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Indonesia cracks down on organized labour

Indonesia
Human Rights
Economics

Facing crucial upcoming elections, Indonesia is cracking down on organized labour.

The country is set to hold regional elections in June and a general election in 2019, and the results could throw more momentum behind the government’s recent crackdown on organized labour. In recent years, unions have been a key player in Indonesian politics, winning important fights, getting labour union leaders elected to parliament at the district level in the 2014 general election.

Worker mobilization, including general strikes in 2012 and 2013 as well as legal action, has scared corporations and the state

Since Reformasi – the wave of reform that followed the end of Suharto’s dictatorship in 1998 – a wave of strikes has taken place across Indonesia, intensifying between 2011 and 2013. They involved millions of workers, forcing the government to implement huge minimum wage increases – by an average of 27 per cent per year – and increase healthcare provision.

But worker mobilization, including general strikes in 2012 and 2013 as well as legal action, has scared corporations and the state. They are now hitting back, attempting to restrict the power of unions. The government has designated many industrial estates ‘national vital objects’, de facto banning industrial action, and eliminated the recurring annual negotiations over minimum wage increases.

A massive workers’ protest during a general strike at Tanjung Priok Port, Jakarta, on 31 October 2013.
A massive workers’ protest during a general strike at Tanjung Priok Port, Jakarta, on 31 October 2013. Photo: LIPS

Workers flex their muscles

A nationwide strike – spanning the manufacturing industry and some informal sectors – was held on 3 October 2012, coordinated by the Indonesian Labour Assembly, an alliance of labour unions. More than two million workers participated in the general strike, spread over 35 cities and districts – in 20 provinces and 80 industrial estates. They protested against poor working conditions including low wages, unsafe workplaces, and short term contracts.

During this strike, tens of thousands of workers managed to occupy the Nusantara Bonded Zone in Cakung, North Jakarta, the country’s oldest and most notorious Export Processing Zone – a barrier-free area where a developing country hopes to attract foreign investment, often at the expense of workers. The majority of workers in the garment sector here are women and sexual harassment has been the norm.

The occupation in turn paralysed seven other key industrial estates in Bekasi, West Java, which are the backbone of Indonesia’s economy – they contribute 46 per cent of the country’s total non-oil-and-gas exports. Thousands of workers also blockaded a number of highways. This collective action brought about a sharp increase in the minimum wage (48 per cent) in 2013. It was the first general strike since the dictatorship ended.

The second general strike lasted for two days, on 31 October to 1 November 2013. As a warm-up, a week prior to this general strike, a wave of strikes escalated in different cities where industrial zones were located. A new alliance, the National Coalition of Labour Movement was formed to help with central coordination. At least three million workers took part in the strikes.

There have been some notable achievements as the results of the mobilization. Between 2011-2013, there was a series of protest campaigns that demanded changes on three major issues: the minimum wage, the elimination of outsourcing, and social security policy. Many of their demands have been adopted into government regulations.

Firstly, workers asked the government to take more elements into account when calculating living costs to set minimum wages, following which the government increased minimum wages across the country (different provinces and cities have these set at different levels) when a new list of wage components – around 60 items – was adopted into Minister of Labour’s Decree in 2012.

A May Day 2014 protest in front of Hotel Indonesia roundabout in Jakarta, a popular site for protest mobilization.
A May Day 2014 protest in front of Hotel Indonesia roundabout in Jakarta, a popular site for protest mobilization. Photo: LIPS

Secondly, increased restrictions on irregular and agency work have been recommended by the judiciary following a campaign by unions in 2012. A group of workers submitted a judicial review to the Constitutional Court to restrict outsourcing. When the judicial review was accepted in 2012, the Court mandated the government to issue stricter regulations to impede employers from recruiting contract and agency workers. The government was forced to issue the Minister of Labour’s Decree No. 19/2012, which limits outsourcing.

Thirdly, the government legislated for a social security policy. Despite controversy and debate within the labour movement around it – as the policy is based on monetary contributions rather than providing universal free healthcare – this policy was enacted to cover all citizens with health insurance. This was previously only provided for formal workers, civil servants, and members of the military.

Free the workers, jail the bosses

Since 2009, with a combination of legal knowledge and skills, workers and labour unions successfully brought a company’s general manager – Fathoni Prawata of Japanese stationery company King Jim’s Indonesian subsidiary – to criminal prosecution, and then to jail for dismissing a union leader.

In later years, as a result of their pressure several other employers were sent to jail for not paying minimum wages. But despite a few victories, law enforcement remains toothless in many instances: bringing employers to prison is not a uniform trend, nor is it an easy process. It depends on various factors, including the creaky judicial system, as well as on political opportunity and power struggles.

Capital and state retaliate

The successes of Indonesian labour unions have led to a strong backlash from capital and the state. Employers have taken the threat of a strike wave seriously and tried to consolidate their power. Multinational corporations including Samsung seem to be behind those who are going on a reactionary offensive against workers’ strikes.

Since 2014, the central government has launched a certification scheme to declare certain economic units ‘national vital objects’, restricting them from any industrial action. The Ministry of Industry has guaranteed an added layer of security for 49 industrial firms and 14 industrial estates with the help of the National Police’s Directorate of Vital Object Security, and the national army.

Furthermore, the workers’ core campaign on minimum wage increases has been hindered by a new regulation on minimum wage issued in 2015, which replaced annual negotiations with a set formula – economic growth plus inflation rate, weakening organized labour’s ability to address more alarming issues in the future, like occupational health and safety.

Employers and government have consolidated their power, and this has been aggravated by the return to politics of military and police figures.

In response, workers need to consolidate their power from bottom-up. Their collective experiences of industrial strikes and everyday resistance have taught them that grassroots labour organizing is necessary for success in political struggle – not only for their rights and justice, but also for Indonesian democracy.

A more detailed account of Indonesian labour struggles is described in Fahmi Panimbang and Abu Mufakhir (forthcoming, 2018), ‘Labour Strikes in Post-Authoritarian Indonesia, 1998-2013’, in Jörg Nowak, Madhumita Dutta, and Peter Birke (eds.), Workers Movements and Strikes in the 21st Century: A Global Perspective.

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