New law, new hope?

Given this country's poor record in industrial relations in the past, it is not surprising that the new Law on the Settlement of Industrial Disputes, which the House of Representatives endorsed this week, is viewed with suspicion by activists in certain segments of the labor movement.

Nevertheless, the new law, which is more widely known by its Indonesian acronym, the PPHI, and which now only needs the President's signature to come into effect, represents a considerable step forward. Employers and labor unions have both given their support to the new legislation, which they hope will help to enhance the investment climate in this country by guaranteeing greater legal certainty for both workers and employers.

In contrast to many earlier pieces of legislation concerning worker-employer relations, the new law was written in consultation with, and with the full participation of, labor unions, employer organizations, the government and the national legislature. Although the newly endorsed law provides for the setting up of a special court to adjudicate on labor disputes, the government, through its Central Committee for the Settlement of Labor Disputes (P4P), will still be required to help labor unions reach out-of-court settlements with their employers if they should prefer to work out fair and quick settlements.

Ironically, it is precisely this role accorded by the PPHI legislation to the government that a number of labor unions oppose -- mindful, perhaps of the experience of the past when the government invariably sided with employers in labor disputes. However, as the secretary-general of the All-Indonesia Workers Union (KSPSI), Syukur Sarto, remarked, the KSPSI supported the government's role "because of the corrupt judicial system in this country." It would, after all, be cheaper for the employers, who have the money, to buy off a panel of only three judges to get a ruling in their favor than it would be a 15-member committee appointed by the government to settle the dispute.

At the other end of the scale, most employers too welcomed the new legislation. In the view of the Indonesian Employers Association (Apindo)'s secretary-general, Djimanto, for example, the new law should give investors the legal certainty they needed to work in this country. The new law, according to the Apindo official, "stipulates quick and fair legal proceedings" in seeking settlements to industrial disputes between workers and employers. "Employers will no longer have to wait five years as they did in the past in dealing with disputes with their workers."

The only thing that remains now is for President Megawati Soekarnoputri to put her signature on the document. In any case, the law says that even if she should fail to do so within 30 days after the House gives the document its endorsement, the law will automatically come into effect.

On paper, then, the new Law on the Settlement of Industrial Disputes appears to have given this country at least the hope that it can finally leave the turmoil of its industrial relations history behind it. Of course, a lot more is needed than words to rebuild an economy that has for years been battered by what is beyond doubt one of the worst crises this country has experienced since independence.

Now that an accord has been reached between some of the most pertinent elements in the sphere of industrial relations, what remains to be done is to build up the commitment that is needed to make the new law work in practice. Judging by what we have seen in the past, though, this will be much easier said than done. However, if the nation is sincere in its efforts to lift itself out of the slump it is currently wallowing in, there is no time to be lost.