Fri, 14 Feb 2003

Union blasts fleeing footwear companies

The Jakarta Post, Jakarta

Like loggers who exploit resources, lay waste to and area an then move on, many footwear companies, who for the past fifteen years, have sourced their goods in the low-wage haven of Soeharto's Indonesia, are now fleeing the country in search of a cheaper and more compliant workforce, according to a global union representing workers in the sector.

Neil Kearney, secretary general of the Brussels-based International Textile, Garment and Leather Workers' Federation (ITGLWF), said as democratic unions began to emerge in Indonesia and demanded improvements in wages and working conditions, sporting goods retailers and merchandisers began to move to countries like Vietnam, with lower wages and higher productivity.

"As soon as workers start demanding their rights, the jobs disappear as quickly as they came," the union leader said in a press statement issued on Thursday.

Kearney alleged that despite their claims that by sourcing their goods in Indonesia they were providing jobs, generating export sales and helping to develop skills, these companies have in reality made virtually no contribution to local economic development.

"The profit fallout occurs abroad and all that remains in Indonesia are the wages paid to the workers. In reality, those wages amount to less than the cost of servicing the loans Indonesia took to build the Export Processing Zones and to provide the infrastructure necessary to attract foreign investment in the first place," he said.

"With managerial and often supervisory positions held by the mainly Taiwanese or Korean employers who run the plants, the skills acquired by (local) workers are minimal," Kearney speculated.

"So in effect, the only legacy created by these companies is a legacy of ill health, which will last long after they have moved on.

"Other developing countries should learn from Indonesia, lest they suffer the same fate," concluded Kearney.

According to data from the association, some 100 shoe makers have ceased their operations during the past three years.

Some 40 percent of Indonesia's footwear exports go to the U.S. market and another 33 percent to Europe, with the remainder exported to African, Middle Eastern and South American countries.