Tens of thousands of factory workers took part in a general strike across Indonesia on Wednesday, calling for higher wages, more social security and an end to employers’ use of temporary contracts to circumvent the country’s strict labour laws.
Many factories in Indonesia’s industrial heartland around Jakarta closed for the day as trade unionists gave fiery speeches to massed ranks of uniformed workers.
“There are many cases where employees can work for five years without being given any proper rights,” said Widyantoro Setya Purwandaru, a 32-year-old quality assurance clerk, as he picketed the Yamaha piano factory in Pulo Gadung, East Jakarta, along with hundreds of his colleagues. “The government must do something about this because the gap between the rich and poor is getting wider and this will create social jealousy.”
Although Indonesia’s economy, south-east Asia’s biggest, has grown rapidly over the last decade, social inequality has also risen.
Meanwhile, trade unions have become increasingly combative, threatening to undermine attempts by the government to turn Indonesia into a key regional manufacturing hub.
There have been dozens of major strikes this year, including a number where workers have been taken hostage by strikers demanding better pay and conditions.
Indonesia already has some of the toughest labour regulations in Asia but they are not implemented uniformly.
This has left trade unionists unhappy with the way many workers are treated, while companies are reluctant to hire new workers because of the difficulties they face when trying to terminate contracts.
The rigidity of Indonesia’s labour law has harmed job creation, according to a recent report by the Organisation for Economic Co-operation and Development, with around 60 per cent of the country’s workforce still employed informally.
Andrew White, the managing director of the American chamber of commerce in Indonesia, said that many employers feel the labour law is “counter-productive”.
“Although the intention of the law is to create solid jobs, companies are reluctant to hire because they realise that it is very difficult to terminate a contract, even if you have a legitimate cause,” he said.
To circumvent the rigid law, many companies in need of a flexible workforce have turned to labour outsourcing companies, agencies that provide workers on temporary contracts.
However, trade unionists say this practice is often used in an exploitative and illegal manner, depriving workers of benefits such as pensions, social security and other basic labour rights.
“Outsourced workers get nothing,” said Ridwan Pandjaitan, a shop steward for the United Federation of Indonesian Metalworkers at a Mitsubishi car factory in east Jakarta. “Too many companies don’t want to take on permanent employees because they have to pay pensions and give workers other rights.”
Keith Loveard, who advises foreign investors on security and political risk issues in Indonesia, said that strikes are becoming more frequent and that tensions between trade unions and employers are likely to grow in the run-up to the 2014 national elections as politicians play the populist card.
Prabowo Subianto, the former special forces general who has emerged as an early frontrunner in the 2014 presidential race, said on his Facebook page that he would revise the regulations on outsourcing, which he described as “degrading, discriminatory and exploitative”.