Labor Unions

August 15th, 2007, in Business & Economy, by Patung

Indonesian labor unions are too militant.

Jusuf Kalla, whose job as vice president seems to consist in him going about the country opening conferences, is rarely lost for words on any subject, and in contrast to the platitudes of president Yudhoyono, nearly always manages to say something interesting. He did so again on 9th August after meeting leaders of the Confederation of the SPSI (Serikat Pekerja Seluruh Indonesia, All Indonesian Working Peoples’ Union).

Jusuf Kalla, fount of wisdom.

In the hopes that Indonesia would be able to attract more foreign investment Kalla advised the representatives of the workers to cut back on the radicalism front, and reduce the number of their protests and demonstrations. The demos often ended violently, he said, and caused foreign investors to often ask Kalla whether the law was upheld properly in Indonesia.

Storming the gates.

Head of the SPSI, Syukur Sarto, answered Kalla that demonstrations were caused by workers’ fears of losing their jobs, and hoped that regional agencies could be set up to oversee issues of employment and job loss. [1]

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Tags: Investment

11 Comments on “Labor Unions”

Sylvester Says:
August 15th, 2007 at 4:54 pm
Head of the SPSI, Syukur Sarto, answered Kalla that demonstrations were caused by workers’ fears of losing their jobs, and hoped that regional agencies could be set up to oversee issues of employment and job loss.

SPSI is right. There is no law to protect labors in Indo.
However, on the other hand there is also a problem with the indon worker mentality. Many of them are lazy.
Arema Says:
August 15th, 2007 at 4:58 pm
JK has a very good point there… workers in Indonesia often think they’re the BOSS. Big companies simply can’t allow strike(s) and shutdown(s) disrupting their schedule, because a day, or even an hour(!) lost can cost millions of dollars!

I personally think that employees in Indonesia often took the violent path to solve problems, and not opening a discussion. They didn’t put themselves in the employer’s shoes and observe from the other point of view, but only forcing what they want, often blindly.

If I’m a foreign employer / investor, I’d be happy to consider setting up a company in Indonesia because I can save a lot of cost there, and also the huge market. But if I know that my company had 10% chance of instability, uncontrollable labor, strikes, or worse, burned, I’d rather not. Remember that Indonesian workers are among the least skilled compared to their SE Asian counterparts and India, but ranked high as potential trouble-makers.

Without a solid foundation, a company will have difficult time moving forward. And one of those foundation is dependable and loyal employees.
Aluang Anak Bayang Says:
August 15th, 2007 at 5:09 pm
Friends, all works and no play makes Ali a dull boy.
Aluang Anak Bayang Says:
August 15th, 2007 at 5:10 pm
And, All play and no prayer makes Achmad an unclean man.
Pena Budaya Says:
August 15th, 2007 at 7:09 pm
The problem is that government is still depending on Foreign direct investment so much. This type of investment can go easily at anytime to anyplace when there is lower offer of production cost. And, the lower production cost that is being offered very much often creating other social problems such as the sweatshops, child labour, feminization of work that mostly neglected the fundamental rights at workplace.

We should be happy that trade unions/ labour unions in Indonesia keep active and reminding us of the problems that still suffered by most working class. Currently the trade unions’ activities in Indonesia are not widely published in the headline of newspaper in Europe. Mostly headlines in Europe nowadays about terrorism, Islam fundamentalism movement in Indonesia, corruption, stupid bill like Anti Pornography Action, and of course: flood, floods, floods…

How come Indonesia will ever attract foreign investments if almost all areas in the capital city is flooded for days???
KSJ Says:
August 17th, 2007 at 5:58 pm
It is time for the Indonesian government to improve the labor conditions in Indonesia so that no foregin investors would be needed in the future. Let’s stand on our own feet. Those foreign companies will stay in Indonesia as long as the labor cost is low and unskilled workers are abundant. Otherwise, they will move out to another country. We should not depend too much on foreign companies to provide us jobs, we should create them ourselves and for our people.
Falcon Says:
August 18th, 2007 at 12:32 pm
The head of SPI is afraid workers of loosing jobs?. He must understand that the law demand and supply ruled the labor force. Too many workers fighting for the same bowl of rice. If we can export 50% of of all the workers maybe the head of SPI should not worry that his workers are losing jobs. You fire 1000 workers today, 5000 applicants will appear for the job tomorrow. If you have just enough and productive workers, employers will take care of their employees better.

As long there is an oversupply of laborers with low skill, nothing will change and we all should be reminded that workers in large force can easily provoked when even their voice is not heard. Maybe the law is unfavorable while the work force is too destructive that no one wants to invest here. The world need not to be reminded that Indonesia is considered as a low priority country for investment despite all its potential.

When counting all the cost of employing workers and the inefficiencies which are considered high already, any disruption of the work activity because of demonstration will add-up and will likely to cost more compare to other nearby countries. In additions the current social cost maintaining workers in the long run is exorbitantly expensive.

Indonesia will never solve its labor problem, unless the labor supply is drastically reduced (pessimistic), and the existing labor law abolish and replace with labor insurance beside the existing Social insurance. So in the eye of the employers, any worker(s) not complying with the company policy can be fired (without demonstration) however has the right to have his case reviewed by the labor judicial review. The insurance will pay for all the related cost and reinstatement is done when wrong doing is not found

If the head of SPI is afraid that workers might lose jobs, he must be equally convince that corporations will and can continue to operate as a going business concern. A corporation is considered as a going concern, not a stop and go concern.. There is a need to understand that new investment has a muliple effect thus more new business will follow.

At this moment having a job is a priority at any cost and anything else is less important. Look, some many are people hanging around the streets doing nothing or very little to do. What is the point of having a favorable law when the unemployment is extremely high. The priority mus be set. The politicians are filibusters, they have all the time in the world for doing nothing and still get paid handsomely

Indonesia should not be famous for its constant demonstration at the center of town and created all sorts of traffic jams and commotions. May be an open field of 20 hectares or more and at each provinces is set aside, far away from the city where demonstration can take place without any anarchy and not disrupting the already crowded city and burdening additional unnecessary expenses to other activities business or not.
Sputjam Says:
August 19th, 2007 at 3:00 pm
Malay types do not understand economics. In bintan and batam, foreign investors closed plants because local government started local taxes which is too much.
Malay workers comes to work whenever they like. No inhibition on the repercussion that they may cost in terms of down time or delays.
To improve employment rate, I suggest government start the ball rolling by spending money in infrastructure projects, say Pan Java highway and railway.
Hopefully in ten years time, Indonesian will be more knowledgeable in terms of work discipline.
Naga Says:
August 20th, 2007 at 1:58 pm
“Malay types do not understand economics. In bintan and batam, foreign investors closed plants because local government started local taxes which is too much.
Malay workers comes to work whenever they like..”

How true, until Malays accept the world does not OWE them a living, then their economic fortunes will never change.

No country in the world can survive without FDI, this ridiculous notion that ‘we must stand on our own’ is pure fantasy and it is Indonesian employers who exploit Indonesian workers the most; foreign companies actually have to abide by rules imposed by the xenophobic govt as well as corporate governance principles from their own countries (unless they are Chinese, Indian or Arab).

FDI helps this country, it is political and systemic corruption which is killing it, not foreigners…
Rommel Gaspar Says:
January 24th, 2008 at 3:52 pm
I am an expat teacher here in Jakarta. I’m a victim also other international schools who breach the labor law in Indonesia. But in still hoping that I can attain the justice here in jakarta.To the labor Unions here in Indonesia pls. help me and support for what I am encounter here right now. I will have my mediation this coming 29th of Jan,2008. More power to all of you.
Sagiputra Says:
March 3rd, 2008 at 3:58 pm
I have read an opinion in Kompas written by Herry Priyono on Indonesian Future Leadership. He said, that Indonesian leaders (president and vice president) have to come from “inter-sectoral leadership”, not like Kalla (our present vice president) who just think from one side mindset, it is entrepreneurs side. It is clear from his statement on Indonesian Labor movement above. He never thinks or asks, why the workers’ demos often ended violently? I can understand his statement because he is an “entrepreneur vice president” not a “worker vice president”. I believe, Mr. Vice president will change his mindset, his words, and his action, if he just a day become a worker in Korean garment factory in Cakung Industrial bonded zone. The workers always “Kalah” in hand Mr. Kalla.