APSN Banner

Indonesian Nike plant shut after protests

Reuters - April 26, 1997

Jakarta – An Indonesian plant producing shoes for U.S. athletic-wear maker Nike Inc shut down for the weekend following protests over wages by thousands of workers, a plant official said on Saturday.

Local newspapers said workers on Friday had ransacked an office and damaged cars in a two-hour protest following the failure of PT Hardaya Aneka Shoes Industri to immediately implement a pay rise.

The company is under contract to Nike.

"Things have returned to normal here, but the plant is closed for today and Sunday. The workers will return to work on Monday because the problems have been settled," the plant official told Reuters.

The official, who declined to give his name, refused to give further details, but said Saturday was normally a working day at the plant at Tangerang on Jakarta's outskirts.

There were no reports of arrests and police declined to comment.

Media Indonesia newspaper said the two-hour protest on Friday was sparked by PT Hardaya Aneka Shoes' failure to implement a pay agreement reached after 10,000 workers staged a walk-out on Tuesday.

Newspapers had said the dispute began when the company, faced with a minimum wage increase, included an attendance allowance of 16,000 rupiah ($6.60) in the monthly minimum wage of 172,500 rupiah ($70.80), meaning the workers saw no actual wage increase.

The move prompted angry workers to march from the plant to the local district parliament in protest.

In January, the government raised the minimum wage in all 27 provinces by an average of 10.07 percent effective from April 1. The minimum wage varies across the country, with workers in Jakarta guaranteed a minimum of 172,500 rupiah ($70.80).

After meetings with union representatives and manpower department officials, the company said it had agreed it would pay the basic minimum monthly wage, excluding allowances for attendance, overtime, transport, holiday pay and meals.

Indonesia, with a population of 200 million, has long sold itself to foreign investors as a good place for labour-intensive industries because of its low wage costs. ($1 =2,435 rupiah)