I Made Sentana, Bekasi – Yudi Winarno hasn't left work in almost a month. But he's not working overtime. Mr. Winarno is leading a sit-in of about 900 of the 1,500 workers at PT Sony Electronics Indonesia, a unit of Japan's Sony Corp.
They are protesting recent changes in labor conditions and benefits at the television and stereo factory. The action is part of a growing wave of labor unrest across Indonesia, one that is becoming a major headache for local and foreign companies trying to do business here.
Two years after the fall of authoritarian President Suharto, who ruled the sprawling country for 32 years, some say the newfound labor activism is starting to derail new investment, and could threaten Indonesia's budding economic recovery.
Some foreign investors, including Sony, have threatened to relocate their plants out of Indonesia if labor strikes continue. The government is also concerned.
Foreign investment will only return to Indonesia "if there is no violence, no anarchy, no wild strikes," says Kwik Kian Gee, senior economics minister, who argues that the worker unrest is an inevitable result of Indonesia's painful transition to democracy.
In a recent interview, Mr. Kwik noted that in some labor-unrest situations, workers march into factories and force nonstriking workers to join them on strike. "An Indonesian company is affected by this kind of behavior every single day," he says.
Scores of companies in Bekasi, about 60 kilometers east of Jakarta, and other key industrial areas around the capital are suffering from similar worker unrest.
For about a month, PT Maspion Kencana, a plastic-sheeting maker, has operated its factory in Bekasi with only about half of its work force. Most of the other employees say they won't work until Maspion raises wages.
Last month, auto maker PT Indomobil Sukses International shut its plant in Bekasi for more than a week while workers were on strike in an effort to secure higher take-home pay. And PT Argha Karya Prima Industry, the largest maker of flexible packaging in Southeast Asia, said Wednesday that it has suffered losses of around 16.5 billion rupiah ($2 million) due to strikes since May 10.
At the Sony plant, Mr. Winarno says the strikes across the country are taking on a momentum of their own, prompting more workers to dare to seek better conditions and challenge their management.
"The freedom of association is very educating and enlightening," says Mr. Winarno, a former assembly-line worker at the plant and currently part of Sony's administrative staff. "We know what our rights are now.
We now dare to challenge the company's unfair treatment of us." The Sony workers say they want a change in what they call unfair new working conditions and an 80% pay increase. The workers also want a guarantee from Sony that no staff will be laid off, and that senior Japanese managers return to Japan and Indonesians be promoted in their place.
Sony says it is negotiating with the workers and wants to stay in Indonesia. "We haven't reached agreement [with the workers] so far, as these are unreasonable demands," said Masakazu Toyama, Sony Indonesia's assistant general manager.
According to the Ministry of Manpower, there were 125 reported strikes during 1999. During the first quarter of this year, however, 52 strikes have already been reported. And labor officials say the actual number of strikes is perhaps 10 times higher than official statistics show.
The growing activity is a big change from the situation under Mr. Suharto, whose administration kept workers on a tight leash. Only one government-controlled union was allowed, and it generally actively discouraged workers from striking. The police and military also had a role in restricting labor activity, and one prominent labor activist, Marsinah, died under mysterious circumstances in 1993. Since 1998, when the government authorized new and independent unions, 35 new organizations have sprung up.
The strikes first exploded in late 1997 when the onset of the Asian financial crisis caused the rupiah to plunge and sent inflation soaring, severely hurting workers' purchasing power.
The economic crisis pushed the number of Indonesians living below the poverty line to 49.5 million in December 1998 – a little more than 24% of the population, compared with 17.6% before the crisis, the Central Statistics Bureau said. That figure has fallen since then, however, with roughly 18.2% of Indonesians living in poverty in August 1999, according to official statistics.
Dita Indah Sari, chairperson of labor union Front Nasional Pejuang Buruh, reckons that 90% of strikes are motivated by demand for better salaries. "Other than that, workers strike because many companies violate work agreements," she said, adding, "The workers are angry because there is no legal punishment for the violation of such agreements." Ms. Dita predicts that strikes in Indonesia will increase if the economy remains stagnant. Ironically, some believe that the strikes themselves could help bring stagnation.
The government expects the Indonesian economy to grow a little more than 4% this year, although the Central Statistics Bureau said recently that this rate could fall to just 1.5% if political instability and security problems persist.
Realizing the risks to the recovery, President Abdurrahman Wahid last week ordered the Manpower Ministry to take an active, but impartial role to help settle labor disputes. He also ordered the chief of the national police to recruit more personnel to quell looting of plantations.
Employers say the labor disputes are a major problem for them, especially with many companies still struggling to recover from the economic crisis. "We're aware of our responsibility to increase the welfare of our workers, but sometimes they demand unrealistically high wages," said an executive with a South Korean company in Jakarta.