SUDWIND Materials No. 7
Siegburg
Germany
November 1999

Ingeborg Wick

From "Cheap production in Indonesia for German fashion TNCs - steps towards alternatives"

By Sudwind (based on research by PMK (Urban Community Mission), Jakarta, between January and April 1999)

Harsh conditions for workers

The factory PT. Tainan Enterprises Indonesia (Tainan) is based in Nusantara, an export processing zone (EPZ) north of Jakarta. Out of the 168 factories in the EPZ, opened in 1986, 73 produce garments. The others produce electronics and footwear. Foreign investors come from South Korea, Taiwan, Hong Kong, Japan and Singapore.

The 73 garment factories produce for companies from all over the world: adidas-Salomon, Nike, C&A, Otto Versand etc. One of these factories is Tainan, supplier to adidas-Salomon, Nike and the GAP, exporter of all kinds of garments to the markets of Germany, the USA and Japan.

At Tainan, working conditions are inhuman. Indonesian labour legislation as well as the internationally binding standards of the International Labour Organisation (ILO) are regularly violated. Mostly, both national legislation and ILO standards represent minimum standards which, as with the legal minimum wage, do not offer sufficient protection for the workers.

At Tainan, neither the minimum wage nor the legally prescribed rate for overtime pay are being paid. Overtime is compulsory and exceeds the legally prescribed maximum number of hours. Union activities are being hampered. Sanctions for mistakes are excessive when compared to wages. Health and safety are being neglected. Female workers are being discriminated against.

The following details were obtained in the course of interviews with workers of Tainan:

Wages

Tainan workers in February 1999 were paid Rp 6750 (1.50DM) per day, below the legal minimum wage of Rp. 7.000 (1.60 DM) per day. The minimum wage does not in any case cover workers' basic needs. According to studies carried out by UN organisations as well as the Urban Community Mission in Jakarta, workers in Greater Jakarta would have needed more or less double the minimum wage in order to cover their basic needs in early 1999.

PHILO, a woman worker at Tainan whose name has been changed, said that although she receives a pay slip she never knows how much she will receive each month. According to the (oral) explanations of her superior, if she reaches her target, for instance of 350 pieces of clothing, she will get a bonus above her basic daily wage. If she does not reach her target, she will receive only her basic wage. In practice, however, she is likely to receive no more than the basic daily wage whether she reaches her target or not.

Overtime pay

The legally prescribed overtime pay is 150% for the first hour and 200% from the second hour onwards. Based on an already insufficient minimum wage, overtime pay should therefore be Rp. 1.500 (0.35 DM) for the first hour and Rp. 2.000 (0.46 DM) from the second hour onwards.Tainan however pays a flat Rp. 1.335 (0.30 DM) per hour for overtime.

No voluntary overtime

At Tainan, overtime is obligatory, which is a violation of Indonesian law. Intimidation of those who oppose or refuse overtime is common.

Working hours

The weekly working hours at Tainan exceed the legally prescribed maximum. During the period of our research, working hours were between 79 and 85 instead of the legal maximum of 54 hours (40 plus 14 overtime).

Obstruction of union activities

Although SPSI, authorized by the state, and the now officially registered SPTP, operate at Tainan, union activities are seriously interfered with by management. A worker at Tainan stated that the efforts of SPSI towards a collective bargaining agreement have always been thwarted - simply by threatening the workforce with dismissal. Union members are routinely shifted from one department to the other.

NINI (whose name has been changed) stated that two collegues were recently sent home with threats of dismissal for distributing leaflets. The leaflets informed workers of the court having found in favour of their SPSI representative, who had been dismissed for opposing compulsory overtime. Accordingly, the SPSI representative should have been reinstated, but Tainan refused.

Massive Sanctions

At Tainan, the fines imposed for mistakes are out of proportion to what workers earn: workers for instance must pay Rp. 5.000 for failing to tidy up the work-tops (remember the minimum wage is Rp. 7.000 per day!), Rp. 5.000 for a sewing mistake, Rp. 5.000 for being an hour late and Rp. 25.000 for losing a tool.

Insufficient safety and health measures

At Tainan there are no air conditioning nor fans. The atmosphere is stuffy. A poly-clinic in the EPZ provides medicine for headache and stomach trouble only. There is no doctor nor medical staff.

Sex discrimination

At Tainan, women workers are required to roll up their skirts or trousers above their knees before they go home, even if they wear a "jilbab" (Muslim women's outfit).