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1,000 Bintan workers may lose jobs next year
Approximately 1,000 workers will lose their jobs when Singapore-owned PT German Plastic at the PT Bintan Inti Industrial Estate (BIIE) in the Riau Islands relocates its factory to Vietnam early next year
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pproximately 1,000 workers will lose their jobs when Singapore-owned PT German Plastic at the PT Bintan Inti Industrial Estate (BIIE) in the Riau Islands relocates its factory to Vietnam early next year.
The plant is being relocated due to company efficiency goals, BIIE general manager Jamin Hidayat told The Jakarta Post on Tuesday, adding that the relocation would affect BIIE.
“Businessmen will always try to find better and more efficient places to make money. The relocation indicates that Bintan is still considered less competitive than Vietnam. We realize that the problems were related to government regulations and wages,” he said.
According to Jamin, the company’s investment in Bintan amounted to between US$10 million and $20 million.
The BIIE began operating in 1994 on a 300-hectare lot. Between 1994 and 1998 it attracted 34 foreign investors from various countries with a total investment of $800 million and a workforce of 16,000. The number of foreign investors dropped to 22 by 2010, with a total investment of $480 million and 11,000 employees.
“The decline was sparked by the global economic downturn, but the [decline due to the economy] is smaller compared to the impact of regulation. We initially hoped for an improvement in the free trade zone, but its implementation has stagnated and is even worse than the bonded zone during the New Order,” Jamin said.
The head of the Bintan branch of the Indonesian Prosperity Trade Union (SBSI) Timbul Sianturi said the union had received a report from the leader of PT German Plastic’s union unit leader that the company would close the factory in Bintan.
“Management and the union are in discussions. Since the company will leave early next year, we are negotiating for the company to pay severance,” he said.
According to Timbul, the withdrawal of companies from Bintan could be resolved through negotiations between workers and management regarding severance pay.
Only two companies still have issues with workers’ payments and the cases are being tried at the industrial court in the capital Tanjung Pinang.
“Most of the cases have been settled out of court and the payment amounts have been adjusted according to what the company can pay,” Timbul said.
