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Jakarta Post

Test for toothless labor unions

This year’s observance of May Day will likely to be an anticlimax for everyone after labor unions failed to fight for a review of the 2003 Labor Law, which institutionalized outsourcing, contract-based recruitment and provincial minimum wages

Ridwan Max Sijabat (The Jakarta Post)
Jakarta
Sun, May 1, 2011

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Test for toothless labor unions

T

his year’s observance of May Day will likely to be an anticlimax for everyone after labor unions failed to fight for a review of the 2003 Labor Law, which institutionalized outsourcing, contract-based recruitment and provincial minimum wages.

Labor unions and pro-labor legislators are organizing mass rallies in big cities and industrial estates. More than 50,000 workers and students are expected to take to the streets on May 1 to protest the government’s reluctance to start implementing its national social security system (SJSN) and its rejection of a bill on insurers.

The 2004 National Social Security System Law required the government to issue 11 government regulations and 10 presidential instructions by October 2010 to implement five mandatory universal progams — healthcare benefits, occupational accident benefits, old-age risk benefits, pension benefits and death benefits.

The government initially planned to start implementing a universal healthcare benefit scheme in 2013.

Deliberation of the bill on insurers as mandated by the law also stalled after a team of eight ministers led by Finance Minister Agus Martowardojo proposed dropping it.

The government proposed a new idea in an apparent attempt to maintain control over the huge social security funds through the state-owned insurance companies PT Jamsostek, PT Askes, PT Taspen and PT Asabri.

The government has paid no serious attention to the planned mass rallies for May Day mainly because they will not be fruitful and will not win full support from the public, especially workers.

Unlike similar celebrations and protests in Europe, Australia and Latin America, no May Days in the past have succeeded to press the government to bow down to workers’ demands.

(Violent) mass rallies on May 1, 2005, were the largest events since the 1998 reform movement. Although President Susilo Bambang Yudhoyono and then vice president Jusuf Kalla asked several state universities to study the much-criticized labor law, no review was done and no real pay hikes appeared to improve worker purchasing power. The annual increase in provincial minimum wages has been really based on the inflation rate.

The weak bargaining power of labor unions has a lot to do with their poor support at the grassroots level and the country’s slow economic growth.

More than 80 labor unions, including the three major confederations — the All-Indonesian Workers Union (SPSI), the Indonesian Prosperous Labor Union (SBSI) and the National Workers Union (SPN) — have already registered with the Manpower and Transmigration Ministry.

However, the membership of these groups total around 11.5 million people, less than 30 percent of the 35 million workers in the formal sector.

The remaining 70 percent of company workers and the 72 million workers in the informal sector have been left unrepresented.

Besides, many labor unions have only a small number of members in the provinces or regencies. Many others have only signs in front of their offices, as most union activists fight only for political interests.

The weakness of labor unions was made obvious by the apparent failure of a labor union committee to file a lawsuit against the President and several ministers for the government’s alleged infringement upon the 2004 National Social Security System Law.

The President and the ministers, including the Coordinating Public Welfare Minister and the Finance Minister, have several times ignored warrants issued by the Central Jakarta District Court, which is trying the class action lawsuits filed by the labor unions.

Labor unions also have weak political influence in the House although many legislators from the Indonesian Democratic Party of Struggle (PDI-P), the Golkar Party, the National Mandate Party (PAN), the Prosperous Justice Party (PKS) and the National Awakening Party (PKB) have frequently questioned the government’s commitment to implementing national social security programs.

Workers have been forced to accept outsourcing and low salaries for several reasons. Most prominent is the low quality of Indonesian human resources — almost 80 percent of the 107 million people in the labor force are elementary and high school graduates and unskilled.

The situation is exacerbated by a high unemployment rate of 8.5 percent, an increasing number of closures of labor-intensive industries after the implementation of the ASEAN-China Free Trade Agreement (ACFTA) and rare employment opportunities in the formal sector.

So far, only the PDI-P faction has threatened to propose a no-confidence motion or a political inquiry into the government’s alleged violation of the 2004 National Social Security System Law and the 1945 Constitution, which guarantees the people’s rights to social security.

Golkar, the PAN, the PKS and the PKB will unlikely throw their political weight behind the move since they are part of the government coalition.

Learning from developed countries’ experiences, Indonesia should be able to start implementing its national social security programs gradually.

US President Barrack Obama dared to take political risk in his move to review healthcare last year to ensure the state’s equal treatment of all people despite strong opposition from conservatives.

Germany under Otto von Bismarck began to provide social security programs with healthcare benefit schemes only for industrial workers amid fears of general strikes.

The government can no longer maintain control over social security funds since Jamsostek and Askes have allegedly become money engines for corrupt government officials while Askes and Taspen have cover only civil servants.

Besides, Jamsostek covers only 9.2 million of the 35 million workers in the formal sector, while 72 million workers in the informal sector have left unprotected.

The law mandates the establishment of a non-profit organization to manage a social security system and collect a huge amount of funds that could be used to help finance economic development and decrease the country’s dependence on foreign loans.

If the government plans to start implementing the healthcare program in 2013, it should stop the so-called Jamkesmas and Jamkesda healthcare programs.

The program’s implementation is contrary to social security principles stipulated by the law. Instead the funds should be allocated to start building infrastructure such as a population database with single identity cards, hospitals or to pay for medical equipment and medical workers, including specialists.

Most medical health centers and state hospitals outside Java in fact are still lacking medical workers, specialists and medical equipment as specialists prefer to work in big cities or in Java.

Labor unions and the general public must press the government to start implementing welfare state-based national social security programs and pay for the contribution of the poor and the unemployed.

The author is a staff writer at The Jakarta Post.

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