Jakarta (AsiaNews/Agencies) – Hundreds of thousands of workers have taken to the streets to celebrate May Day, International Workers' Day, and peacefully marched in Indonesia's major cities in protest against a draft proposal that would reform the existing labour law. In Jakarta workers from the capital and surrounding areas marched to the State Palace and parliament under tight security from the police until a downpour forced them to disperse.

"We are sending a message to the government that workers nationwide are joining forces to oppose its plan to revise the new labour law. We also demand the government declare May Day a national holiday," said Rekson Silaban, chairman of the Confederation of Indonesian Prosperity Labour Unions.

 "We are against the planned revision of the labour law because the government [. . .] wants to restrict workers' rights and create job insecurity," Khoirul Anam, deputy president of the Indonesian Trade Union Congress, added.

The 2003 Manpower Act granted workers rights such as the right to organise and the right to strike. Proposed changes tabled in parliament in April and immediately rejected by trade unions would allow companies to hire contract-based workers and outsource permanent jobs and core businesses to other companies. It would pave the way for foreign investors to hire expatriates to occupy key positions and restrict the right to strike, eliminate service payments, weaken minimum-wage provisions by 50 per cent, and give employers more power to impose disciplinary measures on employees.

Echoing the concerns of Indonesian employers, the government of President Susilo Bambang Yudhoyono views the existing legislation as too pro-labour. Instead, the government wants to improve the country's investment climate and bring back investors who fled after the 1997-98 Asian financial crisis.

Presently, Indonesia has to face stiff competition from China and Vietnam. In these two countries, severance pay is respectively ten and five times monthly wages compared to 30 in Indonesia.

This year Jakarta is hoping foreign direct investment will reach US$ 10 billion, about a third of the peak it reached before crisis.

Labour leaders countered the government's arguments by saying that it should instead reform the country's tax system, improve services (especially in non central areas), cut down on red tape and fight widespread corruption.

Almost as evidence of this, on April 28 the government replaced the powerful heads of the tax and customs departments, where graft has been rife, and announced plans to reform the public service, seen by many as utterly corrupt and a leftover from former President Suharto's regime. (PB)