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About the Author
Madhumita Dutta is a Postdoctoral Fellow in School of Labour Studies and Employment, Pennsylvania State University, USA.
Peter Birke is Researcher at the Sociological Research Institute Göttingen (SOFI), at the University of Göttingen. He has published more specifically on the global social movements after the 2009 financial and debt crisis. Birke is editor of the journal Social History Online http://duepublico.uni-duisburg-essen.de/go/sozial.geschichte-online.
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Labour Strikes in Post-Authoritarian Indonesia, 1998–2013
Fahmi Panimbang and Abu Mufakhir
This chapter discusses labour strikes in post-authoritarian Indonesia between 1998 and 2013, including the occurrence of general strikes in 2012 and 2013. Recovering from dictatorship since Reformasi in 1998, the labour movement has increased its capacity for protest mobilization. It shows that workers and labour unions are capable of articulating their political aspirations with a combination of various strategies of legal and non-legal activities (direct actions, street politics). It argues that the coalitions of labour unions from different federations at the grassroots level and their increased capacity to mobilize workers have played a major role in successful strikes. Nonetheless, the state and the capital have also consolidated their power to enact countermeasures against labour.
LEGACIES OF THE AUTHORITARIAN ERA
Although Indonesian workers and labour unions are recovering from the dictatorship of the Suharto regime (1967–1998), its legacies remain to form the context in which they exist today. Labour unions face a number of impediments in their mobilization, including organizational fragmentation and the decimation of the Left. The corporatist system that was formulated by the regime in 1974 to create harmonious industrial relations has profoundly shaped labour relations until today.
During the Suharto era, a formerly vibrant labour movement was violently curtailed and the Left decimated with the massacre of hundreds of thousands of communists in 1965–1966. The regime banned leftist unions, which had played a significant role in independence movements and the dismantling of colonialism. In 1973, the regime brought together the moderate and conservative unions under the umbrella of the Federasi Buruh Seluruh Indonesia/All Indonesia Labour Federation as a single trade union federation. It changed its name in 1985 to Serikat Pekerja Seluruh Indonesia/All Indonesia Workers Union (SPSI). This solely recognized trade union federation was heavily manipulated by the regime and served to control workers rather than to promote their rights.
Repressive labour policies were reflected in regulations that allowed military intervention in labour disputes, which resulted in severe suppression. Grievances were strictly regulated in the industrial dispute system, virtually allowing authorities and the military to suppress any resistance. Nonetheless, the regime never succeeded in completely eliminating independent labour organizing.
Non-governmental organization (NGO) activists, student-sponsored workers' groups and self-styled 'alternative unions' extended their support for labour organizing in the 1980s and since, despite running the risk of being labelled communists and falling foul of the regime. In the early 1990s, spontaneous industrial actions increased in industrial areas around Jakarta. An unprecedented massive workers' strike at the tyre factory PT Gajah Tunggal in Tangerang, West Java, occurred in 1991 and subsequently spread to other industrial estates in Surabaya, East Java and Medan in North Sumatra. This was followed by the detention, kidnapping and murder of workers and activists who played a major role in the strikes (Kammen 1997).
The Suharto regime controlled and sought to depoliticize workers by fostering a corporatist industrial relations system that prevented non-workers or outsiders – including NGOs, academics, social activists and intellectuals – from promoting workers' rights and organizing them (Ford 2009). This has left an authoritarian legacy for labour relations today: workers are still largely not unionized, and SPSI, the former state-controlled union that is essentially unchanged, remains dominant and has the largest number of members. Workers were ill-placed to benefit from the drastic changes in Indonesia's political and social landscape after the downfall of Suharto (Hadiz 2004). Organized labour entered the immediate post-authoritarian period with little political power. International pressure, rather than domestic labour activism, was the key factor in forcing Suharto's successor, B. J. Habibie, to fundamentally change the industrial relations system: the adoption of basic rights, including freedom of association. Ironically, at the same time, the new administration embraced market-oriented and flexible labour policies. This double transition of Indonesia towards a free market economy and (neo)liberal democracy occurred under the pressure of the International Monetary Fund and World Bank during the Asian financial crisis in 1997 which forced the country to adopt austerity measures and structural adjustment programmes.
Some of the features of industrial relations in Indonesia's post-dictatorship phase are that they are liberal, flexible and decentralized (see also Tjandraningsih 2011). A flexible labour market policy was implemented to create a 'friendlier' pro-business environment. Since the enactment of Law No. 13/2003 that legalized contract work and put labour outsourcing practices into effect, employers turned their workers into more casual, contract; hence a more precarious workforce.
Since 2003, it has been the norm for companies to have three groups of workers – permanent, contract and outsourced (agency) workers. They are different in employment status and consequently in receiving wages and benefits, despite doing the same job. An outsourced worker does not get hired directly, but through an employment agency. The worker remains the employee of the employment agency and is temporarily contracted to work at a factory. Thus the factory is neither responsible for the worker's social security payments nor responsible for providing medical insurance, paid holidays, paid sick leave or any other benefits provided to regular workers as required by law. And importantly, in practice, the employment agency that contracted out this worker does not provide him or her with any of those benefits either.
A contract worker, one level 'better' than an outsourced one, is one hired by the company but unlike the permanent/regular worker does not get any benefits – he just gets little higher wages than the outsourced worker and is directly hired. Therefore, outsourced workers are paid less than contract workers, who in turn are paid less than the permanent ones, who receive minimum wages and several benefits such as transport allowances and annual bonus. The practice of using a large number of outsourced workers, contract workers and recent graduates (e.g. apprentices and trainees) as full-time workers who are usually paid less than the minimum wage puts tremendous downward pressure on the wages of all workers.
Numerous sources indicate that the typical composition of labour in a company is as follows: 20 per cent permanent, 30 per cent contract and 50 per cent outsourced (agency) workers. A study has shown the drastic increase of contract and agency workers in many companies. Even those with permanent employment status were transformed into contract workers by the management in order to cut labour costs (Tjandraningsih 2011). Such contractualization happened even before the enactment of Law No. 13/2003, but the law legalized the practice.
LABOUR STRIKES SINCE 1998
Freedom of association was easily gained after Suharto was overthrown in May 1998. The adoption of this basic right provided a space for workers to express their aspirations freely. Workers' demonstrations and strikes began to occur massively. Initially, workers were only able to demand a meagre increase in allowance since demanding a wage increase was still too difficult. For instance, in February 1999, more than 5,000 workers of PT Maspion, a joint venture of South Korea's Samsung in Surabaya, East Java, went on strike for several days, demanding a small amount of allowance increase for food and transportation (for more details, see Appendix 1.1 at the end of this chapter). Despite that, authorities were still blatantly repressive in dealing with the striking workers (Detikcom 17 February 1999).
Later, workers became more aware that they were free to organize and that this was guaranteed by law. Many new unions were established, and several others spilt off from SPSI, the conservative union. Workers started to protest not only in front of factory gates but increasingly expanded to places they saw as power centres, including government buildings and parliament (table 1.1). Moreover, several unions have been able to develop new strategies against the employers. Since 2009, with a combination of legal knowledge and skills, they have successfully brought a company's general manager to criminal prosecution and eventually to jail for dismissing union leaders due to their labour activities (Tjandra 2010). In later years, they were also able to put several employers to jail for not paying minimum wages (Taufik 2013; DetikNews 24 April 2013) (see the last section of this chapter for a case in point).
As regulations are not favourable and a hindrance to workers, workers also began to abrogate formal and legal mechanisms for strikes that require unions to report to the police several days earlier. Workers often took direct actions such as toll road blockades and factory raids, and even occupied an entire industrial area. One such occupation in the industrial heartland of Bekasi, West Java, in 2012, caused a total collapse of an industrial estate. These widespread industrial actions have involved thousands of young working women and men, mostly between the ages of nineteen and twenty-five.
Although the demands during protests are varied and workers have gradually been able to make gains beyond basic rights, most of the grievances concerned basic rights such as claims for unpaid wages, the right of collective organization and a regular employment status as it is guaranteed by the law (table 1.2). One of the major problems is that the state agencies do not fulfil their role in monitoring the companies. For instance, in Tangerang, Banten Province, for 2,300 companies, there are only seven inspectors; in Batam, Riau Islands Province, for 4,000 enterprises, there are only three inspectors; in Bekasi, West Java Province, for 3,000 companies, there are only five inspectors; in Karawang, West Java Province, for 1,400 firms, there are only seven and for the hundreds of companies in Pasuruan, East Java Province, there are only five inspectors (Tjandraningsih 2011). Labour activists claim that inspectors are not doing their job. It clearly reflects an anti-labour regime that prioritizes the interests of corporations over workers (Pandita and Panimbang 2013). Despite all of this, workers continue to fight for justice.
Industrial actions began to increase steeply from 2008 following the global economic crisis, in response to employers attempting to tighten labour control and suppress wages to overcome increasing competitive pressure. Between 1998 and 2013, labour protests involved more than 6.3 million workers, not counting the massive mobilizations during May Day celebrations each year (table 1.3). There was an increase in industrial actions all over the country, notably during 2011–2013, with more than 100,000 workers participating in May Day rallies, and more than 2 million and 3 million workers participated in the general strikes in 2012 and 2013, respectively. Workers demanded decent wages, regular employment status and better working conditions. Their protests were a great success, illustrated by average minimum wage increases of up to 48 per cent in 2013, as a result of general strike in 2012. The increase was 13 per cent, 48 per cent and 19 per cent in 2012, 2013 and 2014 respectively, or 27 per cent on average throughout those years (LIPS 2014).
One of the key factors for the rise of the massive protests and mobilizations that escalated into general strikes was the workers' unified response against a series of refusals of the Indonesian Employers' Association (Apindo) to implement the governmental decree on the increase of minimum wages. The workers' demand for a wage increase was reasonable as annual inflation was as high as 8.4 per cent, and minimum wages were not sufficient to meet basic needs (Arshad 2013). Apindo had argued that a wage increase was not favourable for the business climate. In early 2012, Apindo even filed a suit to revoke the governmental decree (Yulisman 2012; The Jakarta Post 25 January 2012). This enraged the workers, who got intensively radicalized in different organizing initiatives. Street protests and direct actions became more popular among workers. A wave of strikes occurred, putting pressure on the wage councils (composed of employers, workers and the government) at the district, provincial and national levels.
THE GENERAL STRIKES IN 2012 AND 2013
The year 2012 witnessed an increase in the scale of strikes not only in terms of its quantity and geographical spread but also in terms of the number of workers involved. These huge mobilizations included a demonstration to revoke a government plan to increase fuel prices in early 2012. For the first time in Indonesia's history, such a plan was finally suspended due to strong opposition from the people, in which the labour movement played a leading role.
Preceding the strike, between May and November 2012, thousands of workers mobilized in a relatively new experience of factory raids that took place in the industrial heartland of Bekasi, West Java. The workers' key demand was to change their work status from outsourced/agency into regular/ permanent workers. It is mandated by law that employers ought to legally absorb their contract workers as regular workers after two years of employment, but employers would not do so. The raids were undertaken after several negotiations did not end with an agreement, or when it was proven that employers did not keep their promises.
A large number of workers would gather almost every night and day in a different occupied company, moving from one factory to another. The length of factory raids varied. They mostly lasted one to three days in a factory, but in some cases, an occupation went on for several weeks as the management refused to meet workers' demands. In many cases the raids ended with the management finally agreeing to sign a joint agreement to fulfil workers' demands to change their work status from outsourced/agency into regular/ permanent. Workers themselves called this factory raid as a workers' celebration or festivity (hajatan buruh). The factory raids happened in around 100 factories and managed to change the status of almost 100,000 contract workers into regular employment (Mufakhir 2014).
This success led to the general strike. This nationwide strike was held on 3 October 2012, the day when the wage councils at the district, city and provincial levels would negotiate the annual wage increase. Through an alliance of labour unions called Majelis Pekerja dan Buruh Indonesia/Indonesian Labour Assembly, workers made the following demands to the government: (1) to eliminate outsourcing practices and ensure job security; (2) to end the low wage policy and (3) to enact social security regulation. More than 2 million workers participated in the 2012 general strike, and it spread over thirty-five cities and districts in twenty provinces and eighty industrial estates all over the country. During this strike, tens of thousands of workers managed to occupy the country's oldest, worst and most notorious export processing zone, Nusantara Bonded Zone, in Cakung, North Jakarta, which consequently paralysed seven other industrial estates in Bekasi. These industrial estates are the backbone of Indonesia's economy as they contribute 46 per cent of the country's total non-oil-and-gas exports. Thousands of workers also blockaded a number of toll roads for several hours. This collective action finally brought about a sharp increase in the minimum wage of 48 per cent on average across regions. It was the first general strike after the dictatorship had ended in 1998.
The second general strike lasted for two days, 31 October and 1 November 2013. A week prior to this general strike, a wave of strikes escalated in different cities where industrial estates were located. This was meant as a warm-up. A new alliance called Koalisi Nasional Gerakan Buruh/National Coalition of Labour Movement was formed to play the central coordinating role. Three major labour confederations and forty labour federations declared their endorsement. These included the Indonesian Trade Union Confederation, Confederation of National Labour Unions, GSBI (Federation of Independent Labour Unions) and Sekber Buruh (Joint Secretariat of Labour).
Subsequently other unions and federations too joined. The coalition demands were: (1) a 50 per cent increase in the minimum wage; (2) elimination of outsourcing practices and guarantees for job security and (3) a revocation of the pro-business Presidential Instruction on Minimum Wages that was issued in 2013. The instruction was President Susilo Bambang Yudhoyono's response to accommodate the interests of business groups that complained about the minimum wage increase.
As a part of the coalition, the Federation of Seaport and Transport Labour Unions mobilized thousands of its members, occupying the country's largest international seaport of Tanjung Priok in Jakarta. This occupation caused a total collapse of the port. In total, more than 3 million workers participated in the 2013 general strike, which managed to disrupt production in forty industrial zones. However, a number of strikers were attacked by thugs, and some of them were severely injured (Koi 2013; Suparman 2013). The counterattack from authorities and employers was very repressive. The use of private actors to repress labour resistance has been a practice since the 1980s during Suharto's dictatorship. It is discussed later in this chapter.
There have been some notable achievements of the labour struggle. Between 2011 and 2013, there were at least three major campaigns whose demands have been adopted into government regulations. One, workers demanded to take more wage components into account, following which the government increased minimum wages, as the list of wage components (around sixty items) was adopted into Minister of Manpower's Decree in 2012. Two, more restrictions on irregular or agency work have been recommended by the judiciary. A group of workers submitted a judicial review to the Constitutional Court to question the scope of employment and limitations of the recruitment of outsourced (agency) workers. As the judicial review was finally accepted in 2012, the court suggested that the government issue stricter regulations in impeding employers from recruiting contract and agency workers. The government was forced to issue the Minister of Manpower's Decree No. 19/2012. Three, the enactment of a social security policy was legislated. Despite controversy and debate within the labour movement around it – as this policy is based on monetary contributions and not universal free healthcare (hence it works like a private insurance) – this policy was successfully enacted to cover all citizens with health insurance, which was previously restricted to formal workers, civil servants and members of the military.
Excerpted from "Workers' Movements and Strikes in the Twenty-First Century"
Copyright © 2018 Jörg Nowak, Madhumita Dutta and Peter Birke.
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