Who we are

Better Work Indonesia is part of the Better Work global program, which is a unique partnership between the International Labour Organization (ILO) and the International Finance Corporation (IFC).  It unites the expertise of the ILO in labour standards with that of the IFC in private sector development. Better Work Indonesia, which became operational in July 2011, is initially designed as a five-year program. The goal is to develop a sustainable approach that will allow the programme to continue independent operations after this five-year period. 
What we do

Better Work Indonesia (BWI) aims to improve compliance with labour standards and promote competitiveness in Indonesia’s apparel industry by assessing current workplace conditions and offering customized advisory and training services to factories to address their individual needs. The Better Work programme helps governments, unions and companies achieve compliance with the International Labour Organization’s (ILO) core labour standards and national labour laws through market incentives. It builds the capacity of employers, governments and unions to work together toward solutions that benefit all.

Indonesian Manpower Ministry to Update Outsource Provisions
Jakarta Globe, October 10, 2012

The Manpower and Transmigration Ministry plans to release a ministerial regulation regarding outsourcing that will accommodate demands from workers concerning benefits.
The regulation, however, does not provide for the removal of any such system in the Indonesian labor system, an official at the ministry commented.

Irianto Simbolon, the director general in charge of industrial relations and laborers’ social security at the ministry, said the new regulation will manage holiday allowances (THR), annual leaves and social security benefits for outsourcing workers.

It will also regulate the length of time that a company can hire an outsourcing company.

“There will be assurance that outsourcing workers [will] receive THR. They can also enjoy annual leave and [receive] social security benefits,” said Irianto in Jakarta on Monday.

Under the 2003 labor law, companies are actually not permitted to outsource core jobs and can only outsource five types of peripheral positions, namely security, cleaning services, catering, driving and work relating to support mining.

Read the full article here

RI manufacturing 'could boost global market share'
The Jakarta Post, October 11, 2012 

Indonesia needs to improve the cost and value-based competitiveness of its manufacturing industry to enable the sector to make a greater contribution to the economy, the World Bank says.

In its latest report titled “Picking up the Pace, Reviving Growth in Indonesia’s Manufacturing Sector”, the bank said that as demand for manufactured goods grew and inflows of foreign direct investment accelerated in recent years, the domestic industry had reached “a positive momentum”.

Domestic demand has been remarkably resilient since the start of the global financial crisis, growing by 6.4 percent in the first quarters of 2012 on the back of investment and private consumption.

At the same time, foreign direct investment in Indonesia’s manufacturing sector is also on the rise. Recent data issued by the Investment Coordinating Board (BKPM) suggests that in the second quarter of 2012, foreign direct investment in manufacturing activities reached $1.2 billion, up by more than 62 percent year-on-year.

Read the full article here
Download the World Bank's full report here
Big demands haunt investors
The Jakarta Post, October 8, 2012

Ahead of the annual negotiations on the minimum wage slated to begin next month, unions and employer associations in strategic industrial regions are preparing studies to gauge the value of labor.

Early preparations are crucial, especially for employers, as they seek to avoid the fallout that happened in January, when tens of thousands of workers blocked the Jakarta–Cikarang toll road, denying access to about 3,000 factories in Bekasi, West Java.

According to recent valuations made by the labor unions, the local minimum wage should be increased significantly in 2013.

Suparno, the chairman of the automotive unit of the Bekasi chapter of the Indonesian Metal Workers Federation (FSPMI), said that based on a survey conducted two weeks ago, the minimum wage should range from Rp 2.5 million (US$260.59) to Rp 3.3 million per month, much higher than Bekasi current’s highest minimum wage, Rp 1.49 million per month.

Apindo chairman Sofjan Wanandi said the association would not agree to include additional components in the KHL for 2013.

“Investors will simply walk out when labor costs are no longer competitive,” Sofjan said.

Read the full article here
Sukabumi Regent set Living Wage to Rp. 1.2 million
Antara News, October 10, 2012

Sukabumi (ANTARA News) - Sukabumi Regent, Sukmawijaya approve and assign the numbers of living wage (KHL) for Sukabumi, West Java to Rp 1, 2 million, after being urged by about 15 thousand protesters on Wednesday afternoon.

"I agree with the KHL's proposal so I immediately signed it in front of tens of thousands of workers who conducts strike," Sukmawijaya told reporters.

Demonstrations conducted by approximately 15 thousand workers of the Confederation of All Indonesian Workers Union of Textiles, Clothing and Leather (SPSI-TSK) Sukabumi Branch in South Sukabumi on Wednesday.

According Sukmawijaya, this signing marking a support from him to the workers so that all workers in Sukabumi can live in peace, and this KHL will be handed over to the West Java provincial government to determine the district minimum wage (UMK).

Meanwhile, Chairman of the DPC SPSI-TSK, M Popon said that they welcomes the support and the decision of the regent to set minimum wage according to the demand of workers which comes from the union survey.

Read the full article here (Article in Bahasa Indonesia)
Read the Google Translate English Version here
Growth to Slow in East Asia and Pacific in 2012, But Domestic Demand Will Play Key Role in Rebound Next Year
World Bank, October 8, 2012

Economic growth in the East Asia and Pacific region may slow down by a full percentage point from 8.2 percent in 2011 to 7.2 percent this year, before recovering to 7.6 percent in 2013. Growth in developed countries will remain modest, with recovery in the region to be driven mainly by strong domestic demand in developing countries, said the World Bank in its East Asia and Pacific Economic Data Monitor, released today.

The new report says that weak exports and lower investment growth will cut down China’s GDP growth from 9.3 percent in 2011 to 7.7 percent this year. In 2013, however, China’s growth is expected to rebound to 8.1 percent as the impact of stimulus measures kicks in, supported further by an uptick in global trade.

"The East Asia and Pacific region’s share in the global economy has tripled in the last two decades, from 6 percent to almost 18 percent today, which underscores the critical importance of this region’s continued growth for the rest of the world,” said World Bank Group President Jim Yong Kim.

Read the full article here
[Opinion] What’s wrong with outsourcing?
The Jakarta Post, October 8, 2012

The negative impacts of outsourcing on Indonesian workers have been widely debated in the last decade. It is an important issue because it is related to the wealth and future of the workers, which was clearly the message of the latest mass rally against outsourcing staged in a number of industrial regions across the country.

Generally, outsourcing is defined by Beaumont and Sohal (2004) as the possibility of using external resources to conduct product or process that used to be produced by internal stakeholders.Outsourcing is a fashionable way of solving some business problems, such as efficiency, labor cost, maintenance work and organizational size.

From 2000 onward, outsourcing was not just associated with simple cost cuts, but also with the transformation of organizations, optimization and efficiency as a tool for human resources development. A company can concentrate more on core and specialized business in order to deal with competition.

The main reason behind opposition to outsourcing in Indonesia is its implications for workers. The government, therefore, needs to immediately take action to end misperceptions.

Read the full article here
Outsourcing System: National Tripartite Coordination Institution allows outsourcing
Bisnis Indonesia, October 11, 2012

JAKARTA: National Tripartite Cooperation decided that outsourcing system are allowed, following the discussion of the final draft of Manpower and Transmigration Ministry regulations which will set up the system.

"Later, the outsourcing system is allowed through PKWT [fixed - time employment agreement] or PKWTT [unspecified time employment agreement] and outsourcing worker must be a full-time worker in outsourcing services company," said Chairman of the National Tripartite Institution Muhaimin Iskandar after a meeting with labor stakeholders, Thursday (10/11/2012).

He explained that the outsourcing work is regulated and permitted by labor agreements, using PKWT or PKWTT agreement.

Read the full article here (Article in Bahasa Indonesia)
Read the Google Translate English Version here
Better Work Indonesia

ILO Jakarta Office
Menara Thamrin Level 22
Jl. M.H. Thamrin Kav. 3 | Jakarta 10250
Tel. +62 21 391 3112
Fax. +62 21 310 0766

E-mail: indonesia@betterwork.org

Better Work Indonesia is funded by the Australian and USA Government through AusAID and USDOL



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