Unrest in Pasuruan

Unrest in Pasuruan

Joint security forces comprising local soldiers and police acted sternly against demonstrators who have resorted to criminal actions by setting fire to two cars and ransacking houses.

The unrest, which began on Nov. 15, was initially sparked by suspicions that waste discarded by PT Chell Samsung Indonesia (PT CSI) has led to the decline of the shrimp population around Rejoso, in Pasuruan, East Java. However, after 60 demonstrators were interrogated, there was ground for suspicion that a third party was taking advantage of the situation. It turned out those who were interrogated were from elsewhere.

The Pasuruan incident gives reason for apprehension because, aside from upsetting public order, it could negatively effect the preparation for the onset of free trade.

To offset rising labor costs in their countries of origin as well as with an eye on the availability of raw materials, many developed countries are looking for new sites to locate their plants. Industries are relocating from the developed countries to the developing.

The major considerations when deciding on a suitable location are the availability of skilled labor at relatively low cost, the availability of raw materials, a suitable communications infrastructure, transparent and consistent policies and a lenient taxation system. However, all these advantages are ineffectual without political stability and the guarantee of security.

What happened at PT CSI could be bad press for Indonesia as a potential site for industrial relocation. This is all the more true because PT CSI is part of a large global enterprise and whatever befalls it could swiftly become known to other major corporations.

-- Suara Karya, Jakarta