SMALL FIRMS NEED TO NEGOTIATE STANDARD WAGE SYSTEM

By Andi Abdussalam

Jakarta, Nov 27 (ANTARA) - Workers in Indonesia are staging rallies because some companies have not paid the workers' wages as per the regulations.          Companies that have not paid their workers standard salaries are indeed small-scale firms. This is because small companies are still struggling to build their own business amidst the world economic crisis.          Substandard salary is the main factor that forces workers to stage rallies to express their frustrations and demands. That is why many workers who work in large firms do not take part in demonstrations.          According to the head of the Capital Investment Coordinating Board (BKPM), Chatib Basri, multinational companies have been able to pay their workers based on the current regulations. They are prepared to pay workers above the minimum wage requirement, and they are ready to hold dialogue sessions with workers.          The problem arises when small and medium scale companies are not able to pay the workers, as per the regulations. This forces workers to stage rallies. Some even force their colleagues who have been paid the right amount to join them, Chatib said.            He said that foreign companies are not affected by the rallies. They only affect small companies, in this case, local companies.  "So, the rallies pose no problem as long as they are carried out without violating the law," said Chatib, at the State Palace, on Monday.          Foreign companies have asked for protection from the Indonesian government so that they feel secure about their investments. "Investors came to the BKPM to ask for guaranteed protection. Therefore, demonstrations which violate the law must be acted upon," the BKPM chief said.          The chief investment official said that investors have come to him, with complaints on violent acts, which seem to have disturbed their investments in Indonesia.  The Indonesian government has informed them that it is committed to solving the problem.          "They said that because of such rallies, they cannot enter their offices because the place has been occupied by demonstrators. Even after the employers fulfill their workers' demands, the problem exists," Chatib said.          He said that four companies have sent their complaints to the BKPM. One of the companies has stopped its operations temporarily. Chatib said that BKPM will continue to encourage foreign investments in Indonesia.          "But in principle, we have to remain transparent," he said, expressing optimism that Indonesia's investment target could be achieved even if there were rallies.          The optimism is reflected in the fact that even though there are demonstrations, foreign companies such as L'Oreal and Toyota are still investing in the region. Besides, there is no foreign company that has left Indonesia because of labour conditions.          He said that the wage problem that leads to such unrest could be solved.          "The wage problem can be negotiated. After all, big companies have been able to meet the wage requirement. Small companies can put forward a detailed proposal to the ministry of manpower," he said.          "We are concerned about criminal acts, violence and hostage taking. Such cases should be tackled by the government," asserted Chatib.         "There is no company under the BKPM which has left Indonesia due to labour demonstrations. Foreign firms have paid salaries more than the minimum regional provincial wages (UMP). They become nervous if demonstrators force other workers to join their rallies," the BKPM Chief said on Monday.          With regard to a brick factory which has stopped its production, the BKPM head said that the factory has stopped its production temporarily.  "As far as I can remember, they have never said that they will leave Indonesia. I have talked to the CEO. It is a temporary closure because the company is disturbed by the demonstrators," he said.          He said that he has never received any letter from foreign companies saying that they would be closing their business.          The same sentiment was also expressed by the Chief Economic Minister, Hatta Rajasa.          "I have checked with the head of BKPM, and no investor has said that he would be closing his business," he said at a dialogue session on economic nationalism, on Saturday.          Workers have recently held rallies in many parts of the country to demand an increase in their wages.          Hatta said that their demand for a salary of Rp2 million per month is reasonable, and it should be met. "I hope employers can understand that their demand is reasonable," he said.          With regard to companies that are unable to raise their wages, he said that he will request the manpower minister to issue a regulation on this matter. He said that the state is ready to reduce corporate taxes, if necessary, to allow companies to continue operating their businesses.          In the meantime, the Minister of Manpower, Muhaimin Iskandar, said that wage problems could be solved by holding dialogue sessions. "A dialogue session with workers, employers and the government can be organised to discuss this matter," he pointed out.          He stated that labour strikes, which have been happening at a greater frequency, are not the only way for workers to present their demands to the government.      "I hope workers do not feel that strikes are the only way to express their demands. In fact, a labour strike is not an effective way because it may lead to inflation," he said.          "Workers do not have to stage a rally to make their demands and aspirations heard. They should approach labour unions, the government and their employers," Iskandar added.***2*** (T.A014/A/KR-BSR/A/A014) 27-11-2012 18:01:15