Today Indonesian workers will celebrate May Day amid deep concern over the weak labor movement and the global financial crisis. Erwin Schweisshelm, director of the Friedrich Ebert Stiftung (FES) Indonesia, which facilitates labor meetings and education programs here and in Europe, addressed these issues in an interview with The Jakarta Post's Ridwan Max Sijabat here on Thursday. The following is an excerpt.

What do you see as the role of labor unions amidst the global economic downturn, with employers preferring to employ cheap, contract-based workers?

In the first place we see that workers and the poor have to pay the bill for the mess that has been created by greedy investment bankers, managers and the like, and by politicians that have failed to regulate financial markets around the world, which gave way to casino capitalism. The economic crisis is a consequence of the credit crunch, it's contract and agency laborers that suffer first. Not only in Indonesia, but also in countries like Germany they are the first to be laid off since they are less protected and are "second class workers" in legal terms. Unions have only limited leverage here since laws are made by the parliament. There have to be limits to outsourcing and the excessive use of agency workers. Unions like the Indonesian Metal Workers Federation (SPMI) do a lot to help their colleagues that are employed by labor agencies. But they have to find allies in politics that will improve the legal framework. Hopefully the new parliament will be more interested in workers issues.

How can unions incorporate this reality when they have traditionally fought only for job security in the formal sector?

That is a valid question. It is very difficult to organize the informal sector because you do not have the traditional employer-employee relationship, but mainly deal with self-employed workers or entrepreneurs. Organizing these people to fight for their interests is different from union organizing since minimum wages, collective agreements, etcetera, do not apply. There are some civil society groups that do this job, through forming associations, helping with microcredit, informal insurance, etcetera. Unions have to pay more attention to this issue, though they still also have to do their job in the formal sector, where only 10 percent of workers are organized in real unions. I also do not want to glorify the informal sector. It's also important to enlarge the formal sector.

What is your comment on the labor movement in Indonesia?

There is shadow and light. Unions are not well organized, even in the formal sector, and have no political allies. But I see a couple of young but professional unions and union leaders in the metal industry, commerce and financial sector and others that have built strong unions with real negotiating power, but who also know that social partnerships are of mutual benefit (to employers and workers) and that industrial action is only a means of very last resort.

What are the major factors preventing the labor movement in Indonesia from becoming stronger?

The labor movement in Indonesia has been strong in the past, in the fight for independence and in the early years of the republic for example. In 1998, the then president Habibie ratified all core labor conventions of the ILO, including the right to organize. Since then, trade unions have been mushrooming in numbers, but not in strength. Trade Unions have to learn to become free, democratic and financially independent, but there has been a lot of progress in the past few years.

Why are workers less interested in unionizing? What is your comment on the reality that more than 90 of labor federations are registered with the government but most have very few members and exist in name only?

A genuine trade union culture is just developing. Members will only be willing to become active and pay the necessary union fees if they receive benefits – in terms of better wages or working conditions at the workplace and at the political level through better protection, improved labor inspection and a sustainable system of social security that would allow workers to participate in shaping their welfare.

Will you share the Germany experience in making strong labor movement, please?!

In my own experience the strength of the German labor movement is due to its unity, since there is only one united national movement; it's not fragmented like in Indonesia. Secondly, German unions are politically independent, but not politically neutral. Their unity and large membership allows the unions to address the politicians with their demands and the politicians cannot afford to ignore a dialogue and consultation with the unions, otherwise they risk political damage.

Do you think the 2003 labor law is too harsh or unconducive to foreign investment?

These are difficult questions. Maybe there are some regulations like the one on compensation packages (pesangon) that deter investment. But as long as there is no unemployment insurance, why should unions give up this protective clause in case of retrenchment? In general, I do not think the law is too harsh. Nowadays, China often has higher wages and better regulations for agency labor than Indonesia, and still growth over there is higher than here. A motivated workforce and social stability are key for increased productivity and thus competitiveness. Decent wages mean sustained domestic demand, which is crucial in this global economic crisis. Improving the quality of human resources is at the bottom of all this and responsible unions will be more than happy to cooperate with employers to improve skills and vocational training.