Workers’ Protests Shoo Away Investors
A number of investors in the shoe-making sector backed out of their plans involving Indonesia, following the recent wave of labor demonstrations at a major industrial park, an executive at the Indonesian Footwear Association said.
Haryanto, the chairman of the advisory board at Aprisindo said on Sunday that a number of companies plan to invest a total of $100 million in Indonesia, which is expected to create around 10,000 more jobs in the sector.
“There are five to six companies that already secured lands; some of them are in Tangerang. [They] decided to delay their plan to build new factories this year,” he said, referring to the $100 million investment plan.
Haryanto said the business climate had turned ugly since workers staged demonstrations over the last few weeks, demanding an end to Indonesia’s outsourcing system and demanding higher pay.
Representing the business community, Haryanto said, “We don’t ask for too many things. We just need three certainties: a predictable wage increase, legal certainty and safety from the possible ‘sweeping’ of laborers from outside factories.”
In an Oct. 3 demonstration, thousands of laborers in Cikarang, a city that harbors many industrial parks and factories making products ranging from shoes to automobiles, initiated a sweep of factories that were still running, calling their fellow laborers to join their rally in the street.
Sr. Comr. Rikwanto, a spokesman for the Jakarta Police, said there had been about 50,000 workers participating in the rallies in Bekasi, Tangerang and Depok.
A joint police-military force of 15,000 managed to ensure that the rallies did not spread beyond the industrial estates on the capital’s outskirts.
However, many businessmen complained that this rally damaged them financially after some of the protesters broke into factories that were still in running, hampering normal business operations.
Haryanto said the demonstrations, which he regarded as “anarchy” had forced shoe factories to shutter. Potential losses could be Rp 5 billion ($520,000) per day.
Haryanto said the demonstrations were likely to affect the nation’s shoe exports.
He predicted the industry was unlikely to book targeted revenue of $5 billion from exports. “If we could even match last year’s $3.5 billion, that would already be good.”
He said Indonesia is competing with China and Vietnam in the shoe business. He worried that if shipments stopped, buyers would go elsewhere.
Anton Supit and Henrdrik Sasmito, members of the advisory board of the country’s footwear association, said the practice of pulling workers off of their jobs so that they could participate in protests had disturbed business operations in the area, hurting factory owners’ bottom line.
“The government and law enforcers must act firmly against those who caused destructive action to companies’ assets,” Anton said.
Apart from demanding the government abolish the outsourcing system, protestors rejected the requirement for workers to pay part of their health insurance premiums, sharing the burden with employers, as recommended by the Health Ministry.
Presse esclavagiste (thejakartaglobe.com, 29 octobre 2012)