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NEWS UPDATES Asean Affairs    5 October 2012

Indonesian workers strike shuts factories


Hundreds of thousands of factory workers across Indonesia took to the streets to demand higher wages and an end to a hiring system that deprives contract or temporary workers of basic entitlements like overtime pay and medical benefits.

Yesterday's one-day walkout is believed to be the country's first coordinated national strike.

Police estimated that 750,000 workers in at least 12 provinces joined the protests, while union leaders put the number at two million, according to wire reports.

Industrial cities and districts from Depok and Bekasi to Batam island were overrun with protesters. An official from the chamber of commerce in Batam said about 200,000 workers walked off their jobs, causing an estimated US$10 million in business losses.

The capital city was not as badly affected by the protests - the second in a week. Last Thursday, 10,000 workers rallied in front of government buildings here to push similar demands.

Said Iqbal, chairman of the Indonesian Metal Workers Federation, said: "There has been too much talk and little progress. We want a one-year suspension of outsourcing practices that violate the law while the government works out how best to implement regulations."

Indonesia's labour law allows contract workers to be employed in five sectors, but lax monitoring allows companies outside these sectors to flout the regulation and hire workers on the cheap from so-called outsourcing companies.

The latest labour protests come at a time when the government is actively wooing investors to sink their money in Southeast Asia's largest economy, with its relatively younger and cheaper workforce, to build much-needed infrastructure.

President Susilo Bambang Yudhoyono called the strike unfortunate because it could discourage foreign investment, his spokesman Julian Pasha said.
Last year, Indonesia posted strong growth of 6.5 per cent and attracted record foreign direct investment of US$20 billion.

However, its disgruntled workers have been increasingly taking to the streets to pressure the government to raise wages and offer the benefits due to them.

Economists have pointed out that while workers' wages in 2010 went up by about 7 per cent, the inflation rate was 16 per cent in the same period.
More than 60 per cent of Indonesians work in the informal sector, which means they have no contracts, no fixed work hours, no overtime pay and no benefits.

"In the last five years, we recorded an increase in the number of violations by companies in the areas of outsourcing, freedom to join unions and minimum wage," said Febi Yonesta, chairman of the Jakarta Legal Aid Institute.

"This has been worsened by weak implementation of laws and failure by Manpower Ministry officials to conduct regular checks."

On May 1, Manpower Minister Muhaimin Iskandar promised to revise labour laws to ensure that outsourced workers receive the same benefits as permanent ones. But yesterday, he said the government needs more time.

Union leader Said Iqbal said talks with the government would continue, but warned that workers would go on strike again in two weeks if there is no progress.

"We want the government to realise that workers cannot be shortchanged anymore."

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