Indonesian workers battle high prices, low wages despite producing oil, registering growth rates

The spate of increases is driving Indonesian workers to take to the streets, conduct strikes and file demands for wage increases.


MANILA – Emelia Yanti Siahaan, 38, Indonesian labor leader, visited the Philippines for a few days last week to attend an international workers’ conference on ‘freedom of association.’ Like the Philippines, but much larger, Indonesia is a resource-rich Southeast Asian country reporting positive economic growth rates yet being challenged by peoples’ protests.

As in the Philippines, more Indonesian people today are grappling with rising prices, led by spikes in prices of oil products despite the country being an oil producer, Yanti said. Since 2004 when SBY (Mr Susilo Bambang Yudhoyono) became president of Indonesia, he has had a total of seven opportunities to increase oil prices.

For oil prices to be increased in Indonesia, their president has to apply for it first, and the parliament has to approve it. As president for about nine years now, SBY has reportedly applied seven times, all of which were approved, Yanti said. This resulted in increases in prices of most products and services in Indonesia. But the wages are trailing behind, she said, even if wages are being increased at every start of the year in this country. Last January, the workers received an 11.8 percent wage increase.

Emelia Yanti in a solidarity walk with other  unionists supporting Filipino demand for wage hike
Emelia Yanti in a solidarity walk with other unionists supporting Filipino demand for wage hike

The latest oil price increase was a big 45 percent, Yanti said. It is now “jacking up transportation, house rent, food, even chili pepper.” The latter used to be 50,000 rupiah per kilo, it now goes for 100,000 rupiah (US$ 9.74), she said.

Because of the increase in oil prices, house rent, which this month costs 300,000 rupiah, would increase to 450,000 rupiah (US$ 43.83). Everything has increased 45 percent or more, said Yanti, but wages have lagged behind. Today’s minimum wage in Java, Indonesia is 2.2-million rupiah or $220 per month.

The spate of increases is driving Indonesian workers to take to the streets, conduct strikes and file demands for wage increases. These, amid the government’s manpower ministry ordering their police to get tough on protests and strikes while the employers’ association have called for increased monitoring of labor unions.

Union and dreams of better life

Yanti began working at 15 in her country’s garments sector. In 1995, at age 20, she started to get involved in unionism, but not in the unionism being pushed by the then Suharto government.

“After five years of working in the factory, I learned from experience that there is no fair relation. We work longer hours every day, but we earn only small money,” she told on the sidelines of their conference on freedom of association.

Like many elder siblings among Filipinos, Yanti’s decision to stop schooling was prompted by her desire to help support her family. “My father lost his job. My mother was selling vegetables in the market – what they were earning were not enough to send six of us to school.”

At first, she had thought that if she were to work for just two years, she can continue attending school later. And that by then, her father would have found another job.

But even after a brother finished his schooling, he found it hard to get a job, Yanti said. Her father’s new job as a driver, meanwhile, was not earning enough to support the family. “My only my dream was to help them,” Yanti said.

Walking from a day’s work when she was 20, some five years of experience in the garments factory later, she just felt so sad, she said. “I realized, even if I move from another factory, it will not change a thing – I will still earn little.”

The realization prompted her to help organize unions since then. She spent after-work hours meeting with workers. Her parents thought she was doing overtime. But she was actually in the thick of union organizing.

Indonesian unions’ struggle for recognition

The first workers’ associations Yanti helped to build 18 years ago were not identified as unions at the time. In 1995, a Suharto order had stated that the government and the employers would recognize only one union.

Suharto was an Indonesian strongman who rose to power about two years after Ferdinand Marcos did in the Philippines. Suharto held office for 31 years, from 1967 to 1998. Like Marcos, he rose to power propelled by an anti-communist propaganda. Suharto caused the killing of approximately three million Indonesians perceived as communists or close to communists from 1965 to 1967. Until now, Indonesian unionists said this is sensitive matter in their country. In the Philippines, Marcos’ martial law had also targeted communists, but he had failed to have most of them killed and arrested after the communists went underground and took up arms.

Marcos had also attempted in the Philippines a similar one-union one industry approach, with the establishment of the government-backed Trade Union Congress of the Philippines in 1975. But it was immediately challenged and by 1980s, more unions critical not only of TUCP but also of government policies had surfaced.

In Indonesia, the alternative workers’ organizations, which Yanti and like-minded unionists managed to form outside of the government-recognized union center, were for years considered as “informal organizations.” Yanti and her fellow union leaders were organizing underground, discussing workers’ issues such as termination. They agreed the government’s single-union policy didn’t work.

As they organized, Yanti said groups of workers were learning, discussing, sharing about their job, workplace, cases of intimidation, and how to forge solidarity among each other. In 1997 they succeeded in forming what they call as their “formal organization,” despite Suharto.

But technically, as far as their government is concerned, their organization was still informal, Yanti said. Still, many factories were joining them from Jakarta and cities nearby. As many as 300 workers would come and join their meetings.

The police also came to their meetings, “even if we make excuses, even if we said it was just a meeting of villagers, etc.,” Yanti said. The police arrested the labor organizers including Yanti, but released them hours later. When she came back to work the next day, her employer had heard of the assembly and the organizers, including Yanti, were forced to resign.

“Management called us ‘bad influence, dangerous workers,’” Yanti recalled. But they did not stop organizing unions.

“I continued organizing factories, even though some workers in other factories rejected me because I had been called a ‘dangerous worker.’”

On May 1998, Suharto fell. He was replaced by Mr. Habibi who issued a new labor regulation and ratified ILO convention 87 recognizing the workers’ rights to organize unions. “Every group in factories organized by us became formally recognized then,” said Yanti.

“That labor law gave us the opportunity to negotiate for better conditions at work,” she said. She added that mostly, unions rally if the issues were related to labor interests, “but we also concern ourselves with land grabbing, foreign monopolies of our oil, and the like.”

She admitted that not all Indonesian unions today understand that if land grabbing worsens, unemployment also worsens, and they will be forced to accept lower wages. “You can’t have bargaining power if the number of unemployed grows bigger than the number of employed,” she said.

But Indonesian unions, especially those affiliated with Yanti’s federation, also have issues with their labor law. Based on her account, while the law recognizes their rights to organize since 1998, it also “regulates” it in such a way that in the end, the unions seem easy to form but also “easy to bust.”

From 1998 to 2000 Indonesians saw an increased number of workers forming unions. Beginning 2000, some unions began to split. Later, the government changed the labor law. From previously requiring the membership of 50 percent plus one of workers in the factory before they can form a union to negotiate for a CBA, they changed it to requiring just 10 percent plus one. Then the employers formed their unions and actively battled as well as vilified those it would not support.

“In the last five years many companies organized their puppet unions and asked all workers to become members of their puppet unions,” Yanti said. So far, she said, there are still more yellow unions than unions like hers in Indonesia.

Rich country, struggling people

Indonesia today has approximately 240 million people, about 110 million of them are workers including the informal workers who are estimated to be 64 percent of all workers.

Of the 35 million workers in the formal sector and state-owned enterprises, only 3.4 million are unionized. Two-thirds of which, Yanti said, are under yellow unions, and only 35 percent are under independent unions like the one she belonged to, the GSBI (Gabungan Serikat Buruh Indonesia or Federation of Independent Trade Unions in Indonesia). Yanti is secretary general of GSBI.

Despite that, amid growing restiveness among Indonesians as they are told about economic growth but are forced to live amid rising prices and shrinking wages, among others, the Indonesian government has been issuing more repressive laws.

The Indonesian government, early this month, enacted a law on community organizations that Yanti’s labor group views as a threat. The law, she said, requires old organizations to report their organizations from local to national level, “to bring all documents, names of leaders, financials, to show/report member contribution, overseas – if you do not do this, you’re illegal,” Yanti said.
She said the new law is not just for repressing unions, but the entire social movement in Indonesia. This community organization law also does not recognize an alliance, as it is not registered with the government. “They set up this law to control criticisms, protests of people in Indonesia,” Yanti said.

And this is not yet the end of it. This coming August, the Indonesian government is reportedly set to implement the National Security Law, which, Yanti said, is dangerous for the people’s movement and democratic processes in Indonesia. She explained that it “calls on the military to come back, that military have rights to identify the movement, organizations, illegal ideology, to intervene in demonstration, protests, to allow arrests, detention, and shooting at protesters.”

“We are moving for the rejection of this law, for judicial review, to let other regions know about this, how this law endangers democratic process in Indonesia,” Yanti said.

Indonesia’s recent case of “union-busting” reportedly happened in the Samsung factory in Indonesia. Here, foreign locators or companies “use locals against workers to suppress them.”

“We’re supporting the struggle of Samsung Workers,” Yanti said. She recalled how the pictures of worker leaders’ were posted everywhere, with the word “wanted” on it and some warnings that they are to be killed.

Just wearing shirts proclaiming workers are members of GSBI is deemed as bad by the government’s troops, as workers wearing such t-shirts were arrested, Yanti said.

This Samsung experience of using gangsters to attack unions is also happening in other parts of Indonesia, said Yanti. Last November, she said, their government also enacted new legislation that prohibits workers from organizing in industrial areas. It reportedly angered the union movement in Indonesia.

The government policies most criticized in Indonesia include contracts entered into with foreign companies investing in Indonesia, in oil, gold, coal mining, palm plantations, Yanti told They noted the pattern of the government signing agreements with foreign companies and foreign governments and then setting up new policies.

Indonesia’s oil resources, for example, are 60 percent controlled by foreign oil companies such as BP, Caltex, Exxon Mobile, Chevron, Shell and Total. The remaining 40 percent are controlled by state oil companies, but, based on Yanti’s account, their state companies are “functioning as comprador,” or partners of foreign oil companies with international offices in the US, etc. So it hardly counted as for Indonesians.

Since 2006, Indonesian President SBY has reportedly been supporting the aggressive expansion of palm oil plantations. Indonesia is second only to Malaysia in the production of palm oil. Yanti said the expansion has resulted in increased land grabbing even of the land of their indigenous peoples. “This is not good for the people,” she sighed.

(According to the 2013 World Trade Organization (WTO) Report entitled “Factors Shaping the Future of World Trade, among Southeast Asian countries, only Indonesia and the Philippines were included in the top 10 countries with the biggest farmland area acquired by foreigners.

The biggest was Democratic Republic of the Congo with 8.1 million hectares acquired by foreigners, followed by Indonesia with 7.1 million hectares, Philippines with around 5.2 million hectares.)

“When poor peasants have no land, how can they give life to their children? How can the youth study and work?” Yanti asked. Since 2007 the increasing number of Indonesian youth leaving their villages had only added to their increasing number of unemployed.

Unemployment in Indonesia today is pegged at 17.9 percent according to the government. But, Yanti said, they believe it is even higher. “Because we can see in every city many youth who don’t have jobs. Some are forced to join gangs.”

In a country where communists who were not killed in the 1960s are still in jail or, if released, are still being watched by the military, the anti-left scare is once again being used by the government. This time it is targeting young progressive workers such as those in Yanti’s labor center, the GSBI. But, she said, people are still resisting.

Yanti said that as with the Filipino people, “we have the same movement.” Aside from their progressive labor bloc, they also have similar peasant issues and struggles. She related that especially since SBY became president, and land grabbing is worsening due to the aggressive expansion of palm oil production for export, more peasants are opposing land grabbing. They have held international fact-finding missions on land grabbing in Indonesia. “They try to fight to keep their lands, even small lands,” said Yanti, explaining that these families view their survival as tied to their land. (

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