Now is the time to create a fairer system

Selma Hayati

East Timor's economy has been transformed since the August 1999 referendum. First came the horrendous destruction of infrastructure by the Indonesian military, then the arrival of a large number of foreigners and associated business interests through Untaet. New urban employment opportunities have opened up in the service and construction sectors.

Foreign investors, often from Singapore and Australia, import used cars and run construction businesses. Foreign supermarkets, restaurants, and hotels import their vegetables, beer, wine and mineral water from overseas. They compete with East Timorese and Indonesian small enterprises. A highly visible split has developed between the traditional market, filled by the local community, and the foreign-owned supermarkets patronised by the rich.

Ignoring the predominant agrarian sector and even the now-defunct textile factory in Dili, the transitional government has focussed its policy efforts on the huge profits to be made from oil in the Timor Gap. Both UN Special Representative in East Timor Sergio Viera de Mello and former resistance leader Xanana Gusmao have also worked hard to ease the way to Timor Lorosa'e for foreign investors, saying they will stimulate economic growth and improve welfare. The strength of foreign capital, combined with the weakness of local business and of local law, have created structural problems these last two years. The transitional government is providing flexible legal protection for investors, while providing little protection for the rights of workers.

The year 2000 saw a proliferation of sixteen political parties and 177 national non-government organisations (NGOs). Of these, only two parties said they were concerned with labour issues - Trabalhista and the Timor Socialists. Among the NGOs concerned with labour are Laifet, Yayasan HAK, and the Australian NGO Apheda. The Timor Socialist Party has its own workers union. Meanwhile the Timor Lorosa'e Workers Union Confederation (KSTL) brings together nine unions.

Workers have campaigned on hours and overtime, on the contract work system, male and female wage discrimination, discrimination between the same type of local and foreign workers, and safety. There are also the matters of informal work, day labourers, part-time workers, and terminating employment. Labour Days have been an important focus for activists since 1 May 2000.

Workers participation?

However, the question remains how effective labour organisations have been. Whether they are political parties, NGOs, or unions, the participation of workers themselves tends to be weak. As in Indonesia in the mid-1990s, students have been the most vocal on labour issues. The two political parties who campaigned on labour issues in last year's election, meanwhile, tended to use workers merely as a vehicle so that elites could get into the Constituent Assembly.

The August 2001 elections led to a transitional cabinet that would hold office for six months. One of its new features was the Secretary of State for Labour and Solidarity. This office continues the work of the Division of Social Services and Labor of the Untaet-led East Timor Transitional Administration. It is responsible for the settlement of labour disputes. Before the election, workers would bring their dispute before CNRT and NGOs. The Secretary will also provide much-needed data on national employment, wages, and disputes.

Untaet declared at its beginning in November 1999 that all Indonesian law, thus including labour law, remains valid in Timor Lorosa'e. This has been less than satisfactory. Untaet and the national political elite opened the door wide for the entry of foreign capitalists and made Timor Lorosa�e a commodity for foreign investors to pay cheap wages and to violate workers rights without clear sanctions. Indonesian labour law also encouraged Timor Lorosa�e to lay the foundations of a developmentalism that was used by Indonesia for the last 35 years to exploit workers on a large scale.

In October 2000 Untaet drafted a comprehensive set of employment standards, and in March 2001 four new draft labour regulations followed. There was little follow-up at the time. However, early in May Sergio Viera de Mello signed into law a new National Labour Code produced by the Secretary of State for Labour and Solidarity. It covers minimum labour conditions and administrative institutions, principles and procedures on unions and labour relations, and rules on terminating employment.

NGOs, business associations, trade unions and Untaet have been involved in drafting labour regulations. But even NGOs and unions are caught in the technical issues of the regulations and have not started a debate on labour in relation to the system of national development. Even in Indonesia such technical issues have been left behind by the demand for reformation. The fundamental debates on labour politics in Indonesia could become important input for NGO activists and unionists.

Indeed, NGOs and trade unions have supported the Untaet and political elite demand for a 44-hour working week, in contradiction to the ILO standard of 35-40 hours. The tendency has been for NGOs rather than trade unions to be involved with labour disputes. Untaet, meanwhile, tended to spread information about new labour regulations to NGOs and business associations, rather than to the unions.