Ministers deny companies relocating their plants
Ministers deny companies relocating their plants
JAKARTA (JP): Minister of Industry and Trade Luhut Pandjaitan
denied on Wednesday reports claiming that some export-oriented
companies had fled Indonesia in fear of rampant labor disputes.
He said his ministry hadn't found evidence of any company that
had decided to uproot its business because of concerns over labor
disputes.
He admitted that some industries had diverted their purchase
orders to other countries, but that was more due to Indonesia's
fragile security conditions.
"That is not tantamount to saying that they (industries) will
relocate their operations abroad," he told reporters after a
meeting with the Coordinating Minister for the Economy Rizal
Ramli.
Luhut was responding to local media reports that claimed
several export-oriented businesses will relocate their operations
to other countries.
These reports prompted Rizal to instruct Luhut and the
Minister for Manpower and Transmigration Alhilal Hamdi to address
the problem.
"Actually, companies have only questioned them (security
problems)," Luhut went on.
He said he would arrange a meeting between the provinces
police chiefs and industrial associations to discuss security
issues.
Separately, Manpower Minister Alhilal denied the same claims
about aggressive labor unions driving out the country's textile
and shoe companies.
"What's happening is a relocation of job orders, not the
companies," he was quoted as saying by Antara.
He said that for example the shoe industry was relying on job
orders for its continuing operation.
If owners of shoe brand names like Reebok, Adidas, Nike
relocate their job orders to shoe factories in other countries,
Indonesian shoe factories would have to shut down.
Alhilal cited for example the closure of the Kong Tai Reebok
factory, which was shut down when it no longer received job
orders.
He said the high import contents of the local shoe industry
further discouraged the placement of new job orders here.
Even a weak rupiah, he said, did not guarantee the shoe
industry's competitive advantage. Eighty to 90 percent of the
industry's raw materials are imported, he explained.
The textile industry, he added, spent 80 percent of its costs
on imported raw materials, with the remaining 20 percent spread
over electricity, fuel and wages.
However, he also urged labor unions and companies' management
to remain cool headed when involved in disputes.
"Strikes must not become a tool to force one's opinion, while
companies' management should take a better look at Law no 21 on
manpower instead of dismissing employees or rotating their
positions," he said.
Meanwhile, the Indonesian Footwear Producers Association
(Aprisindo) denied rumors that several foreign companies have
relocated their operations to Vietnam.
According to Aprisindo chairman Anton Supit, these companies
had only canceled new investment here.
But he added that the cancellation of new investment here had
cost Indonesia thousands of new job opportunities.
Chairman of the Indonesian Chamber of Commerce (Kadin)
Aburizal Bakrie said that with the Asean Free Trade Area (AFTA)
nearing, it would soon become easier to switch production sites.
"With AFTA, the location of factories within ASEAN does not
matter anymore because products can freely enter any country," he
said referring to the Association of Southeast Asian Nations
(ASEAN).
He said that Indonesia must work hard to retain its industries
and attract new investment.
ASEAN member countries have agreed to establish AFTA by the
year 2003.
The Pharmaceutical and Health Workers Union blamed the lack of
investment in Indonesia on the country's political and legal
uncertainties.
"The labor movement in Indonesia has not reached a critical
level yet, because it is still struggling for basic demands, and
trying to uplift workers' welfare from a state of slavery to a
more human condition," the union said in a press statement.
(bkm/rei)