Thousands of Indonesian workers rally at Japanese Embassy

Kyodo

Enraged about layoffs and labor practices at Japanese companies in the country, about 2,000 Indonesian workers rallied in front of the Japanese Embassy in Jakarta on Wednesday.

Similar rallies were also staged in the city at the embassies of Italy, Malaysia and South Korea.

Police, who dispatched about 8,200 officers, estimated that between 5,000 and 7,000 workers in all took part in the rallies, with more expected to join later.

The embassies were selected because the companies from the countries they represent frequently violate labor rights, according to Said Iqbal, chairman of the Confederation of the Indonesian Labor Unions.

The Japanese Embassy protest was triggered by the layoffs of 1,300 workers at PT Mitsuba Indonesia Pipe Parts, a Japanese manufacturer of vehicle parts based in Bekasi in West Java Province.

“We want them to be rehired,” a labor union representative said.

The protesters also demanded that the Japanese government force Japanese companies in Indonesia to obey the 2003 Manpower Law and abolish the practice of outsourcing.

Under this practice, workers are hired only temporarily on a contractual basis through a provider and are usually paid a daily wage, without fringe benefits.

“We are pretty sure that if the Japanese Embassy intervenes, the companies will listen,” said Rustam, a 42-year-old employee at PT Honda Prospect Motor, a Japanese company assembling Honda automobiles and components.

He added that eight representatives who met with Japanese diplomats later gave the embassy a week to meet their demands or the protesters “will be back in a bigger rally.”

Later in the day, Andi Gani Naniwea, president of the Confederation of the All-Indonesia Workers’ Associations, told reporters a national strike involving 10 million workers across the country will be held Jan. 10 if the government doesn’t take action against companies violating labor rights.

“If the strike happens, companies will lose about 120 trillion rupiah (about $12.5 billion) a day and we plan for the strike to last for three days,” Naniwea said.

In October, strikes crippled production at some 1,000 factories in the country, causing about 1 trillion rupiah in losses, according to the Indonesian Employers Association Apindo.

Apindo Chairman Sofjan Wanandi said recent labor protests and strikes have alarmed investors because union members are also committing criminal acts such as locking factory doors, damaging factory property and forcing other workers to join strikes.

Last month, the Ministry of Manpower and Transmigration issued a regulation limiting outsourcing practices to only security, cleaning services, catering, transportation, and oil and mining.

Employers say outsourcing is needed to keep industries competitive.

According to the ministry, only 30 percent of Indonesian workers are hired on a permanent basis, while the rest are contract or outsourced workers.

In recent years, companies in Indonesia have preferred to hire contract or outsourced workers to avoid paying severance money if they downsize.

Indonesia has some of the lowest wages in Asia, which is one reason why many investors have moved their businesses from China and elsewhere in the region where labor costs are rising.

The country’s economy is also booming, achieving growth of more than 6 percent. The largest economy in Southeast Asia has also proven resilient to the global economic crisis.

These factors make Indonesia attractive for investors.

Prolonged disputes between employers and employees, however, may raise concerns among investors about the wisdom of continuing to operate in the country.