Indonesia's fragmented Trade Union Movement

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DOES Indonesia have too many trade unions? It would certainly seem so. According to the Ministry of Manpower and Transmigration, there are five national confederations for workers, 91 national-level unions and more than 45,000 regional and sectoral unions registered.

The three biggest are the Confederation of Indonesia Prosperity Trade Union (KSBSI), the Confederation of All Indonesia workers’ Union (KSPSI) and the Confederation of Indonesian Workers’ Union (KSPI).

The KSPSI was the only union permitted during president Suharto’s authoritarian rule. It thus has a reputation in some circles for being somewhat soft on workers’ rights.

The KSBSI, by contrast, was set up in 1992 in direct defiance of government policy. Its leaders suffered considerable repression, a point which they now use to win greater credibility among workers.

The KSPI was founded in 2003 and is affiliated with the International Trade Union Confederation.

Despite this diversity, Indonesia’s unions nevertheless manage to unite from time to time. Examples include the demonstrations in support of a higher minimum wage in Bekasi in February, and the massive nationwide protests in March that forced President Susilo Bambang Yudhoyono’s government to back down on planned reductions in fuel subsidies.

But while the nation’s labour leaders can work together on such issues, it is much more difficult for trade unions to present a common front when it comes to formulating policy proposals.

One issue of contention is the labour movement’s position on the growing number of contract workers unprotected by Indonesia’s strict labour laws. Private sector employers prefer contract workers because of the high, legally mandated, severance payments required for permanent workers. Labour unions see the practice operating against the interests of workers. But beyond that, there is little agreement.

Some unions demand tough government action, blaming poor law enforcement for the current situation. Others, such as the KSBSI, believe that the fault lies with the labour laws. These laws, they argue, are open to many interpretations, a weakness that leads to drawn out legal proceedings when workers challenge employers in the courts. KSBSI believes these laws should be revised to take account of employer concerns while at the same time widening their scope to ensure that all workers are protected.

Speaking to The Straits Times in Jakarta in May, Mr Rekson Silaban of the KSBSI suggested two reasons for the plethora of trade unions in the country. The first reason, he believed, was simply “an over-reaction to 32 years of repression during the Suharto era”.

The second was that Indonesian law makes it very easy to establish a trade union. The minimum required membership is 10. This is considerably more liberal than the International Labour Organisation’s recommendation of a minimum of 20. As a result, workers dissatisfied with their union leadership react by forming rival associations.

In such circumstances, it is difficult for employers to know with whom they should negotiate. “Some companies can have up to four or five rival unions,” Mr Rekson noted.

And to be registered as a national confederation, an organisation only needs an address for its headquarters and at least three regional offices.

Yet another problem, explained Mr Rekson, arises from the fact that the labour ministry does not attempt to verify membership numbers. Instead, unions are registered in the districts where their offices are located, and their membership claims are taken at face value. As a result, even minor unions sometimes demand to be represented during discussions on national government policy.

Attempts to establish labour- friendly political parties, meanwhile, have largely failed. Many previously influential unionists such as Muchtar Pakpahan, Dita Indah Sari and Budiman Sudjatmiko set up their own political parties, or joined existing political groupings. None, however, has been particularly successful.

This is hardly surprising. By most estimates, only about 11 per cent of the nation’s 30 million workers in the formal economy are paid-up members.

The more established political parties, however, have gained influence in trade unions. KSPSI is popularly associated with the secular nationalist Golkar party, while KSPI president Mohd Iqbal Said has close connections with the Muslim-based Prosperous Justice Party.

Local political leaders have been similarly willing to use the unions for their own purposes. The unrest in Bekasi, for example, was fuelled in part by the district head, who promised to raise the minimum wage ahead of coming elections.

This chaotic situation does not serve the interests of either workers or employers. It is time for all sides to seriously consider reform.

(C) Singapore Press Holdings Limited 

Key Political Risks

Asia is the fastest growing region in the world, and is likely to remain so in 2013. However, a number of risks cloud the picture.

The good news is that domestic demand in the region remains strong and should continue to cushion the impact of weaker external demand on overall economic growth. The completion of national elections in Japan and South Korea in December 2012 should also help reduce political uncertainties. 

But Asian governments will need to guard against the adverse impact of prolonged easy financial conditions on inflation.

Rising inequality also continues to threaten social stability. Ethnic and religious rivalries remain just below the surface in many countries. When combined with government corruption and (in some countries) high youth unemployment, this could become a deadly mix. This seems particularly true of China.

Territorial disputes also require close monitoring. Much diplomatic activity in the new year is likely to be centered on finding ways to reduce tensions over resource-rich islands in the South China Sea, where Beijing's claims overlap with those of Japan, Vietnam and other Southeast Asian states. South Korea and Japan also have rival territorial claims.

North Korea remains the wild card. Inclined to believe its own propaganda, Pyongyang's new leadership could miscalculate, making belligerent moves that plunge the region into a military conflict that nobody wants.

About Me

My name is Dr Bruce Gale and I am a senior writer with the Singapore Straits Times. I studied at  LaTrobe University (BA Hons) in Melbourne and later at the Centre for Southeast Asian Studies at Monash University (MA). My PhD thesis, which focussed on Malaysian political economy, was completed at the Malaysian National University (Universiti Kebangsaan Malaysia) in 1987.

From 1988 to 2003 I was Singapore Regional Manager for the Hong Kong based Political and Economic Risk Consultancy (PERC). 

I have written several books and articles on Southeast Asian affairs, including Political Risk and International Business: Case Studies in Southeast Asia (Pelanduk Publications, 2007). Books on language include Mastering Indonesian: a guide to reading Indonesian language newspapers (Pelanduk Publications, 2008)

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