Workers still marginalized

Ridwan Max Sijabat The Jakarta Post Jakarta

In the new global economy, multinational corporations contract with firms all over the world to manufacture their electronic parts, their garments, foods and beverages, furniture, toys or footwear. The labels on goods used by those living in luxurious apartments or the uniforms or shoes used by famous football and basketball players at international events tell us they were "Made in China," "Made in Thailand," "Made in Vietnam," or "Made in Indonesia."

Consumers frequently feel proud of using products with famous labels such as Nike, Reebok, Ligna, Sony, Samsung, Levi Strauss and Swan, or drinking Lipton, Fanta, Coca-Cola and other international products but they seldom stop to think about what such labels means.

One of the most notorious multinational corporations that makes contracts with local manufacturers in Indonesia is Nike, the U.S. footwear manufacturing company has contracts with at least 14 local companies in Indonesia.

The usage of Nike footwear in the 2000 Sydney Olympics sparked a strong protest from numerous human rights groups and labor activists because of the poor condition of workers employed by its partner or manufacturing companies in Tangerang, Banten. The protest followed a wave of industrial strikes staged by workers in 1999 who were paid between US$33.80 and $39.40 per month, or a little more than $1 per day.

According to data at the Manpower and Transmigration Ministry, Nike was only one of around 60 manufacturing companies failing to pay attention to workers' basic rights between 1999 and 2002. This figure is far too low if compared to labor conditions during the New Order era.

Besides the increasing demand for the basic rights of workers have cause them to frequently go on strike or stage rallies in front of government offices and the House of Representatives building to protest against low wages, arbitrary dismissals, transfers and insurance protection.

All these problems have come to a head because the workers could not adequately meet the increased cost of living and other secondary and tertiary needs, and were treated inhumanely despite the entrance into the supposed reform era.

Very few industrial disputes occurred between employers and workers during the 32-year New Order era, because workers were controlled by former president Soeharto's repressive and militaristic-style regime. Not only that, the police and military were deployed to handle industrial disputes in companies and only one workers union Serikat Pekerja Seluruh Indonesia (SPSI) was allowed to represent workers in negotiations with employers.

Soeharto, who made an economic policy based on growth, was trying to attract as many foreign investors as possible but adequate attention was not given to improving the poor labor conditions while the annual economic growth of 7 percent greatly enriched a small group of conglomerate owners, mostly from the Cendana clique.

SPSI, which was ironically dominated by the then ruling party Golkar, had rarely, if ever, paid attention to improving the poor labor conditions, but instead focused on pushing all workers to support Golkar at ballot time to defeat the only other two legal parties at the time, the United Development Party (PPP) and the then Indonesian Democratic Party (PDI) in six straight general elections.

The Indonesian Prosperous Labor Union (SBSI) led by Muchtar Pakpahan contributed slightly by countering SPSI, but their struggle got him and his fellow labor activists a one-way ticket prison. Even, H.J.C. Princen, an Indonesian of Dutch parentage and former war veteran in Indonesia, was once sent to jail and several times tortured for advocating on behalf of workers in the 1980s.

All this social, political and economic background has given birth to an extreme proliferation of labor unions following the downfall of Soeharto on May 21, 1998. At present there are at least 64 labor unions, in the forms of federations or confederations and at the company-level.

"The mushrooming of labor unions has a lot to do with the reform euphoria brought in by former president B.J. Habibie who ratified ILO Convention 87 on freedom of expression and ILO Convention 98 on freedom to unionize. Consequently, we made Law No. 21/2000 on labor unions giving a guarantee for workers to set up their own union," Minister of Manpower and Transmigration Jacob Nuwa Wea told The Jakarta Post in an interview here recently.

Jacob predicted that the reform euphoria would last for a long time since the fate of workers had yet to be give adequate attention from the government and other relevant institutions. "The current situation will likely last for the next ten to fifteen years, or until the workers have strong bargaining power in negotiations with employers and investors," he said.

He denied that the recent relocation of many foreign companies to Vietnam and China was related to those countries alleged poor treatment of workers and their pro-labor laws. He said Sony Electronics closed down its factory in Indonesia, not because of the labor disputes, but because of worker inefficiency. PT Doson and Nike said their relocation to Vietnam and China was because of their inability to pay their workers the new, government- mandated minimum wages.

"So far, there have been no foreign investors who have relocated to other countries because of the labor unrest," he stated.

Jacob, also chairman of the Confederation of All Indonesian Workers Union (KSPSI), many investors have complained about the poor climate for investment in Indonesia because of general security, rampant extortion, rising inflation and, the last, was labor disputes.

Many foreign investors with palm oil plantations in Sumatra, Kalimantan and Sulawesi left because of the rife theft of profits and rampant extortion by security personnel, while many leather and footwear companies have gone bankrupt because of the banning of leather imports or the rising prices of raw materials. Therefore, he said, all these problems should be blamed, not on his ministry, but the trade and industry ministry, he said.

"Speaking frankly, no workers acquire big assets or become rich because of high wages. The highest minimum wage at present is around Rp 700,000 per month. A single worker cannot live humanely and meet his/her basic needs and rent a small house with such a monthly payment. The irony is that investors have never disclosed to the public on the huge amount they have paid to corrupt officials for certain facilities and for security.

"Do you believe that PT Freeport does not pay security authorities? Are you sure that PT Caltex in Riau and ExxonMobil in troubled Aceh and other giant companies do not pay a huge amount of money for their security. I personally don't. But what's happening is that these employers have charged this security money to the labor cost, a similar practice was done by investors during the New Order era," said Jacob who was once a manager of private company in Jakarta.

Jacob who was born in Flores, East Nusa Tenggara, insisted that Indonesia could no longer maintain the cheap labor policy to bring in foreign investors to invest in the country. Investors should hold the principle of "business is business" but doing business in the country should comply with the law and respect democracy. "Indonesia would continue lagging behind and workers would eventually become backward and uneducated if the old practice and labor policy was maintained," he added.

Asked about the current program, he said he was trying to encourage labor unions to provide training programs to improve their members' skills, not only in their work places but also in negotiations with employers.

"With such training programs, labor unions will become more professional and they are expected to share a common awareness that they will be getting stronger only if they are united or merge into two and three confederations in representing workers. But this will take more time," he said.

He said that of the 64 labor unions registered with the Manpower and Transmigration Ministry, only around ten had more than one million members, including KPSPSI, SBSI and workers unions in state-owned companies.

Besides developing a strong labor movement to support democracy, he is trying to review old labor laws to help improve workers' social welfare. "So far, the government has made a new law on labor protection regulating industrial relations between workers and employers. The law which has yet to be enacted by President Megawati Soekarnoputri also accommodates a major part of the prolabor Ministerial Decree No. 150 on severance and service payments for dismissed workers."

The law also demolishes the ministerial decree's rule requiring employers to pay severance and service payments for resigning workers and those committing crimes in their work place. Besides, the law regulates sensitive issues such as labor strikes, general rights, menstruation leave, outsourcing and annual and sabbath vacations.

"The other important thing is that employers will think twice before committing violations because the law threatens harsh sanctions and fines against them," said the minister.

Jacob said the government and the House of Representatives were making a final touch to the bill on settlement of labor disputes stipulating the establishment of labor court to give a legal certainty for workers in dealing with disputes with their employers.

"The two laws will be quite strategic to improve the poor labor condition so that they will no longer be marginalized. My obsession is that workers will play an important role in developing the country, upholding the democracy and bring the nation into the modern industrial era," he said.

Jacob, also an executive of the Indonesian Democratic Party of Struggle (PDI Perjuangan) that gave him his current job, conceded that he still had a headache in handling the unemployment problem since the number of jobless has significantly reached 40 million, many of whom are university graduates.

The Oct. 12, 2002 Bali terror bombs, the U.S.-led regime change in Iraq and the Severe Acute Respiratory Syndrome (SARS) epidemic have added to economic constraints, in addition to the low quality of workers, for the government to send as many as possible job seekers overseas.

"The Bali blasts have made foreign employers unwilling to employ Indonesian male workers, the war on Iraq has caused Middle East countries to suspend the import of foreign workers and the SARS epidemic has forced us to suspend the labor export to Hong Kong, Taiwan, Singapore and Malaysia," he said.

He said all these problems would be temporary and he was optimistic that the planned reconstruction in Iraq would need workers from Indonesia and other Gulf states would resume their labor imports from Indonesia since the fighting in Iraq was already over.

"We are using this time to press labor export companies to intensify their training programs to improve the skills of workers before they are sent overseas. This will improve the workers' bargaining power," he said.

He meanwhile said the government would also continue to review its economic policy to continue luring foreign investors to invest in the country in an attempt to create more job opportunities to cope with the unemployment problem.