Indonesia’s labour movement needs to consolidate the gains of 1998

Michele Ford

President Suharto’s resignation in May 1998, and the reforms that followed, changed Indonesia’s industrial relations landscape forever. Within a matter of months, the old one-union system was abolished and workers were again free to organise, as they had been before Suharto came to power. It had been a long time coming. Although some workers had tried to organise independently in the 1990s, it was decades since the Indonesian government had recognised their right to freedom of association. The question is, how ready and able were workers to seize hold of new opportunities, and where are the unions headed now?

A new era

Labour was in no position to make demands when international pressure forced Suharto’s successor, Habibie, to recognise workers’ freedom to organise almost immediately after he entered office. Industrial workers had had a tough time since the Asian financial crisis hit Indonesia in late 1997. Over a million manufacturing jobs had been lost, and the real wages of those who weren’t sacked dropped 38 per cent. It wasn’t until 2001 that they returned to pre-crisis levels, and workers began to get back on their feet. But labour activists were full of optimism — many said ‘euphoria’ — as they entered what they were convinced was a glorious new era.

The International Labour Organisation’s Convention No.87 Concerning Freedom of Association and the Protection of the Right to Organise was initially implemented through executive decisions by the President and the Minister for Manpower in June 1998. A law on trade unions was finally passed almost exactly two years later. The new law made it possible for as few as ten workers to form a union and allowed for multiple unions in a single workplace, but it did not mean the government had given up control. The Department of Manpower could still withdraw official recognition of unions that didn’t meet administrative requirements, and the courts could dissolve unions whose leaders were deemed to ‘threaten national security’. But the change in policy did give workers an unprecedented opportunity to form and register unions.

Labour’s response

There has been an explosion in the number of trade unions in the seven years since the first of the new regulations came into force. By August 2000, 24 national union organisations and over 10,000 enterprise unions had registered with the Department of Manpower. Two years later, the Department of Manpower had registered 61 union federations, one confederation, and almost 150 other national unions. By 2005, there were 86 federations and three confederations registered at the national level. Suharto’s one-union policy was well and truly dead.

SPSI, the official union of the Suharto era, consisted primarily of factory workers. In contrast, new unions emerged not only in the private industrial sector, but in finance and journalism, the public sector and in enterprises owned by the state. These developments were extremely important. Under Suharto, most public servants and white-collar employees had not considered themselves ‘workers’ and were disdainful of unionism. It took the massive retrenchments in the finance industry and hyperinflation brought by the financial crisis to convince at least some of them that they were. The trade union movement is still heavily divided along educational and occupational lines. But bank worker demonstrations and industrial disputes in five star hotels have brought unionism to a whole different constituency of workers.

The new unions come in all shapes and sizes. Some of the biggest unions evolved from SPSI, which eventually split into three separate peak union bodies. Two of its incarnations can be counted amongst the three big union confederations that now dominate the national scene. The third big confederation grew out of the Prosperous Workers Union (SBSI) — an alternative union formed by Muchtar Pakpahan in the mid 1990s to challenge the one-union policy. Collectively, these confederations claim to have over nine million members, but the figures are difficult to substantiate. None of them really want to say how many of their members actually pay dues.

Many smaller unions have also registered, in individual plants, local regions or nationally. Some of these unions were formed by worker activists formerly associated with labour NGOs (see box). Others developed in response to the failure of existing unions to represent the interests of workers. Others still have been sponsored by international trade union bodies dissatisfied by the choice of local partners. Some of these smaller unions have struggled to survive, but others have made great strides. There are plenty of good news stories if you look hard enough. Many local unions have achieved amazing things in the last six years — be it a strong negotiating position with employers or a dedicated membership base. But it hasn’t all been smooth sailing. Business is not used to having to negotiate with workers, and is often reluctant to engage (see box).

The obstacles unions face

Labour activists’ euphoria has been dulled by the hard realities of dealing with employers and the vagaries of the global economy. Despite the increase in white-collar unionism, unions remain largest in low-skilled manufacturing where workers have least bargaining power. High unemployment, extensive subcontracting and the threat of factory closures make it hard for unions to put pressure on employers. And workers worried about job security are often reluctant to engage. Workers also worry about their physical safety, as worker activists are often still subjected to harassment, physical assault, or even imprisonment.

Low union density and subsistence wages also pose enormous problems. In many workplaces only a small proportion of workers have joined a union. And even in workplaces where union density is high, workers don’t have a lot of spare cash with which to pay their union dues. As a result, it’s almost impossible for unions to pay their basic running costs from dues alone — in fact most unions rely heavily on outside funding to support their routine operations.

Most outside money comes from international trade unions, such as the International Metalworkers Federation (IMF), or trade union solidarity organisations such as the American Center for International Labor Solidarity (ACILS). Some also comes from international donors through local NGOs (non-governmental organisations). But although outside money has often been vital, even international trade union money brings problems of its own. First, there is the problem of corruption: it’s very tempting for union officials to skim a little off the large sums involved. Then there’s the temptation to let dues collection slide, because it’s much harder to collect dues. And finally, there’s the problem of control, because there are always strings attached.

Another problem arises from the fact that unions are still in their infancy, and their internal processes often leave a lot to be desired. Union leaders are struggling to balance the need to keep their unions going against the desire to make them more democratic. Almost all unions have detailed documents outlining electoral and committee procedures. But too many decisions are still made by officials in back rooms out of sight of the union membership, and leaders stay in power for too long. At one level this makes sense when unions are still fighting to establish themselves, especially as many workers don’t have the skills or time to take on union positions. But it makes leadership renewal very difficult, and gives rise to internal tensions.

Perhaps the most serious issue labour faces is the problem of focus and direction for the movement as a whole. Unionists seldom have a good word to say about each other, and cooperative efforts are few and far between. Their energy is too often wasted fighting with each other rather than working together for meaningful social change.

Moving forward

But while unions remain weak and divided, they have a far stronger role in the workplace and nationally than they’ve had for too many years to remember. Many obstacles remain, but optimism is still warranted.

It’s time, now, for a period of consolidation and planning. Most importantly, it’s time for unionists to come together and promote their common interests. This doesn’t mean they should sacrifice their independence or their differing visions. But it does require them to recognise each others’ strengths, and think strategically about the future.      

Michele Ford (michele.ford@arts.usyd.edu.au) teaches Indonesian Studies at the University of Sydney. She is also deputy chair of the IRIP Board.