Riau Islands Governor Muhammad Sani has raised the minimum monthly wage (UMK) in Batam by 10 percent to Rp 1.31 million (US$144.1), while dropping several taxes that have improved living standards in the city.
The new wage is well below workers’ requests for Rp 1.76 million a month and higher than business association demands of Rp 1.26 million.
Sani announced the increase at a press conference on the sidelines of a meeting on implementing the Millennium Development Goals (MDGs) in Riau Islands.
“We consider the wage increase to have accommodated the interests of both workers and employers,” Sani said.
The increase, however, was immediately rejected by members of the Batam chapter of the Indonesian Metal Workers Unions Federation.
Chapter head Suprapto said that the figure was much lower than workers’ demands, and promised a concrete response later this week.
“We will consolidate first. We will react later, as [the raise] is far from what we asked for,” Suprapto said.
Sani also said he instructed Batam’s mayor to rescind several local taxes, including those levied on rental housing, food stall owners, caterers and several others that, according to many, have increased the standard of living for workers in Batam.
The governor said he would introduce subsidized public transportation for workers.
“The figures were calculated based on input from the workers unions alliance. I hope there will be no more upheavals,” Sani said.
Local businesses suffered losses after last week’s three-day labor unrest in Batam.
Employers asked that the city’s minimum wage arrangement be made valid for three to five years to prevent annual conflicts between employers and workers.
Head of the Batam city chapter of the Indonesian Employers Association (Apindo), O.K. Simatupang, told The Jakarta Post on Sunday that annual UMK discussions in Batam were always chaotic.
Simatupang said Apindo wanted to extend UMK agreements for five years to avoid continued conflicts with workers.
“The protests have become bigger and threaten investment. The three-day work stoppage paralyzed the industries in Batam and had caused significant losses,” Simatupang said.
Prospective investors might have second thoughts about investing in Batam due to the labor actions, even though it was a prime investment area given the tsunami that struck Japan in March and the ongoing flooding affecting Thailand.
“We have hoped for the arrival of investors in Batam due to the natural disasters, but if [chaos] is the case, investors will seek a safer area, such as Malaysia,” Simatupang said.
Activities have returned to normal following the rioting.
Business districts shuttered during the violence have reopened, albeit under tight police security.
Indonesian Trade Union Alliance lawyer Bambang Yulianto said the police detained 27 people in connection with the riots on Nov. 25, including two students and 23 workers who have since been freed.
Two men, however, were named suspects and remain in police custody: Aman, 20, a construction worker, and Ashardi, 31, a dockyard employee.
The men allegedly vandalized the Sagulung Police station and Batam’s municipal office and face five years’ imprisonment if found guilty of the allegations.