State and Labour in New Order Indonesia 5313809598

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State and Labour in New Order Indonesia Edited by Rob Lambert

ASIA PAPER 6

UNIVERSITY OF WESTERN AUSTRALIA PRESS in association with

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ASIA RESEARCH CENTRE A Special Research Centre ON SOCIAL, POLITICAL AND ECONOMIC CHANGE IN ASIA MURDOCH UNIVERSITY, WESTERN AUSTRALIA Established and supported under the Australian Research CouncilS Research Centres Program

For Seminar Siahaan

First published in 1997 by

University of Western Australia Press Necllands, Western Australia, 69U? in association with Asia Research Centre A Special Research Centre on Social, Political and Economic Change in Asia Murdoch University, Western Australia, 61 S() This book is copyright. Apart from any fair dealing for the purposes of

private study, research, criticism, or review, as permitted under the Copyright Act 1968, no part may be reproduced by any process without written permission. Enquiries should be made to the publisher. Copyright © Rob Lambert and Asia. Research Centre on Social, Political and Economic Change 1997

National Library of Australia Cataloguing-in-Publ cation entry State and l a b o r in new order Indonesia Includes index.

ISBN l 875560 71 8. L Trade-unions

5. Indonesia

Indonesia. 2. Labor movement Indonesia. Economic conditions 1945- . I, Lambert, Rob.

II, Murdoch University. Asia Research Centre on Social, Political

and Economic Change. (Series: Asia paper, 6). 5313809598

Edited by Helen Bradbury Designed by Derrick I Stone Design, Lilydale, Victoria Typeset

in

11.5/"12pr Garamond 3

Prrntcd by Optima Press, Perth, Western Auslraha

Contents

Acknowledgements

7

Introduction - Indonesian Workers in an Integrating World: the End of I Iisrory? R06 Lambert

9

Chapter 1: State and Labour in the Early New Order

25

Veda R. H a f i z Chapter 2: Authoritarian State Unionism in New Order Indonesia

Roi: Lumber! Chapter 3: International Labour Standards and Labour Reform Politics in New Order Indonesia

Row Lambert Chapter 4: The Unjzzé Ram Movement

56

83 105

Ed! Can/oyono

Chapter 5: Covering Strikes: Indonesian Workers and. 'Their' N[edia

12 5

Hilmar Fared Setiadi 147

References Glossary Index

153

About the authors

159

155

Acknowledgements

This collection owes much to Murdoch University's Asia Research Centre. Over the past six years the Centre has stimulated original

research into the character of the new social forces that have emerged out of Asia's rapid industrialisation. Whilst the initial focus was on

the new middle class, the Centre never lost sight of the political significance of the growth of the working class in Asian societies. Chapters 2 and 3 developed out of field. work funded by the Centre. Without the vision of the Western Australian unions, deep contacts with the independent unions in Indonesia would not have been possible. Indeed, the chapters by Cahyono and Farid arose out of a regional conference organised by the Western Australian union movement. In particular, I would like to thank Richard Robison for the part

he has played in creating and sustaining a stimulating intellectual environment at a time when such an environment is under threat, not only because of cuts to valuable programs, but more importantly, because of a narrowing of the terms of discourse and a devaluing of critical social scientific endeavour. Helen Bradbury, the Centre's editor, has played a significant role in promoting this collection, editing the text and above all, chasing me. lt has always been a pleasure to discuss the issues surrounding the Indonesian l a b o r move-

ment with Vedi Hadiz who informs his analysis with values long lost. Keith Peckham, Tony Cooke, Gordon Thompson, Reva Gandhini, Rod Fraser and Bill Ethell. have all sustained this work in various ways.

Finally, there are our friends in Indonesia who provided critical comment on these chapters. In the difficult years ahead, I hope that the book will contribute positively to future transitions.

7

State and Labour in New Order Indonesia

Berton Brecht once reflected that the insult that was a8'Tle§ to work-

ing people's injured lives was that their struggles have green largely ignoreclin H36 pages history. To the current era, research n a n a writing on working class

issues

is even more unfashionable.

Hopefully, this collection will reveal a little of the texture of workers' lives and the challenges they face in the workplace anal in m o ern Indonesia.

-

Rob Lambert Perth, August

1996.

8

INTRODUCTION

Indonesian Workers in an Integrating World: the End of History?

In a 1989 lecture to the Rand Corporation, Francis Fukuyama posed the question: does not the 'unabashed victory' of economic and political liberalism signal that the end. of history has now been reached He argued that the unifying spirit of the age is best reflected in the rational, calculating individual, striving to fulfil his of het consumer needs within a transformed global trading system that is inexorably developing the capacity to meet these individual aspirations. This dominant world. view has, in his opinion, displaced political struggle that 'called forth daring, courage, imagination, and idealisms The 'willingness to risk one's life' in struggle has all but dissolved

before the powerful cultural force of individualism. The inevitability of this cultural and political transformation, this rationalist tri-

umph of economics, cannot but be recognised. There is an image oflndonesian labour that serves to reinforce this

end of history argument. The image is drawn as follows: the essential characteristics ofjavanese culture have meant that Indonesian workers have ingrained moral qualities rooted in work ethic, family, a craving for order and stability, an indigenous respect for authority, and a reluctance to question its dictates (Vatikiotis 1995, p.l 14), these cultural characteristics have marked the employment relation-

ship with distinctively 'Asian values cy

of family

The closeness and the intima-

relationships typify the employment relationship in

Indonesia's new factories and culturalist arguments about Asia in general are applicable to Indonesia. The codes of cultural loyalties

translate into their modern industrial equivalents: 'benevolence of parents translates into a benevolent management style, senior-junior

relationships translate into an acceptance of hierarchy, and trustworthiness amongst friends becomes cooperation between co-workers' (Wilkinson 1994, p.l92). 9

State and Labour in New Order Indonesia

The intense, obedient Indonesian worker is rewarded for his or her contribution through growth in employment and wages that have lessened poverty and created new horizons of opportunity (Manning 1995, pp. 63-73, World Bank 1990). The Indonesian state's pursuit of economic policies consistent with the opportunities of the new open global trading system has rendered these individual opportunities possible. For the new industrial worker these condi

sons mean that politics is subordinate to economic opportunity as individuals work hard, earn, spend, consume. Fukuyama is right: under the New Order history has indeed ended. If we accept this proposition, what then are we to make of the image that is being forced to the fore by any one of the multitude of industrial strikes, small or large, that have erupted across all major

industrial centres in Indonesia in the l990s? Consider for example, the 1991 strike by over 2 000 clothing workers at Indonesia's largest garment factory, PT Great River Industries, located in Bog or, West Java. The cardboard placards of the strikers listing wide ranging demands, present an alternative image to the culruralist construct; 'Our country is free now. Why am I treated like in the Rod? era" 'I am pregnant but I am forced to do overtime.' 'SPSI is infertile' 'My wage is only equal to a bowl of £w»é50.' 'We work 15 hours a day_' 'I have to use a toilet card when I need to go to the toilet.` 'We get pregnant and we get fired.' How does this strike action and the articulation of the grievances listed in the placards, so typical of many of the strikes, begin to challenge the culture of obedience and diligent individualism highlighted tell us about the emerging

by FukL1yama9 What dO these demands

consciousness of Indonesian urban working class, their experience of Factory work and. the 'opportunity' afforded by the new jobs in the city? To what extent does this consciousness challenge the assump-

tions underlying the liberal growth model? This book hopes to make a modest contribution to the debate around these questions.

The chapters that follow underscore the need for a deeper analysis of the changing consciousness of the Indonesian working class. Giving due weight to agency and consciousness in the analysis of social change and recognising that the Indonesian working class, to use E P Thompson's phrase, 'was present at its own making' (Thompson 1968), facil itates a broader understanding of potential trajectories of

New Order politics. A proper comprehension of the new phase of industrial conflict 10

Indonesian History in an Integrating World: the End of History?

that now characterises Indonesia's industrialisation requires an analysis of l a b o r regulation, trade Unionism and the experience of

working life. Such analysis has implications for a theoretical debate on the nature and consequences of the Asian economic growth 'miracle' and its role in global restructuring. This book argues that the denial of international l a b o r standards in a country such as Indonesia is pertinent not only for the shaping of l a b o r struggles within Indonesia, but is also relevant to the debate over the general characteristics of the process of globalisation and its potential impact on the developed economies of Europe, North America and Australia. This is uncovered in the following way:

Themes, issues and paradigms Part One of the book highlights the structural dimensions of both the construction of the obedient, respectful Indonesian worker and the contradictory developments emerging out of that constriction.

We essentially sec a high degree of state intervention in the l a b o r market to regulate the capital/labour relationship with the intent of containing the boundaries of oppositional

politics, meeting t h e

needs of local business interests and maintaining Indonesia's cornparative advantage in the global trading system . The three chapters that form Part One of the book all richly tex-

ture the complexities, the politics and contradictions inherent in this regulatory l a b o r market role of the Indonesian state. In chapter one, Vedi Hadiz draws on original archival records and interviews with influential state and l a b o r leaders to cast new light on the early interventions of the Indonesian state that reconstituted both the industrial relations system and the trade union movement in the

decade following the 1965 coup. Hadiz describes the processes whereby labour unions were reconstituted at an organisational, political and ideological level. Organisationally, the dominant role played by state officials in the establishment of the Fedemri Burzzb Selurzzb Indonesia (FBSI) i n 1973 as the only legitimate representative organisation of the Indonesian working class signaled the Further demise of independent unionism. Politically, the weakening of political parties at this time meant that the new corporatist structure was closely intertwined with the rul-

ing GOLKAR party and that the working class would be de~politicised. Ideologically, FBSI marked a shift from a conflict model of industrial relations to a developmentalist model, The new federation was to play a constructive and responsible role in development, H

State and Labour in New Order Indonesia

striving to ensure l a b o r peace and stability an d the new harmonious partnership between employers and employees expressed in Panmiila industrial relations. Hadiz argues that this shift was driven by both economic and political imperatives, although he contends that the state's determination to consolidate its power Following the

coup was a primary consideration. An intriguing dimension of Hadiz's analysis is the role played by international l a b o r organisa-

tions in this transition. Although the International Confederation of

or

Free Trade Unions (ICFTU), the .American Federation Labor and the Centre of Industrial Organisations (AFL/CIO), and the German Friedrich Ebert Foundation (PES) all expressed a commitment to

free and independent trade unionism they were all nevertheless accomplices i n the restructuring of the Indonesian l a b o r movement in varying degrees.

In chapter two, Lambert details the further extension of state con-

trols over l a b o r with the displacement of FBSI by the even more centralised Seriéal Peéerjaa Selzfru/5 lfzdoneria (SPSI) in 1985. Greater centralisation through the transformation of FBSI's industrial unions into SPSI 'departmentS as also marked by a more prominent role for the military within the new structure. Drawing on interviews wi th the Minister of Manpower, SPSI leaders and ordinary workers, Lambert analyses the way in which SPSI functions at a workplace level as an agency of the state rather than as a representative organisation of the working class. The responses of ordinary workers to this structure are detailed. Evidence of the rejection ofSPSI at workplace level points to difficulties the state faces in attempting to legitimate the structures i t has established. Lambert argues that SPSI is a state apparatus, displaying the features of the state and is therefore not a

trade union in the conventional sense. Given the nature of SPSI the reforms made in response to international pressure have done little to alter the organisation's essential state characteristics.

In Chapter Three Lambert examines the pressures for industrial relations reform emanating from the United States and argues that the threat to remove trade privileges did have a significant effect on the internal dynamic of l a b o r relations in Indonesia. Pubiic assertions by the Indonesian state of the existence of trade union rights in an attempt to ward off this threat only served to heighten awareness amongst ordinary workers of the absence of these rights. Upward wage adjustments as another initiative to win public sympathy in the US initially fuelled rather than dampened worker militancy as

workers engaged in strikes to force recalcitrant employers to pay the new minimum wages. Lambert shows how the fledgling indepen12

Indonesian History in an Integrating World: the End of History?

dent unions sought to highlight these contradictions and press home the advantage. just as trade pressure opened up new political space

for independent unionism in Indonesia so too did the Clinton AdministrationS retreat on the trade access/worker rights linkage in May 1994 dramatically cut that opportunity. State repression of independent l a b o r activists has increased with this policy shift. Lambert argues that in the absence of external pressure, prospects For the further maturing of independent l a b o r unions are diminished , given the current political configuration.

The chapters in Part Two focus on the growing contradictions within this highly regulated system. The image of the obedient, respectful, diligent worker appears to be dissolving before images of

a restless and at times angry, assertive working class. The growth of this new consciousness amongst sections of Indonesia's industrial proletariat is a product of the gradual, uneven and still fragile emergence of independent unionism in almost all of the major urban centres ofjava and Sumatra. Cahyono and. Farid provide some insight into this independent l a b o r movement and the experience of workers in the new factories

through drawing on the perspectives of insiders. Both have long been involved. in these developments In Chapter Pour, Cahyono analyses the 'zznjuk ram' (show of feelings) movement as a way of explaining the significant rise in direct strike action by workers. Cahyono contends that there are three core grievances underlying the growing militancy of urban factory workers: low wages that do not meet basic physical needs, long working hours and the imposi-

tion of SPSI units on the workforce. This assertion obviously requires further research and analysis. In this regard i t would be important to engage in a rigorous survey of strike demands across all the major industrial areas. This would provide a useful objective indicator of the changing character of sections of the urban working class which could serve as a gauge of the gradual and uneven genesis of a new social consciousness, workplace culture and sense of personal identity. Cahyono's chapter points future research in this direction. His contribution is useful as the arguments arise out of his own personal experience of strikes and his intimate knowledge of certain

workers who are actively seeking changed conditions. Cahyono's description of the state's limited and often repressive

response to the strike wave highlights the dilemmas Lambert alluded to i n chapter three, the key issue being the state's capacity to address the underlying grievances. Minimum wages have been hiked upwards in response both to the external trade pressures from the US 13

State and Labour in New Order Indonesia

and to the threat of social instability posed by the strikes themselves, particularly since certain strikes such as the 1995 PT Great River Industries strike of some 12 000 demonstrating workers marched

on the local Ministry of Manpower offices. However, despite the growing militancy, working hours have remained unaltered as has the role of the SPSI factory units. Such a contradictory state response requires further analysis since l a b o r history i n other national contexts demonstrates that the combination of belated concessions to pressure and maintenance of structures that have little legitimacy can in fact foster a deepening of grievances and a determination to further resist. That is why Huntington has counseled the introduc-

tion of reforms well in advance of popular pressures. Cahyono also asserts that these factory struggles have provided the new independent unions with an opportunity to play a role in consolidating a class consciousness. As can be seen from his analysis,

_

the leadership of these embryonic unions has a sense of Indonesian working class history in which the colonial awakenings of the l920s loom large. Cahyono argues that even though the New Order state has been determined to repress and marginalise the politically conscious leadership and organisations of the working class, such consciousness is showing signs of re-emerging in the l 990s. Drawing on the dynamics of certain strikes, he seeks to demonstrate this. The repressive response of the state has sharpened workers' consciousness . * L: I their 'real enemies' are: employers, Kodiak, Polres and the Ministry of Manpower, since all these forces unite whenever workers try to advance their own class interests through collective action, One might question whether or not Cahyono is in fact too opti-

or

mistic, presenting a seemingly inevitable growth new consciousness and. identity of interests. Doubtlessly, the higher level of strike action and ethnographic evidence that is currently being collected both point to emergence of a new consciousness, identity and culture. However, this change is likely to he more complex, contradictory and uneven than Cahyono allows for in his analysis. In particular, more research needs to be done on permanence or otherwise

of ruralrurban identity change, particularly in young women workers. Notwithstanding its limitations, Cahyonds approach should be accepted for what it is: the work of a person caught up in the very events he seeks to interpret. Leadership is of necessity optimistic. However, this flattening of the contradictions need not detract from

the important questions his writing raises, nor should his commit-

ment distract from the unique insights that such engaged writing _14__

Indonesian History in an Integrating World: the End of History?

highlights. Indeed, these very values that emphasis questions of social justice, equity, work meaning and the realisation of working class interests are a cause for analysis. They reflect yet another facet of Indonesia's complex and apparently resilient political culture at a moment in world history when such values and interests appear to be wilting before the power of a neoliberal ideology and vision of

society and economy that is global in scope and sustained by powerful international and national media, business and political interests. This one-sided David and Goliath~Iike struggle over ideas and values is what makes the next chapter by Farid so interesting. Farid focuses on the role played by the official media in Indonesia "s=

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