RI still has major problems in industrial relations

Ridwan Max Sijabat, The Jakarta Post, Jakarta

Despite a strong legal basis, Indonesia is still facing major hurdles in developing harmonious industrial relations between employers and workers, says a government official.

"Following the downfall of the repressive New order regime and the beginning of the reform era in 1998, Indonesia has seen some fundamental reforms in its labor laws, but there are still numerous problems in promoting industrial harmony at the company level," Director General for Industrial Relations at the manpower ministry Muzni Tambusai said here on Monday.

Muzni explained that many employers had resisted reform and were still paranoid about the presence of labor unions in their plants, contributing to the more than 1,400 industrial disputes in 2004 alone. "Many employers have prohibited their employees from organizing and prohibited representation in leading trade unions, a serious infringement of workers's basic rights stipulated by Amended 1945 Constitution and ILO Convention No. 87 on Freedom of Association."

He added that most workers were uneducated and unskilled and most labor unions were not set up by workers, which weakened workers' productivity and bargaining power in their negotiations with their employers.

"Almost 80 percent of the 120 million people in the work force have not graduated from high school and as a result they have little or no bargaining power in negotiations with their employers. Most employers have declined to pay them salaries in line with the core labor standards because of their low productivity. This is a crucial problem for Indonesia, especially with the implementation of free trade agreements in Southeast Asia (AFTA) and the Asia-Pacific region over the next few years," he said.

In addition to the laws that allow freedom of association, Indonesia has had at least three other important laws that support a strong legal basis for better industrial relations. The three are Law No. 13/2003 on Labor Development, Law No. 22/2004 on Labor Court and Law 10/2002 on Labor Inspection.

Muzni acknowledged that many industrial disputes had emerged from misinterpretations of the labor laws and the absence of a strong commitment from employers and workers to adopt a common industrial relations procedure that would benefit both sides.

"It is not necessary to pit them against each other because they have a common interests; to achieve progress in their business and make profits. Both sides have their own rights and obligations as stipulated by the laws and thereby they have to work hand in hand to create a good corporate culture and governance and develop harmonious industrial relations to achieve their common goals," he said.

Many employers and workers have been involved in industrial disputes because each side fights for their own interests without looking at their own common goals, he added.

This major hurdles are part of a number of problems that will be discussed in a tripartite summit scheduled to be held here on Wednesday.

The national meeting that will be attended by some 500 participants from labor unions, the Indonesian Employers' Association (Apindo) and the government. It will also feature a number of economic and legal experts, law enforcers, activists and employers.

Furthermore, the government will also pass out awards to 60 companies that achieved some progress in developing harmonious industrial relations.

The one-day national meeting slated to be officially opened by Vice President Jusuf Kalla is expected to improve the situation.

Muzni expressed his optimism that Indonesia would be able to improve its labor relations record in line with the ongoing development of strong fundamentals for a true democracy.

"For example, 64 percent of more than 1,400 industrial disputes in 2004 were settled at the bipartite level and, with a better concept of industrial relations, employers and workers are expected to settle their disputes at the bipartite level to avoid wasting money and time," he said.