Open audit of firms called for

Open audit of firms called for

JAKARTA (JP): The government should first conduct open audits
on the financial situations of companies before granting their
requests for exemptions from the minimum wage regulation, a
lawyer says.

Teten Masduki, head of the Workers Division at the Indonesian
Legal Aid Foundation, said that the audits should be completed by
public accountants, not those appointed by the government. The
secrecy which surrounds government audits of companies is reason
enough for some people to oppose the exemption, he pointed out.

Teten was responding to the recent government decision to
exempt 215 companies from the minimum wage regulation that went
into effect on April 1, accepting that they were experiencing
financial difficulties in enforcing it.

Four other companies who applied for exemption were turned
down because they could not back up their claims with any data.
This is the largest exemption ever granted by the government.

The new minimum wage levels saw an average increase of just
over 10 percent. At the same time, the government required
companies to pay their workers, temporary or permanent, on the
basis of 30 working days.

Teten acknowledged that some companies do face many financial
difficulties due to the overall economy, including high bank
interest rates, which range between 16 to 20 percent.

However, he pointed out, the wages constitute only a fraction
of total production costs. The wages of textile company workers,
for instance, constitute only four percent of total textile
production costs.

Lendo Novo, a staff member of the Indonesian Textile
Association, recently said that, compared to other Asian
countries, Indonesian workers' measure of cost was low.

In Vietnam, workers' wages constitute 9 percent of total
costs, South Korea's, 14 percent and Japan's 20 percent.

Teten said that most of the companies applying for exemptions
are labor-intensive, with 8,000 to 12,000 workers. (16)