Indonesian trade union and authorities locked in ongoing battle on minimum wage.Photo: FSPMI demonstration on Batam island

For months now, the Indonesian trade union FSPMI has been calling upon the local authorities to fix a reasonable minimum gage for workers in the electronics and metal sector. In order to press home its arguments, FSPMI has organised a series of mass demonstrations at Batam island, a free trade zone area notoriously known with the spread of precarious employment. So far, no satisfactory agreement was reached.

Indonesian trade union and authorities locked in ongoing battle on minimum wage.Photo: FSPMI demonstration on Batam island

On December 10 and again on 17 December 2008, tens of thousands of members of the IMF affiliated Federation of Indonesian Metal Workers' Union (FSPMI) demonstrated in front of the Governor Kepulauan Riau and Regent offices in Batam demanding to raise minimum wages. FSPMI points out that these wages have been eroded by the rising living costs.

During the December demonstrations several people were injured and hospitalised. "We are shocked to learn that instead of listening to workers’ demands the authorities used the police to block violently the demonstrators," said Marcello Malentacchi, IMF General Secretary, in his December 2008 letter to Kepulauan Riau Governor and Batam Regent.

Malentacchi also urged the Indonesian officials "to stop victimising Batam workers for the sake of attraction of new investors and to meet their demands about increase of minimum wages," and recommended them "to release the detained demonstrators and to do everything possible to prevent further impoverishment of the workers of Indonesia." The IMF called on its affiliates to support FSPMI by sending letters of protest to the Governor of Kepulauan Riau and Batam Regent with the demands to stop repressions, to release the detained unionists and to start negotiations with the union representatives regarding the increase of minimum wages.

By the end of December, the nine injured FSPMI members were released from the hospital but were still needing medical treatment. The detained FSPMI members were also discharged.

FSPMI is struggling for a minimum wage ranging between $135-150. In a bizarre bidding different amounts have been mentioned by the different parties involved, all way below what FSPMI is arguing for. Where the Indonesian Employers Association APINDO proposed $96 a month, the Government suggested $100. Ultimately, the Government Governor Kepulauan Riau announced the monthly minimum wage would be fixed at Rp.1.045.000 or a mere $89. The main argument for this meagre proposal is the global economic crisis. The governor explicitly mentioned the needs and interests of foreign investors and employers, while FSPMI is trying to make the authorities and industry see that the interests of workers should be taken into account as well.

FSPMI is concerned about new regulations concerning the Special Economic Zones that the government is expected to issue in 2009. According FSPMI, Batam, which is in the direct vicinity of Singapore, has been experiencing an economic growth of more than 5%. Batam island is a free trade zone area notoriously known with the spread of precarious employment.