INDONESIA COUNTRY REPORT

Based on conference presentations
by Ludfy Baria
Kelompok Kerja HUMANIKA
Muhammad Husni Thamrin
Yayasan Maju Hersama 



  INDONESIA implemented the "New Ordér Policy" in 1970 to attract capital investment from abroad and to encourage domestic capital investment. Companies, mostly from South Korea, Japan, Taiwan and Hong Kong, have invested to take advantage of Indonesia's low production costs and unfulfilled export quotas. 

  Since the introduction of the new policy, Indonesia experienced a 194% increase in foreign investments. And in 1993, as part of the GATT/APEC negotiations, it elimined all restrictions on foreign investments.      
 Indonesia's first EPZ, Nusantara Bonded Zone (KBN), was opened in Jakarta (West Java) in 1986. The Surabaya Industrial Estate Region (SIER) was established in 1991 in East Java. Later that year, a third zone, PIER, was built in East Java. The fourth, the Batarn Industrial Zone, is also located on East Java. 

    Most of Indonesia's EPZ factories produce garments and shoes. The EPZs also contain some "bonded zones" in which storage, wholesale, and re-sale activities can take place duty-free.  

        Corruption is a major problem in the EPZs, especially in the bonded zones.     

     EPZ women workers endure intolerable working conditions and long working hours. Indonesia's minimum wage, which ranges up to US$1.84 in some regions, meets only 60-70% of the minimum physical needs of one person. Meanwhile, the price of basic goods and fuel widely fluctuates.   

       Indonesia's industrial relations are carried out within the framework of Pancasila (joint consultative problem -- solving) to obtain solutions for the good of all participants and the nation. Under this system, the Indonesian government recognises only one labour union -- the All-lndonesia Workers' Union (SPSI) and bars the establishment and activities of any others.    

      Many of the leaders of the independent trade union SBSI (Indonesian Prosperity Trade Union), formed in April 1992, have been jailed. SBSl's Chairman, Muchtar Pakpahan, was sentenced to four years in jail in the wake of the Medan riot in April 1994. But the government is reluctant to close down the union altogetherbecause of international attention.   

       Since unionisation is so heavily repressed, workers usually organise 
strikes with the help of NGOs. It is against the law for EPZ workers to receive assistance from labour organisations. Organising campaigns take place in the communities and then move into the factories.  

        Last year, amid intenational criticism of Indonesia's labour practices, the Labour Minister, Abdul Latief, revoked a law that allowed employers to call in the army to deal with strikingworkers. Nevertheless, military intervention is still com mon and widespread. In fact, figures from a labour organisation based in Surabaya indicate that military intervention in la bour disputes in East Java has increased from 61 percent in 1991 to 85 percent in 1994 .

    EPZ workers are becoming more bold and militant and industrial actions are becoming more common. In 1994, workers held 314 actions compared to 183 in 1993 and 155 in 1993 . Large numbers of workers have been involved (the largest action in volved 8,000 workers).  

         Women workers comprise 80 - 95% of the workers involved in the actions. They also form a majority in the representative bodies elected to lead these actions.      

     Workers have been seeking improved pay and working condi tions, freedom of association, and praying time. They have also been demanding gender-specific measures to combat sexual harassment and gender discrimination and to obtain maternity and menstruation leave as required by existing law.  

       The three months of fully paid maternity leave are rarely provided by EPZ employers. Women are usually dismissed when they are found to be pregnant. Even when they are allowed to return to work, they lose their seniority and have to start from the bottom. As for the two days per month of menstruation leave to which they are legally entitled, "a woman has to literally take off her underwear to prove that she is menstruating." Even if allowed to leave, she will lose her bonus for the month or the week, or she may simply lose 2 days' wages.   

      Workers have held demonstrations at the Local Council of Representatives and at the LabourDepartment. They have also occupied Labour Department offices.  

       At one point, workers were so desperate that they held a company lawyer hostage until the company agreed to their demands. Whereas in the past labour action would follow work-shift patterns, recent actions have lasted for up to 54 hours. Workers have also become more courageous in facingthe police and military that are sent in to quell their actions/demonstrations .

         Since unions are not allowed in the EPZs, there is no institutionalised form of collective bargaining. A "group of workers," usually organised by NGOs, take the initiative and negotiate with management. It they are able to negotiate better wages or working conditions, all the workers in the factory benefit. 
 
           
          



AT A GLANCE


                       

FREE TRADE ZONES


East Java: Pasunuan Industrial Estate Rembang (PIER), Berbek FTZ, Gresik FTZ 


Jakarta: Nusantara Bonded Zone 


Batam: Batam Industrial Zone 



Growth Areas: Singapore-Johor-Riau Growth Triangle, Indonesia-Malaysia Thailand 


Growth Triangle, Bnunei-lndo nesia-Malaysia-Philippines EastASEAN Growth Area (BIMP-EAGA), and AFTA 



MINIMUM DAILY WAGES 










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