Workers need to better their bargaining power

Workers need to better their bargaining power

By Tjipta Lesmanaa

JAKARTA (JP): The current picture of Indonesian workers is not
that encouraging. Of the 90 million-strong workforce Indonesia
currently has, roughly 60 million are engaged in the formal
sector as well as in the informal sector. Forty million of them
earn only Rp 150,000 to Rp 200,000 per month, far below the
poverty line set by the National Statistics Bureau.

Of the remaining 30 million, 20 million are categorized into
disguised unemployment or those who work less than 35 hours per
week. Adding to this is the bleak figure of 10 million
unemployed, up from six million registered before the economic
crisis in late 1997.

Labor costs in Indonesia are, undoubtedly, the cheapest among
ASEAN countries. It is only 5 percent to 10 percent of total
production costs, while the average figure in ASEAN countries is
estimated at 25 percent. Labor costs in industrialized countries
can be up to 40 percent of total production costs.

Previous governments gave themselves a boost with the cheap
labor costs. It was conceived as one of the comparative
advantages Indonesia could use to attract huge foreign
investment.

Two main reasons are attributable to the cheap labor costs in
Indonesia. The first is that it is part of the wholescale red
tape system. Secondly, it is part of the government's strategy to
lure foreign capital. Neither of the two factors are, however,
worthy of appreciation.

Employers in Indonesia cannot afford to pay their workers well
since they, more often than not, have to pay "fees" to various
government agencies.

Such "fees" are widely seen as a normal practice in
bureaucrat-business relationships. Considering its status as one
of the most corrupt nations in the world, practices of this
nature are very high indeed.

The amount paid by companies for this purpose is, according to
Agus Sudono, former national trade union (SPSI) chairman,
estimated to be no less than 10 percent (of total production
costs).

The payment of these "fees" is needed to facilitate the
procurement of licenses, and in supporting the employers from any
"harassment" by the workers.

Collusion between employers, bureaucrats and security
officials is deemed crucial in setting up peaceful conditions for
production activities. Consequently, workers are paid only 60
percent of their real wages, while the remaining 40 percent goes
to numerous government officials.

Another bleak figure regarding the labor force in Indonesia
involves its quality aspect. Of 90 million people eligible to
work, more than 55 percent are just primary school graduates.
Many of them have not even finished their primary school
education. Those who attain university education are no
more than 10 percent. Efficiency and productivity across business
lines is conceivably very low.

Those various factors mentioned above are contributing to the
weak position of Indonesia's workers. They have the lowest salary
scale among ASEAN countries. They are weak in bargaining with
their bosses, who can, at any time, dismiss them with no serious
legal consequences. They are reluctant to bring their fate to the
attention of the officials at the manpower ministry because the
latter is too concerned with businesspeople (the ministry
supports the employers as they get money from them).

And finally, unlike their comrades abroad, they have no power
to use strike mechanisms to pressure the employers.

The history of trade unions in Indonesia is marked by heavy
political influence. Put another way, political parties in the
past capitalized trade unions to sell and win their platform.
That was one reason why all political parties in the past set up
their own trade unions. By the time former president Soeharto
seized power from Soekarno in 1996, there were about 23 trade
unions in the country.

As a four star general, Soeharto ruled the nation with an iron
fist giving no room to freedom of any sort. He claimed to be
anticommunist, though. But his regime was, as a matter of
fact, patterned on the communist regime.

Uniformity is one of the styles of the communist regime
everywhere. Being aware that the political stability could be
threatened by labor issues, he instructed his manpower minister
to squeeze the 23 trade unions and blend them into one
organization.

The motive behind this policy was easy to grasp: to
effectively control the trade unions. That was the beginning of
the Indonesian Trade Union Federation (SBSI), set up in February
1973.

Under Admiral Sudomo (as manpower minister), however, SBSI was
dissolved and changed into the Indonesian Union of Workers (SPSI)
which was unitary in its form. Sudomo was previously supreme
commander of the powerful security agency Kopkamtib.

Like his mentor (Soeharto), Sudomo was a fierce and ruthless
despot. Obsessed by the "efficiency" of armed forces
organizations he altered the status of the trade union from a
federation to a unitary body.

The move, however, aroused criticism from abroad. Fearing the
criticism would endanger the business climate, Sudomo loosened
his grip just before his term ended by agreeing to change SPSI
into FSPSI (Indonesian Union of Workers Federation).

As Soeharto was beginning losing his grip on power, pressure
to crack down on the monopoly of the trade union was mounting.
Mochtar Pakpahan was the first intellectual who persistently
fought for the setting up of an alternative trade union. His
efforts were fruitful when the Indonesia Prosperity Trade Union
(SBSI) was established in 1997. Pakpahan's popularity, at home as
well as abroad, was even greater when the regime managed to have
him sent to jail.

The movement of Freedom of Association for workers entered a
turning point when the Soeharto regime was toppled in May 1998.
Under heavy pressure from industrialized countries, Indonesia
finally ratified the International Labor Organization (ILO)
Convention No. 87 (on Freedom of Association).

Room for establishing alternative trade unions was widely
opened by the government act. Indonesia suddenly became the only
country in the world with the most number of trade unions: 17.

Freedom of association is, indeed, important in upholding
workers' bargaining positions. But concern is mounting that the
exercise of such freedom would only bring chaos without a clear
ruling.

There is an urgent need to reform the legal system following
the ratification in 1998 of ILO Convention No. 87 by the House of
Representatives (DPR). The only ruling on trade unions until now
was the manpower minister's Decree No 5/1998 which just covered
the registration mechanism of trade unions. It was very limited
in its scope.

The need for a law specifying conditions for setting up trade
unions is very urgent. Is just about anyone free to form a union?
How do the workers stage strikes and how do they reach a
compromise when there is more than one union in their work place?

Without such a ruling, the existence of so many trade unions
would only harm the workers. The right to stage a strike is also
in need of a ruling. Production activity would, undoubtedly, be
obstructed if every worker's petition of was channeled through a
strike.

Each employee should bear in mind that the employer is
his or her own partner in bringing about his or her prosperity.
Without the owner, and an undistracted production process, any
talk about prosperity makes no sense. Hence, both sides have to
work hand-in-hand and respect each other as human beings in need
of a decent living.

The position of Indonesian workers in relation to their
employers during the past 30 years is, indeed, very fragile. They
have low salaries, low levels of education, a weak bargaining
position and no freedom of association.

Hopes were in the offing recently thanks to the political
changes following of the demise of Soeharto. To seize the new
momentum, the government should immediately bring in new laws to
make it possible for workers to exercise their freedom of
association and to set up a mechanism to solve industrial labor
disputes.

It is also high time for labor union leaders to increase their
knowledge and skills, especially in the leadership arena, in
order to strengthen their positions. The ILO could play a
substantial role in this regard.

The writer is a columnist and lecturer at the political and
social sciences department of the University of Indonesia.