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.

World Bank: Wage Increase Presses Jobs
Tempo Interactive, December 18, 2012

TEMPO Interactive, Jakarta: The World Bank highlighted several policies by the Indonesian government related to economic growth. One is about the minimum wages of provincial/district/ city (UMP).

Chief economist and economic adviser to the World Bank Indonesia, Ndiame Diop, said that deciding the amount of minimum wage must be monitored so as not to interfere with investment and the increasing people’s demand, as bot sectord are the main drivers of Indonesia’s economic growth.

"Policies related to minimum wage employment are crucial to avoid chaos. It has a thorough nature that encompasses the interests of all parties," he said during a press conference at the Intercontinental Hotel Ciputra, Tuesday, December 18, 2012.

As previously reported, Jakarta’s minimum wage was raised by 43.9 percent from Rp 1.53 million to Rp 2.2 million. Substantial increase also occurs in East Kalimantan, reaching 49.7 percent. On the other hand, there are provinces that decided upon lower interest such as Papua (7.9 percent) and North Sumatra (8.8 percent).

Read the full article here
Read the full presentation from World Bank here

Sectorial workers to get higher wages
The Jakarta Post, December 17, 2012

The Jakarta Remuneration Board set the 2013 minimum provincial wage for different sectors (UMSP) between 5 to 17 percent higher than the standard wage, despite there being no agreement between employers and workers.

Board chairman Deded Sukandar said on Sunday that although there was no deal between the two, the UMSP had to be set.

“There have been four bipartite meetings between employers and workers but no solution was reached. The board finally made a decision on Friday because we needed to settle this immediately,” Deded, who also works at the Jakarta Manpower and Transmigration Agency, said.

He added that the recommendation would be submitted to Governor Joko “Jokowi” Widodo on Monday.

Read the full article here
Minister of Manpower and Transmigration posted Circulation Letter to Anticipate Minimum Wage Hike
Antara News, Desember 18, 2012

Jakarta (ANTARA News) - Minister of Manpower and Transmigration Muhaimin Iskandar issued a Circular Letter in anticipation of the impact of the business continuity in labor-intensive industries (textile business, footwear and toys industry) due to minimum wage increase in 2013.

"The increase in the minimum wage is significant compared to the previous years it should be well anticipated. We want to avoid that the hike resulting in reduction of the number of workers or reducing employment opportunities for workers," said Head of Public Relations of Ministry of Manpower and Transmigration Suhartono at the Ministry of Manpower and Transmigration office here on Tuesday.

Circular No. 248/Men/PHIJSK-PJS/XII/2012 was addressed to 33 Governors in Indonesia and issued on December 17, 2012
The number of labor-intensive industry engaged in the field of textiles and textile products, footwear and toys industry were 2510 companies with the number of workers reaching 1,593,792 people.

Read the full article here (Article in Bahasa Indonesia)
Read the Google-translated English Version here

392 Companies in Jakarta request for postponement
Kompas.com, December 18, 2012

JAKARTA, KOMPAS.com - Until tonight, the number of companies that seek deferral on the implementation of Jakarta Minimum Wage 2013 continues to grow. After 55 companies listed in the official labor force, on Tuesday (18/12/2012) earlier in the evening as many as 337 companies seek deferral from the UMP through the Indonesian Employers Association.

The number of companies that seek deferral from the UMP, said Sarman, is very significant because it employs thousands of workers. "As an illustration, the 60 companies in the KBN Cakung alone employs 500,000 migrant," said Jakarta Wage Council members from employers elements, Sarman Simanjorang.

Head of Manpower Administration Deded Sukandar stated earlier that the UMP deferral should be verified by the financial audit and approved by workers. If not, the application will not be granted.

So far there are four companies that have been approved with the deferral of 2013 UMP all of which are South Korean investors. The names of companies, among others, PT GL Communications, GL Consulting, Strategic Pest Control, and PT Mitra Clothing Aperemindo.

Read the full article here (Article in Bahasa Indonesia)
Read the Google translated English Version here
Create Job Opportunities, Receive Incentives
Tempo Interactive, December 18, 2012

TEMPO Interactive, Jakarta:Acting Head of the Fiscal Policy Office, Ministry of Finance, Bambang Brodjonegoro, said the government would provide incentives for certain industrial sectors with the potential to create relatively many job opportunities. Some of the sectors were labor-intensive, such as the garment, textile, and footwear industries.

"There is a reason for labor utilization. Labor is absorbed by the business world through investments. Therefore, incentives will be given to said investments. Next year, we would like to create incentives for investments that absorb labor in relatively large numbers," Bambang said at the Coordinating Ministry for the Economy on Dec. 17.

Without going into details, Bambang said the incentives were expected to reduce corporate income tax from the company gross. "We will not use an exact formula. The important things are the types of work, and that the sector is labor intensive. The details will follow. We will make the policy first," he said.

Read the full article here 
Businesses expected to stay in W. Java, despite wage increase
The Jakarta Post, December 14, 2012

The West Java administration is hoping that garment industry executives will not relocate their businesses to other provinces after the local minimum wage goes up in 2013.

The administration’s comments apparently contradicted Indonesian Textile Association chairman Ade Sudrajat, who said that at least 50 garment companies in West Java would likely relocate to Central Java due to a minimum wage for 2013 that was described as “too high” and not competitive.

The companies planning to move are located in areas that have approved significant increases, such as Bekasi, which will raise its monthly minimum wage from Rp 1,470,000 (US$ 152) to Rp 2.1 million for 2013; Bogor municipality, from Rp 1,174,200 to Rp 2,002,000; Bogor regency, from Rp 1,269,320 to Rp 2,002,000; and Karawang regency, from Rp 1,269,227 to Rp 2 million.

Ferry Sofwan Arif, the head of the West Java Industry and Trade Office, said that he has offered to relocate the disaffected business to other regions in the province with lower minimum wages.

Read the full article here
BI Projects 2013 Inflation at 4.9 Percent
Tempo Interactive, December 19, 2012

TEMPO Interactive, Jakarta: Bank Indonesia (BI) projects that inflation will reach 4.9 percent by next year, mainly driven by the 15-percent electricity tariff hike and the 45-percent provincial minimum wage increase. The projection was delivered by BI’s Director of Monetary and Fiscal Policy, Perry Warjiyo, after launching the Indonesia Economic Review and Outlook 2013 bulletin on Tuesday, December 18, 2012.

Perry said that the increase in electricity tariff accounts for 0.2 percent towards inflation while the minimum wage increase accounts 45 percent accounts for 0.25 percent.

Despite having not been decided by the government, the central bank calculates that a Rp 500 increase in fuel price (per liter) contributes 0.3 percent towards inflation.

The December 2012 actual inflation is estimated at 4.3 percent. "For the month of December alone inflation is predicted around 0.5 to 0.6 percent, for the end of year it is projected at 4.3 percent," he said.

Read the full article 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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