RI workers still have little bargaining power

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.