COUNTRY REPORT - INDONESIA

(To fulfill pre-requisites of ITC-ILO/ACTRAV TRAINING COURSE

A3-51642: Trade Union Training Freedom of Association (FoA), Organizing and Collective Bargaining in the era of Globalization)

Bangkok, Thailand November 19^th ~ November 23^rd, 2007

Reported by Vonny Diananto – Confederation of Indonesian Trade Union (CITU/KSPI) _________________________________________________________________________

v  ORGANIZATIONAL BACKGROUND

Confederation of Indonesian Trade Unions - CITU (Kongres Serikat Pekerja Indonesia - KSPI) was declared and established on February 2, 2003. 

The Executive Board of KSPI (2007 – 2011):

·         President                           :           Thamrin Mosii

·         General Secretary              :           Rusli Yunus

The organization structure of KSPI:

·         National Convention

·         National Council

·         National Executive Board

The National Executive Board has 6 departments, which are:

1.      Department of Organization Development and Publication

2.      Department of International Relation

3.      Department of Education, OSH and Environment   

4.      Department of Economy, Wages and Social Security

5.      Department of Industrial Relation, Law and Advocating

6.      Department of Research, Productivity and Development

Membership of KSPI:

There are 11 Federation has affiliated to KSPI:

1.      PB PGRI (Teachers)

2.      SPN (Textile, Garment & Leather)

3.      FSP Kahutindo  (Wood & Building)

4.      FSP KEP  (Chemical, Energy & Mining)

5.      ASPEK Indonesia (Economics & Finance)

6.      FSPMI (Metal)

7.      SP PPMI (Press & Printed)

8.      FSP ISI (Indo Cement)

9.      FSP Farkes Reformasi(Pharmacy & Health)

10.  FSP PAR Reformasi (Tourism)

Total membership (2005-verified): 793,874 – 2^nd largest Trade Union membership.

v  NATIONAL SOCIO-ECONOMIC SITUATION

Background

There has been a lot of work to do by the government because as the big fifth population country-Indonesia has big challenge to improve quality in social and economic spectrum. Indonesia is categorized in the worse growth in South East Asian countries. 

There are some causes of above conditions.  One is very low investment from foreign country. It may be more interesting to invest in China or Vietnam.  High quality and low labor cost is one of the reasons.

Please see below figures about Indonesia situation:

 

Another causes are gap between demand and supply of labor made the strong competitiveness. All those conditions affected to national social and economic condition such as: about 30% of people are living below the poverty line.

Since the financial crisis in 1997, Indonesia’s economy has suffered from low economic growth and high unemployment.

Youth, Women and Migrant Workers

Unequal labor market access in Indonesia shows difficulties of young people and women to get job. Young people and women are more frequently found in irregular & casual employment and also in informal economy. Women are concentrated in informal employment relationships, and in the low-pay and low-skilled jobs in the formal economy. There is a substantial gender wage gap and discrimination in employment. Poor economic conditions have led to further deterioration in the situation of women workers in Indonesia. There is discrimination for incoming tax; there is no deduction wages for married woman and having child.  

The number of Indonesians seeking the works overseas has grown rapidly in the past ten years. Official figures suggest that the number of workers migrating each year rise from less than 90,000 in 1990 to an average of 375,000 per year between 1996 and 2002. The huge growth in migration has been spurred by very high unemployment at Indonesia, and low earnings opportunities. Indonesian Government is ignoring its responsibility to create a domestic economy that can generate jobs for the country’s workforce.  A review of employment policy and the role and management of migration within that policy is urgently required.

v  SOCIAL DIALOGUE AND COLLECTIVE BARGAINING

Indonesia has tripartite mechanism in National, Province and Regional Level to discuss any relation of Labor and economic situation. For example: Regional/Province Sector Minimum Wages discussed in Province/Regional Wages Council.

Unions have the right to collective bargaining, but article 119 of Labor Law Act states that a union must recruit more than 50% of the total workforce in the enterprise, or receive more than 50% support of all workers in an enterprise in support of the union’s demands. Only plant level unions have the right to collective bargaining but not federations and confederations. We do not have Collective Bargaining at national level. It will be better if there are mechanism to have discussion between Trade Union and members of Indonesia Chambers Association (KADIN) such as: Sector minimum wage. For example: Minimum wages for Metal Industry can be discussed between FSPMI/LOMENIK/LEM and GAIKINDO/GABEL. This consultation forum can produce any collective bargaining in National Framework Agreement.

v  ORGANIZING

Indonesia ratified ILO Convention No. 87 on Freedom of Association and Protection of the Right to Organize in 1998 and ILO Convention No. 98 on the Right to Organize and Collective Bargaining in 1957.        The ITUC affiliates in Indonesia; Confederation of Indonesian Trade Unions (KSPI/CITU) and Serikat Buruh Sejahtera Indonesia (SBSI) figures indicate that 3.4 million workers are unionized, which constitutes 4% of the total workforce and 14% of those employed in formal work.

The Trade Union Act allows workers in the private sector to organize, but trade unions have to register with the Ministry of Manpower in order to be recognized. Trade unions can be formed across sectors and nationwide.  The union has to keep the government informed of nominations and changes in their governing bodies.

Preventing a worker from joining a union is subject to a fine or imprisonment. However, anti-union discrimination is widespread in practice as legal procedures are very lengthy, sometimes taking up to six years and corruption of judges is a problem. Consequently when workers try to set up unions, frequently companies either terminate their employment or demote union leaders and members. There have also been attacks on trade union organizers by the military and police, paid for by employers.

Increasing of Foreign Investors is one focus of government policy in economic sector to reduce unemployment rate. Government will apply SEZ (Special Economic Zone) in some Industrial area such as: Batam, Bintan and Karimun. This policy will make more difficult to organize unorganized workers. Increasing number of irregular workers (temporary workers and outsourcing workers) also big challenge for trade Union movement in Indonesia. Section 59 of the Labor Law allows for contract labor if work is temporary in nature, but employers often violate this provision. A common practice is to declare bankruptcy of a company and then reopen after a few days while only hiring workers on a contract labor basis. This is done with the apparent approval of labor dispute settlement committees. Recent factory closures in the electronics in Bekasi (MTPDI and PEDIDA) led to job losses for 2,670 workers, with many more possibly to follow.

v  3 TOP PRIORITY AREAS FOR FUTURE ACTION TO PROTECT WORKERS’ FUNDAMENTAL RIGHTS 

1. Reform of Social Security System or JAMSOSTEK (Act No. 02/93).
2. Legislation on collective bargaining, which is too restricted right now, should be brought in line with the Convention and also allow for bargaining at sectoral and  interprofessional level.
3. Reduce the gender wage gap and discrimination in employment. Marriage women workers are apply for deducting wage.