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A balance on labour rights

Publication Date : 01-05-2012


It is a universally accepted economic principle that business owners always want to reap as much profit as possible by means of, among other things, pressuring the costs — particularly labour costs — to the very minimum. It is, of course, completely within their rights to pursue maximum yield from their businesses, so long as they are in line with existing laws and regulations.

Business ethics, however, do not only revolve around profit-and-loss considerations, as they also involve non-technical aspects that are equally decisive in determining the success of a business. In reality and practice, business owners cannot neglect the fact that in order to grow and develop, they must not and cannot rigidly practice economic principles alone, and have to consider the sociocultural and socioeconomic aspects of the labour force as key elements of their business.

The annual commemoration of the International Workers’ Day, popularly known as May Day, which falls today (Tuesday), is expected to see massive rallies by thousands of workers from Greater Jakarta and should therefore serve as a reminder that problems remain with our labour system. It has widely been reported that there are two areas of concern where Indonesian workers are still demanding improvement — decent pay and legal protection for all workers.

Managing labour issues, including the welfare system for workers, in a highly populated country such as Indonesia, is indeed not an easy task. The government is correct in its decision to temporarily maintain its “labour intensive policy” for the country’s industrial and manufacturing sector while awaiting the availability of infrastructure and the Indonesian labour force’s readiness to adapt to and catch up with continuing advancements prior to completely converting to technology- or machine-based industry.

Managing such a “labour-intensive” industrial and manufacturing sector needs more than a mere profit-and-loss calculation as it also involves “human beings”, unlike “robots” that can and will always be ready to perform the tasks without complaint. It is in such a unique condition of our industrial and manufacturing sector that doing business in Indonesia will always need more “talks” than “acts” so as to ensure smooth and long lasting progress in the sector.

One good example of how a failure in pursuing talks has a huge impact, not only on the industrial and manufacturing sector, but also the entire population, was the massive strike by workers in Bekasi in February, demanding an increase in the region’s minimum wage. They staged a rally and blockaded the Cikampek toll road, which subsequently triggered massive traffic jams in other toll roads across the capital city. The blockaded toll roads and ensuing rallies in front of the Presidential Palace eventually undermined political stability in the capital — and could have affected the entire country if they were not dealt with on time.

In two renegotiations facilitated by Coordinating Economic Minister Hatta Rajasa and the Manpower and Transmigration Ministry, respectively, employers and union delegates eventually agreed to raise the minimum wage to 1.8 million rupiah (US$203.4) from the governor-approved 1.3 million rupiah ($141) mark in Bekasi, while the minimum wage in two other industrial regions of Tangerang and Serang was agreed to be set by the government at a later time.

Learning from the experience, the government and employers should therefore pay more attention to workers’ demands. It is true that not all of their demands can be met, especially in regards to the employers’ individual financial capacity to meet the worker-demanded welfare scheme.

The presence and role of such tripartite forums should therefore be enhanced so that all welfare-related problems and labour disputes can be settled at the “negotiation table” rather than during risky “street rallies”.


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