Elly Burhaini Faizal, Jakarta – The country's effort to increase employment has not been followed by assurances of decent work and worker protection as the number of contract-based workers has risen, activists say.
The Central Statistics Agency (BPS) said increased investments last year led to the creation of four million new jobs. Labor activists, however, warned the increased employment did not necessarily mean secure and decent jobs.
Khamid Istakhori from the National Solidarity Committee (KSN) said many Indonesian workers were forced to work in exploitative working conditions since most of them were contract-based with no social protection and lax job security.
"It's alarming since the number of people who work in an outsourcing system or on a contract basis continues to grow," he said.
"Outsourcing or contract-based employment introduced through the implementation of a flexible labor market system are the most obvious examples of worker exploitation," he said on the sidelines of a discussion titled "Decent Work and Labor Market Flexibility".
Studies show contract-based workers have workloads that are the same or even larger than tenured workers. However, they receive less work protection, the study said.
Khamid said 65 percent of employees in Indonesia were contract-based workers. However, 35 percent of tenured employees face threats of mass layoffs for various reasons, such as bankruptcy, factory relocations and company liquidation.
Asia Monitor Resource Centre researcher Fahmi said Indonesia and other Asian countries continued to face outside pressure to liberalize their labor markets, leading to the exploitation of workers.
In Indonesia, he said, the inflow of foreign investment did not create new labor markets since they were so-called brown field investments, where investors took over existing production or manufacturing facilities.
"They take over an established company, fire tenured workers and recruit new contract-based workers at a lower salary and with no protection," he said.
The flexibility of the labor market to adapt to changing environments is seen as a counter to rising unemployment. However, it has also been criticized for lowering workers' social and economic well-being.
President Susilo Bambang Yudhoyono has heavily promoted Indonesia's labor market flexibility in a bid to lure foreign investment. However, his administration has been unable to push through the reforms necessary to improve labor market flexibility.
Instead of better working conditions, those trapped in contract-based positions are vulnerable to unilaterally planned layoffs.
More entrepreneurs and business people hire workers on a contract basis or outsource in the wake of the 2003 Manpower Law, Fahmi claimed. Under the law, the government allows businesses to outsource or recruit workers on a contract basis to lure foreign investments.
There are 8,000 lecturers at the University of Indonesia who were brought in through outsourcing, while 17,000 employees at the Finance Ministry are hired as temporary workers, despite the fact that many have worked for 20 years at the ministry. More than 50 percent of the employees at state-owned electricity monopoly PT PLN are contract-based workers.
A representative from Coordination of Action Research on AIDS and Mobility-Asia, Vivian Chong, addressed the poor working conditions of domestic workers at the discussion.
"They work in poor conditions, receive no day off, are not unionized, not covered by labor laws and having no worker rights," she said.