05/02/2013, 00.00
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Outsourcing and minimum wage: the struggle for the rights of Indonesian workers

by Mathias Hariyadi
In 2014 for the first time the country will celebrate Labor Day on a national scale. Criticism of President Yudhoyono and Vice President Boediono, unable to resolve the dispute over "outsourcing" of labor by firms. Industry on a war footing for a prison sentence of a businessman behind in payment.

Jakarta (AsiaNews) - A minimum wage, "outsourcing" and more recognition in the field of workers' rights. These are the main points that characterized May 1 - Labour Day - in Indonesia, a country that in the last three years has seen growing street demonstrations (especially in Jakarta) against exploitation and for the improvement of the contractual terms. A battle that has led to the full recognition of the holiday: in fact, from next year on, as established by the recent measure signed by President Susilo Bambang Yudhoyono, Indonesia will also mark "May Day" as a national celebration.

Now that the struggle for recognition of the holiday has been won, the goal is to put an end to the practice of "outsourcing", which has long been a source of conflict between business owners and workers. Outsourcing, also known as "external supply" is the term given to the practice adopted by the companies who use third parties to carry out certain stages of production. It applies both to the subcontracting of jobs, as well as for temporary employment of workers with fixed-term contracts on an annual basis.

The problem has emerged in all its magnitude three years ago and, although today there is a greater awareness on the rights of the worker, companies continue to exploit the practice to save costs. Yesterday, during the many events that have filled the streets of the capital, there was heavy criticism of President Yudhoyono and his deputy Boediono for failing to deal with the dispute.

Workers re-launched the campaign to increase the minimum wage on a regional scale (Umr), recalling the recent decision of the governor of Jakarta Joko Widodo, who ordered an increase of 40% for the weaker sections. A decision that sparked controversy and discontent among employers, who complain about a surge in the cost of production and the resulting downward spiral in profits.

Adding to the concerns of the business world, is last week's conviction of a businessman from East Java, for falling behind in his payments. The Surabaya court judged him on default and punished him with a year in jail and a heavy fine. The Association of Indonesian entrepreneurs (Apindo), now fears a rain of sentences, resulting in the collapse of the productive system.


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