-rolled kretek cigarette workers. These workers are employees who have served for decades,” he said. According to Decky, the majority of workers on the SKT production line are women who are the backbone of their families. Therefore, he believes every policy that has the potential to affect the industry must consider social and employment aspects. “If each worker supports 3-4 people, then around 2,000 people depend on the IHT. If this standardised packaging plan proceeds, it could lead to layoffs, and the government will also struggle to provide solutions to reabsorb these SKT workers. Upskilling these workers is difficult. Ultimately, it will become a social burden,” he stated. Consequently, Kemnaker hopes the implementation of the policy will consider various aspects, including workforce readiness and industry sustainability. “The IHT’s position in job creation is very crucial. We must think about and prepare an exit strategy together,” said Decky. A similar view was expressed by the Chairman of the Advisory Board of the Federation of Cigarette, Tobacco, Food and Beverage Workers Unions SPSI, Sudarto AS. According to him, SKT workers are the group most vulnerable to being affected if industrial performance declines. “SKT workers are the ones who will directly feel the impact of the standardised cigarette packaging draft. Remember, SKT workers are workers whose wages are calculated daily. When the industry’s performance plummets, the wages received by workers automatically plummet too. So, the consequences workers face right before their eyes as a result of this standardised packaging are reduced wages and layoffs. Therefore, this draft regulation must receive serious attention from the government,” said Sudarto.