Indonesian workers strike back against outsourcing


The industrial process in Indonesia rolled back into normalcy on Friday, as the three million workers who took part in a national strike returned to work.

Thousands of factories were forced to close during the day-long strike which affected 24 districts and more than 80 industrial estates on Wednesday.

The Indonesian Employers’ Association (Apindo) is still calculating the time/money cost of the strike but early estimates put the figure at 1 trillion rupiah (US$104 million).

Despite sporadic demonstrations in several cities on Thursday, the situation returned to normal on Friday after unionists announced a cease-fire only minutes before the end of the first day of the strike, which was initially planned for five days.

Indonesia is the largest economy in south-east Asia and one of the fast-growing economies in the world but its minimum wage of 1.1 million rupiah (approximately US$115) per month is the lowest in the region.

In addition, as many as 40 percent of Indonesia’s 41 million workers are on short-term contracts.

Many companies rely on labour outsourcing, citing the need for a flexible workforce. But these outsource workers receive no benefits, are paid less than the minimum wage and face increasing job insecurity.

Just days before the ITUC’s World Day for Decent Work on 7 October, Coordinating Minister for Economy Hatta Rajasa and Manpower and Transmigration Minister Muhaimin Iskandar invited employers and union leaders to the negotiating table with agreements that the practice of outsourcing and cheap labour would be reviewed.

Iskandar said on Friday that he would revise the 2004 ministerial decree on outsourcing to limit the practice to the areas of security, cleaning service, support jobs on mine sites, catering and transportation.

“We will together review the new ministerial decree on decent pay before the 2013 minimum wages are set,” Iskandar said, adding that negotiations would resume next week after Rajasa returned from the IMF summit in Tokyo.

But labour unions have insisted that they will not concede on any of their demands, namely the elimination of the outsourcing system, a review of cheap labour and the simultaneous implementation of a national healthcare program for all.

Said Iqbal, chairman of the Confederation of Indonesian Workers Union (KSPI) (the body which coordinated the 3 October Day of Action), said the strike would resume if the government and employers turned a deaf ear on their demands.

“Workers have been exercising their patience and we have too long endured the severe economic livelihood under the outsourcing system and cheap labor policy,” he said.

Apindo chairman Sofjan Wanandi has called on the government to supervise the outsourcing practice closely and take harsh action against any company found to be misusing it.

Labour experts are also calling on the government to facilitate a dialogue with employers and unions which will provide a win-win solution on the contentious issues of outsourcing, cheap labour and social security.

Payaman Simanjuntak, a professor of labour economy at Jakarta’s privately-run Krisnadwipayana University, said: “The government should facilitate a social dialogue instead of issuing counterproductive regulations.”