RI workers still have little bargaining power

Ridwan Max Sijabat, Jakarta Post

A labor dispute bothering a major plywood company in Banjarmasin, the capital of South Kalimantan, reflects in many ways the general labor conditions in the country. About 1,700 striking workers of PT Gunung Meranti Raya Plywood protested in front of the governor's office, demanding the administration force the company management to pay them their two months of overdue wages. They said their wages had been suspended for two months because the company lacked a supply of raw materials.

The workers said they were paid Rp 563,000 (US$ 55) a month in line with the monthly minimum wage in the province. There were no allowances for transportation, medical costs or meals. Following mediation by local authorities, the management agreed to pay 50 percent of the two-month's worth of salaries in two phases.

Elsewhere, tens of thousands of workers in the forestry industry have been dismissed during the past several months without any severance pay; many from plywood and molding companies that relied on illegal logging for their raw materials and have since collapsed after the government crackdown on the practice. Large-scale layoffs have also happened in other sectors.

Weak bargaining power -- some labor analysts might say almost none at all -- remains the crucial problem for Indonesia's workers, more so with the lingering effects of the economic crisis.

Workers' lack of bargaining power is reflected by the low quality of most collective labor agreements (CLA) submitted to the employment ministry. Most medium-sized to large companies have made CLAs with their workers but their content is no better than the minimum standards as stipulated by Law No. 13/2003.

"It is no secret that most CLAs contain articles (that are meant to benefit businesses), instead of those aimed at improving labor conditions," a source at the ministry said.

Workers' weak bargaining power has been worsened by increasing national unemployment after massive layoffs in crisis-hit industries. Examples include the more than 15,000 workers retrenched form the state aircraft manufacturer PT Dirgantara Indonesia (PT DI), the tens of thousands of workers from state- owned fertilizer company PT Pupuk Iskandar Muda and textile firm, PT Texmaco. What is known as here "open unemployment" has increased to an estimated 11.5 million in 2005 from 9.5 million in 2003 while "disguised unemployment" -- defined as people who work for less than 35 hours in a week, and often for much less -- has increased to 47 million from 35 million during the same period.

Fear of dismissal has led to more submissive workforce, with legions of other workers ready to replace any people who speak out about poor conditions or pay. Contracting and outsourcing in businesses is becoming more common and for the increasingly desperate jobless, it is a way to get a stable income, even if only for a few months.

The shortage of skilled labor negotiators has also contributed to workers' loss of bargaining power. Most labor activists at the company level have no ability to read or properly understand their company's balance sheets or to conduct negotiations with management in drawing up CLAs because they have never been trained in negotiation techniques.

The quality of CLAs in the banking sector is relatively better than those in other sectors because workers are more often professionally qualified and their advocates have been trained to negotiate with management. However, even here, the presence of skilled negotiators has not automatically improved the labor conditions in the sector. While bank profits are now slowly but steadily improving the one most-common reason given for the lag in employee working conditions is the slow economic recovery. Many banks have also subcontracted parts of their business to outside companies and recruited temporary employees to save money. Again the message is clear, profits are put before people.

Meanwhile, by far the most workers employed in the country are those in the informal sector; workers in small-scale companies that have no CLAs to protect them, giving their employers complete freedom to ignore and breach core labor standards, including remuneration, allowances and social security programs. Many small companies may have some form of contract or pretend to abide by general employment laws but any serious inspection reveals their remuneration packages and conditions are worse than those set out by labor laws.

This has left tens of millions of workers unprotected. Out of a 110 million strong workforce, only 7.6 million currently take part in social security programs (Jamsostek).

The end of the authoritarian Soeharto regime in 1998 also marked the end of a state monopoly -- the single national union. Since 1998 there have been 87 labor unions -- but many are little more than nameplates on the doors of their head offices.

The content of collective labor agreements (CLAs) in the banking sector and in other big companies may be relatively better than those set out in labor laws since most employees are professionals and at least semi-skilled. However, more than 80 million workers employed in the informal sector remain uncertain of their future because they are either completely unprotected or employed in short-term, insecure contracts.

Many employers prefer to employ temporary workers they can fire at any time as they try to make large profits, sometimes far in excess of what they pay their workers. Shouldn't these profitable companies be made to pay their workers fairer living wage, with better conditions?

The government's inability to attract more foreign investment and to maintain strategic industries will not only worsen the unemployment problem but also further ingrain the image of Indonesia overseas as a country with a low-skilled, low-paid and easily exploited workforce.

The author is a staff writer at The Jakarta Post.