Taiwan trade body criticizes RI's labor law
Taiwan trade body criticizes RI's labor law
Tantri Yuliandini, The Jakarta Post, Jakarta
Similar to nomads who move once their environment becomes
unfavorable, investors from Taiwan are increasingly skipping
Indonesia and looking for "greener pastures", a senior official
of the Taipei Economic and Trade Office in Jakarta said.
Deputy representative and director of the economic division,
Robert S.A. Chang said that in recent years Indonesia had become
unattractive to Taiwanese investors, particularly due to the
political upheavals brought on by the Asian economic crisis in
1997 and more recently by the increased activities of labor
militancy and the introduction of a new labor law.
"Taiwan investors are now hesitant to come to Indonesia
because of the 2000 Labor Law ... which we consider is
overprotective for workers even when they are in the wrong," he
told The Jakarta Post.
According to ministerial decree number 150/2000 on severance
and service payments for dismissed and retiring workers,
employers are obliged to provide severance payments for dismissed
workers, including those who are fired for major violations and
crimes, as well as service payments for resigning and retiring
workers.
It also specifies the amount of the severance and service
payments based on the length of the particular worker's
employment.
"The amount is quite significant and would induce workers to
deliberately act up so they get fired to get the severance and
service pay. This isn't fair," Chang said.
Furthermore, he said that while workers had the right to go on
strike, the law failed to stress and uphold the principle that
the striking workers must not force other workers to strike with
them.
Chang explained that while the law was good in protecting the
interests of workers, it had failed to take into consideration
the interests of employers, and therefore had only succeeded in
deterring new investments from coming in.
He said that now conditions in Indonesia had become
increasingly unfavorable for investors, Taiwanese investors were
turning to Vietnam where they could achieve the same level of
production but without the high risk, he said.
Foreign direct investment from Taiwan totaled US$17 billion
with more than 3,000 Taiwanese foreign direct investments, Chang
said.
However, since the 1998 crisis, the number of new direct
investors had been dwindling. While failing to come up with an
exact number, Chang said that only a "very few" investors had
come in since last year.