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he government and the House of Representatives have been told to immediately review the controversial 2003 Labor Law to better protect labor and revive the partnership between employers and workers in building harmonious industrial relations.

Nawawi Asmat, a researcher with the Indonesian Institute of Sciences (LIPI), criticized Law No. 13/2003 on labor for causing industrial conflicts as it contained contentious articles adopting global labor market flexibility, which has created job insecurity among workers in all sectors.

“The practices of outsourcing and contract-based employment were needed to create a flexible labor market as implied by the letters of intent [LoI] between Indonesia and international financial institutions like the IMF and World Bank when providing credit to Indonesia to defuse past crises. However, they have had a negative impact on industrial relations and the condition of most workers today,” he said in a labor workshop organized by the Friederich Ebert Stiftung (FES) here on Wednesday.

Nawawi, a member of the LIPI research team assigned by the President to study the labor law, mentioned a great number of flaws in the law which have contributed to prolonged industrial conflict.

He warned this prolonged industrial conflict would remain unless the law was revised.

The Constitutional Court has so far annulled five chapters, including the chapter on the compulsory granting of severance pay to dismissed workers committing crimes, and is still reviewing ten others.

Rieke Diah Pitaloka, a lawmaker from the Indonesian Democratic Party of Struggle (PDI-P) and labor activist, stressed the importance of an immediate review of the labor laws to restore the central role of the state in labor protection. “The government, the House and law enforcers have turned a blind eye to the rife infringements by employers of the 2003 Labor Law,” she said.

In the future, she said, all stake holders, including experts, the government and employers, had to lay out a pro-labor policy in reviewing the labor laws, including the 2004 national social security system law. “The laws must ensure the protection of workers, domestic businesspeople and not foreign investors and employers,” she added.

She said all factions in the House’s commission IX on labor and health affairs had adopted this common but fundamental policy in the ongoing review of the 2004 overseas labor placement and protection law.

Former manpower ministers Awaloeddin Djamin and Cosmas Batubara regretted the disappearance of the partnership-based Pancasila industrial relations in the labor law and the establishment of labor courts which were found to be less effective in settling industrial disputes.

Awaloeddin, also a former police chief, said most industrial disputes could actually be settled unanimously and peacefully through a bipartite forum provided conflicting sides were open to dialogue.

Cosmas, also chief commissioner of beer producer PT Multi Bintang, said workers asked for a cut in their monthly salaries when foreign companies were facing financial difficulties during the 1997 economic crisis but demanded higher annual bonuses after the crisis was defused.

Prof. Aloysius Uwiyono concurred, saying the review of the labor laws was needed to provide protection not only for 33 million workers in the formal sector but also 77 million others in the informal sector.

“All workers must be equally treated not as a production factor but as partners of investors in the whole production process. The law should give chances to both sides to exercise their democratic rights in making collective labor agreements,” he said.