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.

SBY signs instruction on minimum wage
Jakarta Post, 30 Aug 2013

President Susilo Bambang Yudhoyono, as part of the government’s efforts to avert further massive layoffs amid the current economic slowdown, signed on Thursday a presidential instruction that set a new structure for labor-intensive minimum wages.

The move was revealed by Manpower and Transmigration Minister Muhaimin Iskandar after the signing. Muhaimin said that the new formula, as regulated in the instruction, could be used at the end of the year to determine next year’s wage increase.

“As instructed by the President, the increase [of the labor-intensive minimum regional wage] must not exceed the current inflation rate plus 10 percent,” Muhaimin said.

Read the full article here

Five Labor-Intensive Industries to Enjoy Tax Relief
Tempo, 28 Aug 2013

The Finance Ministry will soon ratify the regulations in tax postponement and tax payment relief for labor-intensive industries. “They’re already at the stage of finalization, hopefully it will be done today,” Finance Deputy Minister Mahendra Siregar said yesterday, Tuesday, August 27, 2013.

On Monday, Mahendra said, Finance Minister Chatib Basri consulted the House’s Finance Commission to pinpoint the industries receiving the tax relief. “It’s been agreed, five labor-intensive industries would enjoy the tax relief: textile, garment, footwear, toy, and furniture,” he said.

The tax relief for the five industries includes the postponement of income tax payment of 25 percent each month and up to 50 percent for export-oriented industries. The second incentive is postponement of tax payment until April next year.

Read the full article here

Boediono Warns Local Leaders Against Minimum Wage
Jakarta Globe, 27 Aug 2013

Vice President Boediono urged local leaders on Tuesday to resist pressure to raise minimum wage in the run up to the 2014 election.

“We all support the welfare of workers — we don’t want to be a country whose economy excels by selling cheap labor,” Boediono said at a meeting in Yogyakarta, according to his website. “If we force minimum wage increases, what will follow is the exit [of businesses] and we will have to suffer the loss. That is the role of the regional administration.”

Indonesian minimum wage is set at the provincial and district level. Low minimum wage maintains inflation and prevents job termination, according to Boediono. Rising commodity prices and increasing production costs have put burdens on Indonesian businesses that could lead to eventual layoffs.

Read the full article here
BPS Targeted to finish Minimum Wage Survey before 2014
Republika, 29 Aug 2013

Indonesia remains the top destination in the Southeast Asian region for corporate expansion, according to a survey released on Thursday, despite the many challenges companies cited in conducting business here.

The survey, carried out by the American Chamber of Commerce in Singapore (AmCham Singapore) and the US Chamber of Commerce, said corruption was “overwhelmingly” identified as the greatest drawback in Indonesia.

In a poll of 475 senior executives from US companies operating across Southeast Asia, 79 percent of respondents reported that their companies’ level of trade and investment in the region has increased over the past two years, and an overwhelming 91 percent expect it to increase over the next five years.

- See more at: http://www.asean-investor.com/indonesia-still-at-top-for-investment/#sthash.wqBXtyrU.dpuf
Central Bureau of Statistics ensuring that the survey of decent living (KHL) to determine the amount of provincial minimum wage (UMP) will be completed before 2014. "Before 2014 will have to finish, but we can try to finish it on November but we will have 'shortness of breath'," said Director of Statistics, Distribution and Service BPS Sasmito Hadi Wibowo after  Coordination Meeting of the UMP with relevant ministries in the Ministry for Economic Affairs, Jakarta, Thursday (29 / 8).

Sasmito said that until now they are still using 60 KHL, but it will see the development of technology and consumption patterns to update the data. However, he said the inflation component should be used based on formulas and methods of International Labor Organization (ILO).

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

Govt Unveils New Fiscal Policies
Jakarta Globe, 28 Aug 2013

Nearly a week after the national government outlined an economic package to sustain growth, new details are emerging.

Finance Minister M. Chatib Basri announced on Wednesday that the government has rolled out four new fiscal policies to curb the widening current account deficit on the back of lower exports and increasing imports.

The policies involve relaxing restrictions on bonded zones, adjusting the luxury goods sales tax, removing value-added tax on imported books and discounting tax payments for labor-intensive industries.

Under the changes, companies operating in bonded zones will now be able to access the zone’s tax breaks so long as they export at least 50 percent of their output, down from the 75 percent threshold previously set by the government.

Read the full article here
Uncertainty in Wage Policy makes Labor Intensive Industry Investors Hesitate
Kompas, 29 Aug 2013

Deputy Control and Implementation of the Investment Coordinating Board (BKPM), M Azhar Lubis, assessing uncertainty in wage policy makes investors particularly manufacturing sector hesitate

Azhar said the labor-intensive sectors are relatively prone to flare up if faced with rising UMP. Therefore, he believes there needs to be a formula that not only accommodate the increase in interest of existing workers, but also employers and prospective new workforce.

He hoped that the government will soon decide wage rules. Because, admittedly Azhar, the manufacturing sector is still seen as excellent investments. "Sectors that are now seen as prospective until now, more than 50 percent are the manufacturing industry, including pharmaceuticals," he said.

Read the full article here (Article is in Bahasa Indonesia)
BD: textile, social accountability
The Nation, Aug 21, 2013

When assessing garment manufacturing in Bangladesh, one realises that the Bangladeshi garment workers are literally the lowest-paid garment workers in the world.

The problem though is by no means limited only to Bangladesh. While initially starting from a cheaper base than China, Asian industrial hubs in general such as Bangladesh, Vietnam, Cambodia, and Indonesia are now facing mounting labour unrest and intense upward pressure on wages, as prices for food and other essentials rise

In Cambodia, Phnom Penh recently raised the minimum wage by 21 percent - from $50 to $61 per month. Vietnam recorded 200 strikes in 2012 by workers hit by inflation of between 9 to 10 percent. In Indonesia also - minimum wages set by regional authorities have increased by nearly 30 percent in less than two years.

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, USA, Switzerland and Netherlands Government  through AusAID, USDOL, SECO and Kingdom of the Netherlands



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