Bandung – Continuing worker protests may prompt at least 20 foreign manufacturing companies to relocate outside Indonesia, the Indonesian Business Council says.

Council chairman Sofyan Wanandi said the companies, mostly owned by South Korean investors, included 13 firms operating in Jakarta and its surrounding areas and seven in Karawang, West Java.

"They said they wanted to meet Gus Dur to receive assurances about security and the certainty of their operations in Indonesia," he said, referring to President Abdurrahman Wahid by his nickname. "If there is no longer any certainty, they said they would pull out," he added.

Mr Sofyan said the companies were hampered in their operations by the continuing demonstrations. Seven of the companies, including leading Japanese electronics firms Aiwa and Sony, have already halted production due to protests by their workers.

"Sony has threatened to relocate its factory to Malaysia if its workers continue their protests," he said. He noted that electronics exports were one of the main sources of government revenue.

He was sorry about the government's response to the issue, which he said mostly favoured the workers, warning that most foreign investors would leave the country if the situation remained unchanged.

"Actually, worker demonstrations are something which the President does not need to handle directly. I believe the Minister of Manpower can handle it and I have asked him to do so."

He also called on investors to be transparent with their balance sheets, noting that many demonstrations were sparked by workers' anger with investors' lack of transparency about their profits and losses.

"Transparency is important. If the investors are making profits, why not agree to the workers' demands for pay hikes as long as the demands are reasonable?" he asked.