APSN Banner

Call to repeal labour bill 'illegally subsidised' by workers' funds

South China Morning Post - November 21, 1997

Jenny Grant, Jakarta – The Government came under pressure yesterday to repeal a controversial labour law after it was revealed expenses incurred in its passage were illegally paid for by the state worker insurance company.

President of state-owned firm Jamsostek, Abdillah Nusi, admitted he used 3.1 billion rupiah (HK$7.13 million) of company funds to pay for the speedy processing of the new bill.

The money was used to cover expenses and accommodation for 60 parliamentarians and 34 ministry officials at three five-star hotels in Jakarta. Legislators moved into the hotels during their final weeks of deliberation over the bill.

Mr Nusi defended his actions, claiming they did not break the law. "The funds were small compared to the protection and bright future the manpower law gives to 90 million workers who previously had poor security," he said in the Jakarta Post.

Critics say the law should now be repealed because it was passed under dubious circumstances.

"The law is now morally deficient because they used people's money for the sake of politics," said Teten Masduki, head of the labour division at the Legal Aid Institute.

He demanded the legislators should give back any money they received during the deliberations.

Labour lawyer Nursyahbani Katjasungkana said in the Media Indonesia daily that the legislation should be cancelled, claiming if workers found out about the collusion they could riot.

Jamsostek was set up in 1992 to provide life insurance, superannuation and health care to workers. All companies with 10 employees or more must contribute 13 per cent of each worker's wage to the scheme.

Under the new legislation, workers must give three days' notice if they want to go on strike. Street rallies by workers have been banned and any industrial action must occur inside factory premises.

The controversial legislation was passed after two months of intense deliberation. It was one of the last pieces of law pushed through before the new Parliament sat on October 1.

Manpower Minister Abdul Latief, who approved the use of Jamsostek funds to pay for the passage of the bill, joked about the scandal saying it would give "publicity" for workers to take out insurance.

Corruption cases are rarely aired in public and President Suharto often steps in to protect ministers.

However, the scandal's timing could be politically fatal for Mr Latief who is now expected to be excluded from the Cabinet in March.