This briefing note address Promoting the declaration on fundamental principles and rights at work. Other themes in series include the following:

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2 In Preparation for the ILO s submission to the Poverty Alleviation Committee in Indonesia, a series of 12 (twelve) Technical Briefing Notes (TBNs) have been prepared which serve two purposes; first, as background documents, on issues and policy choices critical to poverty reduction and secondly, as building blocks towards a comprehensive report: Working Out of Poverty: an ILO submission for the Indonesia PRSP. This briefing note address Promoting the declaration on fundamental principles and rights at work. Other themes in series include the following: Employment dimensions of macro and sectoral policies; Decentralization and decent work: making the connection to the MDGs; Job creation and enterprise development (SMEs and local economic development); Youth employment: pathways from school to work; Rural development: access, employment and income opportunities; Skills development for economic growth and sustainable livelihoods; Eliminating the worst forms of child labour; Social protection for all; Promoting good governance in the labour market by strengthening tripartism and social dialogue; Migration: opportunities and challenges for poverty reduction; Gender and poverty.

3 Labour Organisation 2004 First published 2004 Publications of the International Labour Office enjoy copyright under Protocol 2 of the Universal Copyright Convention. Nevertheless, short excerpts from them may be reproduced without authorization, on condition that the source is indicated. For rights of reproduction or translation, application should be made to the Publications Bureau (Rights and Permissions), International Labour Office, CH-1211 Geneva 22, Switzerland. The International Labour Office welcomes such applications. Libraries, institutions and other users registered in the United Kingdom with the Copyright Licensing Agency, 90 Tottenham Court Road, London W1T 4LP [Fax: (+44) (0) ; cla@cla.co.uk], in the United States with the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA [Fax: (+1) (978) ; info@copyright.com] or in other countries with associated Reproduction Rights Organizations, may make photocopies in accordance with the licences issued to them for this purpose. ILO A Series of Policy Recommendations Decent Work and Poverty Reduction in Indonesia, 2004 ISBN The designations employed in ILO publications, which are in conformity with United Nations practice, and the presentation of material therein do not imply the expression of any opinion whatsoever on the part of the International Labour Office concerning the legal status of any country, area or territory or of its authorities, or concerning the delimitation of its frontiers. The responsibility for opinions expressed in signed articles, studies and other contributions rests solely with their authors, and publication does not constitute an endorsement by the International Labour Office of the opinions expressed in them. Reference to names of firms and commercial products and processes does not imply their endorsement by the International Labour Office, and any failure to mention a particular firm, commercial product or process is not a sign of disapproval. ILO publications can be obtained through major booksellers or ILO local offices in many countries, or direct from ILO Publications, International Labour Office, CH-1211 Geneva 22, Switzerland or from the ILO Office in Jakarta, Menara Thamrin, Level 22, Jl. MH Thamrin Kav. 3, Jakarta Catalogues or lists of new publications are available free of charge from the above address, or by pubvente@ilo.org ; jakarta@ilo.org. Visit our website: ; Printed in Jakarta, Indonesia

4 PROMOTING THE DECLARATION ON FUNDAMENTAL PRINCIPLES AND RIGHTS AT WORK It has commonly been understood that poverty is a multidimensional phenomenon. It relates to the lack of assets and regular income flows, vulnerability, powerlessness and social exclusion. One dimension of poverty is deprivation of human capability. No one doubts that poverty connotes capability deprivation. Capacity development is therefore very crucial to reduce poverty. Another important and related dimension is the absence of fundamental human rights, including at the workplace. Introduction 1 In 1998 the International Labour Conference adopted the ILO Declaration on Fundamental Principles and Rights at Work. It was declared that all Members, even if they have not ratified the ILO Fundamental Conventions, have an obligation to respect, promote and realize the fundamental principles and rights at work. These rights are: (a) freedom of association and the effective recognition of the right to collective bargaining; (b) the elimination of all forms of forced or compulsory labour; (c) the effective abolition of child labour; and (d) the elimination of discrimination in respect of employment and occupation. These rights which are enshrined as the ILO Core Conventions (see box 1), are considered fundamental to achieve sustainable economic growth and development.

5 Promoting the declaration on fundamental principles and rights at work Box 1. ILO Core Conventions The ILO Convention 87 Freedom of association and highlighted the protection of the right to organize, 1948 fact that growth should be Convention 98 Right to organize and collective accompanied by bargaining, 1949 a minimum set of Convention 29 Forced labour, 1930 rules for a society to Convention 105 Abolition of forced labour, 1957 function, based Convention 100 Equal renumeration, 1951 on common Convention 111 Discrimination (employment and values and by occupation), 1958 virtue of which relevant parties Convention 138 Minimum age, 1973 have the Convention 182 Worst forms of child labour, 1999 possibility to claim their fair share of the wealth that they contributed to creating. One of the effective means for this is the realization of the fundamental and principles rights at work. Better workers rights result in workplace efficiency, stability and ultimately faster economic and balanced growth. Improved rights at the workplace guarantees better distribution of income, alongside improvement in efficiency and productivity. The Declaration has a significant and crucial role in overcoming poverty. It is a means for empowerment, creating opportunity, security and improving dignity. It contributes to a social peace, reduction of risks, stability which attracts investment that in turn boosts economic growth and generates employment. 2 This briefing note will elaborate the links between fundamental principles and rights at work and the need for its realization in order to contribute to poverty reduction. The main focus of this briefing note will be on freedom of association and the rights to collective bargaining which are also seen as vitally important in order to secure the other three fundamental rights. 1 Declaration on fundamental principles rights at work in Indonesia Decent work is a condition in which opportunities exist for women and men to obtain decent and productive work, in conditions of freedom, equity, security and human dignity (ILO, 1999). It implies access to employment with the 1 The issue of child labour is covered under a separate Technical Briefing Note

6 recognition of basic rights at work, a guarantee to the absence of discrimination at work, an income enabling one to satisfy basic economic, social and family needs and responsibilities, an adequate level of social protection for the workers and family members and the exercise of voice and participation at work, directly or indirectly through self-chosen representative organizations. The government of Indonesia has ratified all core ILO Conventions and has committed to complete a labour law reform programme. This was triggered by the 1998 reformasi movement that also brought reforms in political and economic policy. The transformation however from decades of authoritarian rule to a more democratic society was not easy. There is in general a political will to respect them but in a highly diverse and complex environment many violations and obstacle persists. Steady progress for the full realization and fulfillment of the fundamental rights, remains a great challenge for the coming years. Freedom of association means the right of workers and employers to join organization of their own choosing and to get involved in the collective bargaining process. Collective bargaining is potentially a powerful means to facilitate coordination between employers organization and unions in wage setting, working conditions and other industrial relations issues. Freedom of association guarantees better representation of the workers and results in better civil society participation in the governance and development process. Freedom of association and collective bargaining in Indonesia 3 The significant role of trade unions in Indonesia has been noted several decades ago, since the emergence of nationalists, anti-collonial struggle and movement. However, during the new order regime, freedom of association was repressed and tightly controlled by the ruling parties. The main characteristic of that period was the absence of freedom of association since the government recognized only a single union of SPSI 2 to represent all workers. Restrictions on the existence of free and independent trade unions were applied both in the private and public sectors. In the public sector the government policy obliged all teachers to join PGRI 3

7 Promoting the declaration on fundamental principles and rights at work and all public servant were forced to join KORPRI 4. At this period, the government promoted Pancasila Industrial Relation policy aimed at achieving partnership between workers and employers. In practice, however, this policy was used to restrict workers right and disguised dispute settlement. It was also a common phenomenon that military and police officers were involved in industrial relations dispute settlement. The immediate positive consequences of the ratification of ILO Convention No. 87 and the enactment of Trade Union Act No. 21 of 2000 can be seen from the fast growing number of free and independent trade unions, particularly at the national level. To date more than 70 national federations of trade union have been organized and registered. There is also a significant increase in the number of plant level trade unions with a total membership of about 10 million. The table below shows figure of trade union growth at national and plant levels from 1997 to Table 1 Trade Union at National Level (1997 June 2001) Year Total Federation % Of increase Total Plant Level TU % Of increase , , , , ,647 84,61 15, Source: Depnakertrans (2001) 4 2 SPSI or All Indonesian Workers Union has been restructured and became a confederation in the beginning of PGRI was a teachers association closely controlled by the ruling parties, but this condition has changed later on. Currently PGRI affiliates to Kongres Serikat Pekerja Indonesia (KSPI) the newest confederation established in February KORPRI is more of civil servant association than a genuine trade union. There are no other associations of public servant.

8 In addition to the Trade Union Act, the newly enacted Manpower Act No. 13 of 2003 also enshrines the recognition of freedom of associations and collective bargaining including the right to strike and to lock out. The main challenge is the realization of these rights through the effective implementation of the new legislation, which requires enhanced capacity of both state and non state actors in industrial relations to understand and carry out their respective rights, obligations and mandates under the law. Though there has been progress in dealing with forced labour issues in Indonesia, some still observe that many instances of forced labour continue to exist in various forms. The newly enacted Manpower Act clearly stipulates the abolition of forced labour and discrimination at the workplace. One of the typical forms of forced labour in Indonesia is connected with exploitation of children and women, who are being trafficked both domestically and internationally. This case takes place in the form of debt bondage experienced by prospective domestic migrant workers. Forced labour and discrimination 5 Similar to forced labour, despite progress achieved, many forms of discrimination at the workplace still exist. Discrimination happens in various forms particularly based on gender, especially in a situation where women constitute a large and growing portion of the labour market. Most women workers are concentrated at the lowest levels of production and in many cases often have limited access to training and promotion as well as leadership position. In addition, many practices indicate that compared to their counterpart, female are covered by different set of terms and conditions of employment and social security such as in pension scheme and family allowances. Two positive development have occurred. Indonesia has finally been able to ratify ILO Convention No. 81 (adopted in 1947) concerning Labour Inspection which can systematically contribute to the strengthening of the national labour inspectorate and labour administration. It contributes also to effectiveness in enforcing legal provision against forced labour and discrimination.

9 Promoting the declaration on fundamental principles and rights at work Secondly, the ILO and its declaration project via several tripartite trainings and workshops on gender equality through collective bargaining (including the development of training materials and a tripartite training of trainers course), has attracted a great deal of interest and acceptance from participants in seven major provinces. Capacity development for fulfillment of fundamental rights at work After decades of authoritarian rule and repression of workers rights, workers and employers in Indonesia found themselves with the government to be in almost at the same starting point with regard to the capacities required in a modern, competitive and democratic industrial environment. In the effort to reduce poverty, freedom of association and collective bargaining play a significant role in bringing about industrial relation peace at the enterprise and national levels for economic and social progress. It increases the tripartite constituents and civil society participation in the decision-making process and thereby ensures social justice and eliminates social exclusion of workers who are often the poorest and the most vulnerable groups in society. Effective freedom of association and collective bargaining promote social inclusion by allowing workers - who have marginal economic positions, to influence social economic policy at enterprise, district, provincial and national levels. 6 Since the realization of the fundamental principles and rights at work enhances economic development, capacity building for government, trade unions and employers organizations is essential. Similarly, social dialogue, bipartite and tripartite mechanisms also need to be strengthened. Capacity refers to organizational and technical abilities, relationships and values that enable organizations, groups and individuals to carry out their functions and achieve development objectives over time. Enhanced capability of the poor and excluded groups will enable them to effectively participate, negotiate and influence policy that affects their wellbeing. Capacity building on fundamental principles and rights at work is helping to create sound and

10 stable industrial relations that benefit all, including poor workers. In addition, effective labour law reform and enforcement will provide a favourable legal environment and basis for the realization of these rights. The role of government for poverty reduction and in the fulfillment of freedom of association is crucial. Government plays a key role in realising these rights. Capacity building is therefore needed to enable the Government of Indonesia to properly and effectively implement labour laws and policies, specially the recently enacted labour legislation under the reform programmes. This extends to local governments that have to assume enlarged responsibilities envisaged under the decentralization law. One of the most important roles of the government related to the realization of the fundamental rights at work is labour inspection and labour administration to enforce the legislation covering terms and conditions of work and to help employers and workers on how to comply with the law. Better capacity in labour inspection can contribute to reduce vulnerability of workers from being trapped as forced labour and discrimination, which in turn contribute to law enforcement. Labour inspection will ensure compliance with labour laws and regulation particularly by employers and provide technical information and advice to workers and employers on labour laws and regulations. Labour inspection can also collect and analyze data on the incident of violations of labour law on freedom of association, discrimination and forced labour. Building the capacity of government 7 Prior to the implementation of the Regional Autonomy Act 5, the authority of labour inspection rested within the Department of Manpower and Transmigration. As a consequence of district autonomy, the Department of Manpower and Transmigration does not have direct formal links anymore with all labour inspectors in the field. Under this new regulation, central government has 5 In 1999, the government passed the Act on Regional Autonomy (Act No. 22 of 1999), which decentralize some of central government office and function, including Some office which previously under the Department of Manpower and Transmigration.

11 Promoting the declaration on fundamental principles and rights at work authority to formulate strategy, technical guidance and evaluation of labour inspection. The province and district (or municipal) government has authority in the practice of labour inspection. There is no direct link between Department of Manpower and Transmigration to Manpower Office responsible for the operational function of labour inspection under the Manpower Office of District and Province government. 6 An effective dispute settlement system is also essential to promote sound and stable industrial relations. The capacity and effectiveness of the government in establishing a modern system under a proposed law is underway. It should be able to demonstrate that the new system consisting of conciliation, mediation and arbitration and labour judges will be able to dispense justice quickly, inexpensively and fairly when dealing with labour disputes. Another area that needs to be addressed in order to ensure law enforcement in relation to labour issues, is the capacity of the Indonesian National Police (INP). As mandated by legislation reform, the INP which was transferred from a military to a civilian agency, has a strategic task in the protection of human rights. This capacity need to be enhanced in supporting law enforcement in the areas of freedom of association and collective bargaining, freedom from forced labour and discrimination. 8 Building capacity of trade unions Indonesian trade unions have been experiencing a rapid multiplication of their membership, although in 2002 union density in Indonesia was only about 10 % of the total labour force. As a consequence, trade unions need to increase their membership and provide more effective service to their members. Trade unions are also required to develop their capacity which involves the need to increase organizational understanding, and institutional ability to act upon their organizational mandate, their rights and responsibilities, and those of their members, as well as capacity to advise government on labour 6 (Source: Depnakertrans, 2002 Paper of DG of Industrial Relation, Labour Protection and Inspection Policy, presented at National Seminar on Labour Inspection, Bali 1-3 April 2003

12 relations law and policy, and to plan, organize and conduct industrial relations training. In order to scale up the impact of the policy participation of trade unions, knowledge on policy advocacy needs to be improved. To strengthen their impact on the policy agenda trade unions need first and foremost to broaden their membership, increase their services and participate effectively in collective bargaining. Furthermore, it is also necessary to develop the research and networking skills among trade unions. Another area for improvement is in promoting gender equality in view of the highly increasing female labour force participation rate. It is a fact that in the Indonesian labour market, female workers have inferior positions and often face unequal pay compared to those of male workers. 7 Therefore considering gender concerns at the workplace can help to reduce the vulnerability of women workers and enhance the strategic role of unions through the integration of gender issues in the collective bargaining process. The role of trade unions and the potential of collective bargaining in promoting gender equality in the terms and conditions of employment such as on equal pay, sexual harassment and maternity protection need to be highlighted. Trade unions carry an obligatory responsibility to protect and promote the interests of women in the workplace. In spite of their increasing labour force participation, it can be seen that women are still under-represented in trade union membership and leadership positions. Trade unions need to promote female participation and to ensure that women are visible and active in all aspects of unionism. 9 The practices of rights at work will be influenced significantly by a progressive human resource management policy translated into practice. Human resource management policies and practices that are geared to proper recruitment and training, motivational systems, two-way communication, Building capacity of employers and enterprise management 7 The National Development Masterplan for Women Empowerment, Ministry of Women Empowerment, Republic of Indonesia, 2000.

13 Promoting the declaration on fundamental principles and rights at work career development, a people-oriented leadership and management style, will lead to better practices of trade unionism, collective bargaining and workplace bipartite cooperation and prevention from forced labour and discrimination at work. Respect for fundamental rights is necessary since it provides the sine qua non conditions for being able to establish appropriate and fair alliances with the worker in collective bargaining. This in turn engenders sustainable increases of productivity and competitiveness, which ensures a lasting and successful future for the enterprise. The strategy would be to promote the development of corporate culture with healthy labour relations that respect fundamental rights and improve productivity, competitiveness and prosperity based on social justice. The role of employers associations in the promotion of the Declaration is also pivotal. The Employers Association of Indonesia, which was established in 1952 under the name All-Indonesia Employers Assembly for Social Economic Affairs, PUSPI, and later renamed APINDO in 1985, is the recognized employers organization that oversees the field of manpower in general terms and industrial relations in specific terms, on a national scale. The key to transforming APINDO into an effective employers organization is initially by determining what it wants to be, the services it wants to provide its members, the organization and operating model needed to support its vision and mission, and the strategic programs it intends to implement. It is only after clearly defining these that APINDO will be able to start its journey to transform itself into an effective and reliable organization and a pillar for balanced growth. 10 The effective promotion of the ILO Declaration on Fundamental Principles and Rights at Work by APINDO will help promote freedom of association, eradicate discrimination at the workplace and freedom from forced labour. A case in point is that the progress made by APINDO to promote equal employment opportunities which encourage members to adopt equality in recruitment, promotion and better protection for maternity rights.

14 The realization of fundamental principles and rights at work will be a clear step contributing to poverty reduction. Therefore policy changes need to emphasis the promotion and implementation of these rights. Concluding remark and policy recommendations The fulfillment of freedom of association and collective bargaining will eliminate social exclusion of workers and promote people participation in the policy making and its implementation. Thus, programmes to support the development of capacity of trade unions and employers with respect to rights should be a priority consideration. Moreover, enhanced partnership between employers and workers at workplace levels will also lead to better implementation of these rights and establish a basis for efficiency with equity. Similarly, the elimination of discrimination at the workplace requires a lucid strategy to reduce poverty through better practices in access to employment, promotion and vocational trainings. Finally, a key area in the implementation of the fundamental principles and rights at work, is the need to strengthen law enforcement, dispute settlement and labour administration as well as labour inspection mechanisms, including the role of the Indonesian National Police in labour issues. This will require strengthening and modernizing the capacity of central government (Department of Manpower and Transmigration) and Regional Government (Provinces and Districts) as key players in contributing to poverty alleviation through industrial peace based on social justice. 11