'Social Clause' refusal unreasonable

'Social Clause' refusal unreasonable

By Teten Masduki

JAKARTA (JP): The Indonesian government refused to discuss the
so called Social Clause in the International Labor Conference in
Geneva recently.

The clause refers to a scheme to incorporate minimum labor
standards into international trade regulations.

Indonesia's formal ground for this refusal, as stated by
Manpower Minister Abdul Latief, was the fact that in the meeting
of the governing body last March no agreement had been reached
whether or not to discuss it.

As a matter of fact, Indonesia, and other countries of the
Association of Southeast Asian Nations (ASEAN), had attempted to
reach an agreement to commonly reject the Social Clause. The
rejection of the clause was also announced in the New Delhi
Declaration, which was signed by ministers of manpower of non-
aligned countries. Just before the ILO conference started, ASEAN
ministers of manpower had agreed to reject the Social Clause
proposition during their meeting in Chiang Mai, Thailand.

The rejection reflects the unpreparedness of Indonesia and
other ASEAN countries to face the consequences of the application
of this clause. Should it be put into effect, it would have the
potential of hindering development of manufacturing industries in
developing countries, which are mostly known for their unfair
labor practices.

Exploitation, and other grim realities of workers' conditions
in developing countries, in this respect, can be claimed as
unfair competitive elements used by developing countries in
expanding their exports into international markets.

The ideal concept of the Social Clause, according to its
proponents, will bring about a lot of benefits. First, it would
provide protection, for the workers, against repressive actions
by the government, as well as exploitation by the management of
multinational corporations. In the long run, the people of the
producing countries will greatly benefit from general trade
growth and expansion, which will be more equally distributed.

According to the scheme of the Social Clause, improvement of
the quality of life for the workers can be achieved by imposing
trade sanctions to countries that fail to respect the
international labor standard. Acceptance of the Social Clause
will allow for import restrictions or postponement of products
that enjoy preferential status from industries or corporations in
which the working conditions are inferior to the minimum labor
standard. So, exporting countries that fail to meet the minimum
labor standard will have to choose either to improve the welfare
of their workers, or to face the risk of trade barriers in their
export markets.

So far, growth in trade does not automatically result in an
increase of the work quality and improvement of workers'
conditions. This is believed to be the result of the monopolistic
practice of collective bargaining, the absence of independent
labor unions, the existence of repressive and anti-worker labor
laws.

However, it seems that the ideal concept of the Social Clause
is contradictory to the interests of the governments of
developing countries. To most developing nations, such as
Indonesia, the need to ensure decent workers' condition falls far
below another priority, namely, the creation of new jobs for the
people. At a glance, this argument seems perfectly valid, because
so many people in this country still have to find jobs.

Most of the governments of developing countries also believe
that improvement of workers' quality of life will be achieved as
their industries and exports grow. They believe that the proposal
of the Social Clause is actually a disguised form of
protectionism, which may actually hinder the growth of their
industries and eliminate one important factor in their
comparative advantages, namely, the low wages of workers.

Finally, in general, there is still a strong view among
developing countries that the human rights issue is domestic in
nature, and therefore no other country should be allowed to
interfere.

Furthermore, the reality of workers' rights in Indonesia is an
inseparable part of the industrial development strategy carried
out by the New Order government. As we already know, the era of
the oil boom was over in early 1980s, and the New Order
government began to shift from import substitution industry to
export oriented industry strategy.

During this period, as well as in subsequent years, Indonesia
has followed a very tight labor control policy. Labor activities
have been controlled in an integrated manner, under a tripartite
corporatist institution, consisting of the only workers,
organization--the All Indonesian Workers Union, or SPSI; the only
association of entrepreneurs, or APINDO; and the Manpower
Ministry. Activities of this tripartite institution, and other
workers' activities outside the production relation, fall under
the control the military, the police and regional administration
at each government level.

In short, the New Order government has to provide a cheap and
politically obedient labor force--which is an increasingly
determining factor in creating political stability--as
Indonesia's comparative advantage in order to attract foreign
investments, as well as industry relocation from advanced
countries.

The need of the New Order government to provide an inexpensive
and co-operative labor force still seems to be the basis for the
labor policy in Indonesia in the future, particularly now that we
are facing strong competition from other developing countries
that have just entered the arena, such as China, Vietnam,
Bangladesh. These countries are also relying on relatively the
same comparative advantage. Up till now, there has been no
indication that Indonesia will abandon the manufacturing industry
as the prima donna of national exports.

Since early last year, Minister of Manpower Abdul Latief has
been carrying out a limited reform of our labor policy. For
example, he has restructured the SPSI into a federation and he
has abolished military intervention in labor disputes. However,
these initiatives have not been sufficient to prove that the
freedom of association has been guaranteed, and the government's
refusal to recognize Serikat Buruh Sejahtera Indonesia (SBSI), or
the Indonesian Prosperity Trade Union, confirmed just that.

As a consequence, the reform of the workers' corporatist
organization was nothing more than a reproduction of a state-
based control institution with the aim of making a more effective
handling of increasingly strong workers' resistance, as is
evident in the waves of strikes in the last four years. Military
intervention is still applied, under the legitimacy of the
decision by Bakorstranas security agency No. 02, 1990.

The proposal of adding the scheme of the Social Clause to the
international trade agreement, which would be supervised by the
World Trade Organization, may become a reality if there is strong
support and pressure from the general public, particularly the
workers themselves. Unfortunately, the concept of the Social
Clause is not yet widely known in Indonesia, particularly among
low-level workers.

An important aspect to note is that support from the workers
could be obtained only if the implementation procedure of the
clause can guarantee that it can achieve its ideal concept.

Up to now, we have had bad experiences with the realization of
the general system of preferences by advanced countries.
Indonesia has been receiving the General System of Preferences
(GSP) facility from the U.S. since 1976, and it has always been
extended, although we still have discouraging workers'
conditions.

The U.S. government has been threatening to revoke the GSP
facility if Indonesia still fails to improve the rights of its
workers. However, the general public views the threat of the
revocation of the GSP facility as merely an economic penetration
tool that the U.S. uses in order to obtain certain economic
concessions from Indonesia in the middle of the increasingly
strong capitals of East Asian countries, most of which play a
dominant role in trade and industry in the ASEAN region.

Therefore, there is now a similar concern over the possibility
that the Social Clause will only benefit advanced countries and
some of the local business people who collaborate with
multinational firms. In the meantime, the sufferings sustained by
our workers become nothing more than a political commodity in the
bilateral relationship between the state and the capital.

The writer is head of the Labor Division at the Indonesian
Legal Aid Foundation.