Archive for the ‘Indonesia’ Category

In an extraordinary month, embattled sportswear maker adidas has faced protests in both the developed and developing world.

Global solidarity at work! Co-ordination could be better though.

First up, in Jakarta, 2,000 employees of supplier PT Panarub Dwikarya initially went on strike over a number of issues including:

  • a forced labour system
  • unpaid wages
  • freedom of association

The manufacturer, in retaliation, sacked 1,300 of them who have been on picket since. You can read the full details of their story here.

Then, last Sunday night, UK group War on Want staged an impressive display of guerrilla activism, beaming a huge “exploitation – not ok anywhere” projection onto a building within the Olympic Park in London, right after the men’s 100m final.

It certainly got people’s attention but I do hope something comes of it. Last week BusinessWeek ran a feature titled ‘Why Chick-fil-A and Other Brands Aren’t Being Bullied’. in which a corporate “crisis management” specialist made the withering assessment that

People live in short attention span theater. They get upset and then they move on.

Granted she has a vested interest in saying so, but there is more than a little truth to it.

War on Want and others can counter this by keeping it personal. Rich world consumers might have trouble keeping their attention focused but the people sitting on that picket in Jakarta today aren’t going to “move on” so quickly. They will still be there tomorrow unless the company is forced to act. The more we hear of their stories, the more likely we are to act.

Support the ‘not ok anywhere’ campaign by signing their online petition.

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The ‘Not ok anywhere’ campaign video:

English: Palm oil from Ghana with its natural ...

English: Palm oil from Ghana with its natural dark color visible, 2 litres Español: Aceite de palma de Ghana con su color oscuro natural, 2 litros (Photo credit: Wikipedia)

Ethical consumption is not going to solve the world’s problems, and here’s why.

To Western eyes, we only know the goods that are ‘Made in China’ that make it to our shores, so we can be tempted to think that they are representative of the country’s entire production, which would be wrong.

I’ll use Indonesia’s stats as an example.

Indonesia’s formal economy produces about $1 trillion of goods and services each year. The informal economy, which is not reported and not measured, is much larger than the formal economy. So many Indonesians working in small workshops, driving rickshaws, and so on are paid in cash and do not pay taxes.

Even within that smaller area which is the formal economy, only 15% (or 1 in 7 workers) are making goods for export, much of it raw materials such as palm oil and copper. So these companies that form part of the supply chain connected to Western consumers but are largely locally-based businesses, not employees of multinationals. Incoming foreign investment - where the operations are substantially controlled by overseas interests - represent about 5% of the economy, so it is generating perhaps 7-10% of economic activity or about 1 in 15 formally-employed workers.

Do-gooders have to remember their limitations. Even if every Western company invested in Indonesia magically stuck to all the core ILO standards overnight (ha!) it would hardly put a dent in solving the issues of Indonesia’s workers.

Besides, there is something slightly offensive in the notion that Westerners need to come in and fix things. Indonesians (and Indians, Cambodians, etc) understand their country’s challenges better than we do.

Having said all that, I’m not denying it has its place. I do think something is wrong with the world if consumers don’t care whether the person who made their household products was paid fairly, had reasonable hours and a safe workplace, regardless of where in the world they are located. I’m just saying we ought to think of ethical consumption more in this transactional manner only and not as a magic wand.

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English: Anti-WTO banner by Indonesian Migrant...

Image via Wikipedia

Concerned rich-world folks must frequently look across to workers in other countries making their goods in miserable conditions and want to help. The problem is, charity can sometimes be disempowering and can hinder rather than help workers’ attempts to solve issues for themselves.

Unions, the entities closest to the action and run by people involved firsthand, are surely the best-placed vehicle to advance workers’ rights. So why is it that sweatshops remain prevalent in Indonesia after so many years?

Let’s start at the beginning

For many decades, the predominant strand of unionism in Indonesia were the corporatised official unions falling under the umbrella of the FBSI peak body (re-named SPSI in 1985). FBSI worked closely with the governing Golkar super-party and saw itself as ‘covering the field’. Due to their close relationship with the government their mission was also to assist the overall national development, even if that meant occasionally soft-peddling on workers’ concerns.

Yet it is not so easy to eradicate ideas. Other strains of unionism could not be kept away: firstly the more radical, more Marxist anti-employer strain, and secondly a limited-scope kind which wanted to remain focused on improving workers’ socio-economic interests without becoming entangled in politics and the compromises that inevitably follow.

Activists were not allowed to register unions with either of those objectives, so they instead formed NGOs to pursue their agenda. Initially the NGOs were formed for euphemistic purposes but as time went on they became more and more open about their labour focus.

The 30 year period of official corporatist policy and a historically sharp gap between the working and middle classes combined to create a lasting divide between working class unionists and middle-class intellectuals. The latter struggled perpetually with the problem that they did not ‘belong’ to the group on whose behalf they were acting:

There is no guarantee that [middle-class NGO workers] share workers interests, because feelings of pity are not a form of class-consciousness (p. 124)

On the other hand, some were far-sighted enough to embrace this and saw their involvement as being only temporarily necessary:

We have sought to prepare workers who are capable of leadership and critical thought, and who are independent and self-sufficient. We have tried to minimise the dependence of workers and worker organisations on the NGO that facilitates them (p. 125)

In 1998 Suharto resigned and Golkar’s hegemony came to an end. In the 14 years since, a gradual adjustment has been going on. Unions have had an easier time registering and operating without government intimidation. Both changes have also made NGOs less relevant; the unions of Indonesia are now beginning to stand on their own feet.

Today there are three national trade union confederations, confusingly named KSBSI, KSPI and KSPSI. Whilst the ensuing division and rivalry no doubt weakens the voices of the workers it could be lessened with effort. The current arrangement at least allows ideologically diverse activists to each operate in their own spheres.

So, if you want to assist the sweatshop workers of Indonesia, don’t simply send your money to Oxfam – help them to get their story out. Consumer awareness might not be the most potent weapon by itself but it greatly amplifies work being done on the factory floor.

Preconceptions erased

I found this book to be a real preconception-buster. My picture of Indonesian workers had been that they are generally non-union and that this is a state of affairs maintained by companies seeking to keep wages low and a government keen to attract foreign investors. In fact there are more prosaic reasons why few Indonesians are union members:

  • Firstly, most people (about 70%) work in the informal sector and are not paid a wage or salary that could form the basis for collective bargaining. Moreover only a minority of the other 30% are employed by overseas-owned interests;
  • Secondly, labour activists have had the advantage of overseas donors for a long time and do not seem to have adjusted to the need for revenue from member dues.

[T]he availability of large amounts of external funding from international sources made the difficult work of due collection unattractive, especially for large trade unions (p.171)

many trade unions have yet to establish effective and transparent internal processes or to raise enough money through dues to fund day-to-day union operations (p. 165)

Lastly I was surprised by the similarity to the flavors of unionism here in Australia, despite differences in culture, governance and economy: the corporatists (here: the ACTU-ALP under Hawke; there: the FBSI-Golkar), the Revisionists who want to focus on union objectives but not broader political ones, and the Marxists who are, well, the same everywhere.

The book is available on Amazon.com:

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Thought-provoking article about bridging the ‘solidarity divide’:

Hello from Indonesia, readers! Not a lot to say just now however I hope to be able to bring you some voices from Batam in due course.

If you want to read more about the situation of the electronics workers on Batam, there is an excellent write-up on Asia Monitor Resource Center’s website:

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Continuous casting copper disc (99.95% pure), ...

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Copper is ubiquitous in modern life. Its most common use today is in electrical wiring – more than half of it is used for this purpose.

The cables that connect your mouse to your computer screen, your computer to the power socket, and your phone line to the outside world, all use copper.

In fact copper cables run under the oceans between continents. They carry the bits of information from me writing this post to various cloud computing servers around the world. There it waits for you to retrieve it – more data, more copper wires. The “cloud” metaphor (not to mention the advent of wireless connectivity) are somewhat misleading. It is still a heavily cable-dependent world.

The world’s largest single copper deposit is the Grasberg open-pit Mine in the Indonesian province of West Papua. It supplies about 4% of the world’s output and is also Indonesia’s largest taxpayer.

It is located in the most astonishingly improbable location: just 8 kilometres – literally walking distance- from the peak of Indonesia’s highest mountain. The area is characterised by glaciers. It is a very, very long way from civilisation – over 3,000 kilometres from the Indonesian capital Jakarta. The mine’s operator, the Freeport-McRohan Company, regularly flies its expat staff to the Australian resort town of Cairns for rest and relaxation.

No such perks for the Indonesians who work at this remote, inhospitable site, performing work that is both difficult and dangerous. In Australia unskilled workers at remote mining sites are lured by pay rates of $100 an hour for living so far from friends and family. The mining industry is so extraordinarily profitable that companies such as BHP and Rio Tinto can pay this without having to worry too much about it. Their biggest costs are infrastructure and extraction. Wages are trifling in comparison. Moreover copper extracted in Australia carries the same price on the commodities exchanges as copper extracted in Indonesia.

Yet believe it or not, Freeport-McRohan is currently having a dispute with the Indonesian workers of the mine who are paid roughly $2.00 an hour and want a pay rise to a globally competitive $17-$43 an hour. There is no question that the company can afford it, yet they won’t pay, so the workers are now on strike. It will be very interesting to see how far they get.

**Updated 15 December: The employees are going back to work on Sunday, after three months on strike. The company agreed to pay a 39% pay increase.

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The legislative building complex in Senayas, J...

Indonesia's parliament. Image via Wikipedia

This week an 18-month campaign passed a major milestone as Indonesia’s National Court ruled that the administration of President Yudhoyono was not constitutionally permitted to ‘sit’ on the 2004 Social Security law year after year without passing its enabling regulations.

This is the outcome of a political and legal campaign of the Social Security Action Committee (known by its Bahasa Indonesian acronym KAJS), spearheaded by the metalworkers’ union FSMPI.

Social security has been available to those employed in the public sector and civil sector but many workers in Indonesia are self-employed or work in the informal sector, so this is a large extension of the coverage of social security. The comprehensive legislation also includes healthcare and workers compensation. The Government, conscious of the cost, would have liked to defer this but will now have to act.

New focus: Accountability

Meanwhile lawmakers in the Indonesian parliament have been working on a new bill that requires the four existing social security providers to meet higher standards of accountability. This law looks set to pass by October. Currently there are four funds (the largest being Jamsostek and Taspen) which are limited liability companies wholly owned by the Government. It seems there is concern that the amount of assets under management might become tempting to future politicians.

The campaign is already shifting to a new phase: Ensuring that the new social security fund or funds are set up with a high level of transparency. KAJS has wasted no time, immediately teaming up with Indonesia Corruption Watch (ICW) and staging a demonstration outside the Social Security Administration building in Jakarta on Friday to lobby for the social security funds to be changed into public bodies now, which would require them to openly publish their accounts.

Interesting times still ahead but working Indonesians had a major victory this week.

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Fotothek df n-04 0000033

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The global union confederation for the textile and garment industry, the ITGLWF,  represents workers in clothing manufacturing companies.

In the last fortnight they published a comprehensive report into the sportswear industry, surveying 83 factories in Sri Lanka, the Philippines and Indonesia which collectively employ over 100,000 workers.

A range of shortcomings were documented. All of them are very concerning and I don’t want to gloss over any aspect, so I might unpack this report over a series of posts.

Victimising of union activists

The first problem found was that Freedom of Association is routinely suppressed by means of harassment, bribes, failure to renew short-term contracts and even factory closure.

The right to free association is enshrined in the Universal Declaration of Human Rights and also in Protocol 98 of the International Labour Organisation (ILO) which states:

all workers without distinction whatsoever, whether they are employed on a permanent basis, for a fixed term or as contract employees, should have the right to establish and join organisations of their own choosing.

Suffice to say, the ability of workers to combine interests and bargain for improved pay and working conditions hangs on the effective exercise of this right, so it is critically important in the economic development of these nations’ citizens.

Sri Lanka has ratified ILO Protocol 98. The researchers found that some companies circumvented this requirement by having the Employer Council (a non-representative body capable of being controlled by the employer) registered as a union. It therefore does not attract the usual due process protections. For example, there is no guarantee of secret ballots for representatives.

As a result union activists are – predictably – victimised and impeded in their work. If they are contract workers, which many are, they find their contracts are not renewed.

In Indonesia interference in union organising activities took a more straightforward form: organisers were denied access to office space, refused allocated time to participate in trade union activities and given unrealistically high production targets to prevent them having any time to carry out union duties.

In the Philippines, workers organising for their rights also faced employer reprisal. Employers also made use of ‘stacked’ employee representative committees. In one case a company resorted to closing a factory of 800 people instead of recognising their union – and is now facing court for doing so.

Overall, employer reprisal was the number one barrier to trade union organising, followed by use of legal red tape.

Three female workers in Sri Lanka apparel industry

Image via Wikipedia

There are two benchmark figures in the area of low-income and poverty wages:

- The Minimum Wage (where it exists) is the legally-enforceable minimum rate of pay, set either by legislation or by some administrative process. If it is not observed, it is fairly straightforward to take legal action against the offending employer.

- The Living Wage, on the other hand, is the minimum wage necessary for a person to make ends meet. Ideally this is less than the minimum wage but alas it has long been the case that in many States of the USA the Minimum Wage pays less than a Living Wage. The exact level of the Living Wage constantly changes as costs of living increase.

If an employer fails to pay the living wage there is no easy way to get them to do so!

Enter Asia Floor Wage.

AFW is a coalition of unions and other activists who pursue fair wages for garment workers in Asia (they refer to the Living Wage as a ‘Floor Wage’). This week they published revised minimum monthly rates for the six major garment manufacturing countries:

  • Bangladesh 12248 BDT
  • Cambodia 692903 Riel
  • India 7967 Rupees
  • Indonesia 2132202 Rupiah
  • Srilanka 19077 Rupees
  • China 1842 RMB

These rates are equal to 540 USD at purchasing-power parity.

According to AFW, the ‘gap’ between the Living Wage and the Minimum Wage in these countries is, on average, 1 to 2. Guangdong, China’s manufacturing province, comes close but still falls short.

AFW have also assembled a helpful guide for retailers and sourcing companies who want to take CSR seriously, explaining how they can meaningfully commit to fair wages in garment production.

Indonesian workers at Nestlé’s plant in Pandung have finally won a three-year campaign to compel the company to negotiate pay and conditions with their union.

The “Nespressure” campaign was officially brought to an end when company representatives signed an accord last Monday in Switzerland. Local company and union representatives also signed last Thursday.

Nestlé operates in 86 countries and employs over a quarter of a million people (-Wikipedia).

The campaign was orchestrated by the IUF, the global union confederation for food workers, whose many affiliates echoed the desires of the workers in Pandung in places as diverse as India, Australia, Ukraine and Fiji.

The video below explains the workers demands:

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The factories that make popular consumer gadgets including computer components, smartphones and video game consoles mostly employ young single women. This remains true all across Asia.
Amongst factory owners, the conventional wisdom is that women more suitable because they have ‘smaller nimbler fingers’, are less likely to rush to finish a task (thus making errors), and they make more pliant workers generally. So the products thought of as “boys’ toys” are mostly assembled by women!
To obtain factory work, these young women move from rural areas within an industralising country (and sometimes from a neighbouring country). They have little education and realistically a factory job may be their best-paid option. Usually they send home a large part of their earnings to support their family at home; nearly 50% on average.
In places such as Batam Island, Indonesia, the workers have no cultural attachment to the place they live and no social life. They often work extended hours to fill the time and to provide themselves with some more income, since so much of it goes into remittances or cost-of-living expenses.
So far it seems like a mutually beneficial arrangement, however these women receive no guarantee of ongoing employment. They are usually employed on one- or two-year contracts with no guarantee of ongoing work. It is unusual for workers to stay in these workplaces more than a few years and very unusual beyond the age of 25. Unions call this precarious employment and they put the proportion of Indonesian workers employed precariously at 70% and on the Island of Batam at 98%.
Precarious workers do not receive social security entitlements, undercutting their prospects for long-term prosperity and good health.
They also do not remain in the workplace long enough to develop a sense of ownership, which is a loss for both employees and employers because long-term committed employees give feedback that leads to improved processes.

Photo:IMF Metal

Indonesian metalworkers unions FSPMI and Lomenik have made inroads in recent years in organising workers in Batamindo around the issues of ongoing employment and unfair dismissal. Today there are more than 50,000 union members 0n the island and it is regarded as a model for unions seeking to improve the rights of EPZ workers in the region.
That is not the full story however. As a result of past government crackdowns and also of ongoing union militancy, joining a union retains a stigma. The women who do not choose to join the union still exercise other means of resistance, such as slowing down work processes, taking extra long toilet breaks, being absent enmasse and even confronting bosses individually. There are working women’s organisations that do not take the form of traditional unions.
It may sound ironic but the issue that seems to cause the most grief is increasing wages(!) when companies do it indiscriminately or across-the-board, without taking account of seniority.
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