Businesses on high alert over violence

Following a court decision on Thursday that annulled a West Java administration decree on minimum wages, labor-intensive manufacturing firms are preparing for the worst as labor unions pledge to stage larger rallies and strikes.

Powerful business lobby group, the Indonesian Employers’ Association (Apindo), has demanded that police deploy more personnel in anticipation of the movement, over concerns workers will run rampage.

“We’re worried the rallies will turn violent,” said Apindo deputy chairman Hariyadi Sukamdani.

“If companies halt their production, how will they make the money to pay their workers?” he said, urging the workers to respect the court’s decision.

Bekasi Investor Forum executive Frans L. Kansil, who is in charge of industrial security, said the West Java Police had deployed at least 2,700 personnel to Bekasi in anticipation of a violent protest.

“According to the Bekasi Police chief, personnel have been posted in several strategic areas between the city’s industrial estates so that they can move fast from one complex to another,” he said.

Bekasi, around 20 kilometers east of Jakarta, houses the country’s largest industrial estate where multinational giants, such as Samsung Electronics, Kraft, Mattel, and Epson, have their manufacturing facilities.

Since earlier this month, workers have disrupted operations on the estate by staging rallies and organizing sweepings, to force fellow workers to join the protests or risk physical attack.

Some even ransacked the office of a multinational company.

The labor dispute centers around Apindo’s lawsuit against the West Java administration’s review of workers’ salaries, which included a 15.97-percent rise of the standard minimum wage in the Bekasi regency, bringing the figure to Rp 1,491,866 per month (US$166.68).

The new wage is higher than the Rp 1,356,242 agreed earlier between businesses and labor unions.

Apindo believes that many foreign investors are planning to pull out due to the rising labor costs, which are burdensome.

An estimated 100,000 workers might lose their jobs, with a potential investment loss of $2 billion, should the West Java administration insist on the new wage standard, Apindo says.

The Bandung State Administrative Court issued a verdict on Thursday revoking the administration’s decree. Presiding judge Disiplin F. Manao ordered the administration to issue a new decree based on the consensual wage agreement between the businesses and the labor unions.

In response to the verdict, labor unions have vowed to hit the streets in larger numbers until their demand for the higher payment is fulfilled by their employers.

“During the past few days, we have instructed our members to get ready to stage bigger and more intensive rallies should the court verdict favor the employers,” said the coordinator of the Bekasi Workers’ Movement Alliance, Obon Tabroni.

“Now the time has come for us to put more pressure on them and make our voices heard.”

Obon also said the alliance would run daily sweepings across seven industrial estates in Bekasi to ensure more workers join the protests.

He could not guarantee whether the rallies would end peacefully.

The raging labor protests in Bekasi and Tangerang, Banten, have undermined Indonesia’s competitiveness and certainty in doing business, amid increasing confidence by the international business community in the country’s economy.

Realized foreign direct investment (FDI) jumped by 18.4 percent to $19.28 billion last year, and two international credit rating agencies upgraded Indonesia’s sovereign rating to investment grade.

Additional reporting by Multa Fidrus in Tangerang.