In Preparation for the ILO’s submission to the PovertyAlleviation Committee in Indonesia, a series of 12(twelve) Technical Briefing Notes (TBNs) have beenprepared which serve two purposes; first, asbackground documents, on issues and policy choicescritical to poverty reduction and secondly, as buildingblocks towards a comprehensive report: “Working Outof Poverty: an ILO submission for the Indonesia PRSP”.

This briefing note address Promoting the declarationon fundamental principles and rights at work. Otherthemes in series include the following:

• Employment dimensions of macro and sectoralpolicies;

• Decentralization and decent work: making theconnection to the MDGs;

• Job creation and enterprise development (SMEsand local economic development);

• Youth employment: pathways from school towork;

• Rural development: access, employment andincome opportunities;

• Skills development for economic growth andsustainable livelihoods;

• Eliminating the worst forms of child labour;

• Social protection for all;

• Promoting good governance in the labour marketby strengthening tripartism and social dialogue;

• Migration: opportunities and challenges forpoverty reduction;

• Gender and poverty.

Copyright@International Labour Organisation 2004

First published 2004

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ILO

A Series of Policy RecommendationsDecent Work and Poverty Reduction in Indonesia, 2004

ISBN 92 2 015540 0

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Introduction

PROMOTING THEDECLARATION ONFUNDAMENTAL PRINCIPLESAND RIGHTS AT WORK

It has commonly been understood that povertyis a multidimensional phenomenon. It relates to thelack of assets and regular income flows, vulnerability,powerlessness and social exclusion. One dimensionof poverty is deprivation of human capability. No onedoubts that poverty connotes capability deprivation.Capacity development is therefore very crucial toreduce poverty. Another important and relateddimension is the absence of fundamental humanrights, including at the workplace.

In 1998 the International Labour Conferenceadopted the ILO Declaration on FundamentalPrinciples and Rights at Work. It was declared thatall Members, even if they have not ratified the ILOFundamental Conventions, have an obligation torespect, promote and realize the fundamentalprinciples and rights at work. These rights are: (a)freedom of association and the effective recognitionof the right to collective bargaining; (b) theelimination of all forms of forced or compulsorylabour; (c) the effective abolition of child labour; and(d) the elimination of discrimination in respect ofemployment and occupation. These rights which areenshrined as the ILO Core Conventions (see box1), are considered fundamental to achievesustainable economic growth and development.

1

Promoting the declaration on fundamental principles and rights at work

The ILOhighlighted thefact that growthshould beaccompanied bya minimum set ofrules for asociety tofunction, basedon commonvalues and byvirtue of whichrelevant partieshave thepossibil ity toclaim their fairshare of the

wealth that they contributed to creating. One of theeffective means for this is the realization of thefundamental and principles rights at work. Betterworkers’ rights result in workplace efficiency, stabilityand ultimately faster economic and balanced growth.Improved rights at the workplace guarantees betterdistribution of income, alongside improvement inefficiency and productivity. The Declaration has asignificant and crucial role in overcoming poverty. Itis a means for empowerment, creating opportunity,security and improving dignity. It contributes to asocial peace, reduction of risks, stability whichattracts investment that in turn boosts economicgrowth and generates employment.

This briefing note will elaborate the linksbetween fundamental principles and rights at workand the need for its realization in order to contributeto poverty reduction. The main focus of this briefingnote will be on freedom of association and the rightsto collective bargaining which are also seen as vitallyimportant in order to secure the other threefundamental rights.1

Decent work is a condit ion in whichopportunities exist for women and men to obtaindecent and productive work, in conditions offreedom, equity, security and human dignity (ILO,1999). It implies access to employment with the

Convention 87 Freedom of association andprotection of the right toorganize, 1948

Convention 98 Right to organize and collectivebargaining, 1949

Convention 29 Forced labour, 1930

Convention 105 Abolition of forced labour, 1957

Convention 100 Equal renumeration, 1951

Convention 111 Discrimination (employment andoccupation), 1958

Convention 138 Minimum age, 1973

Convention 182 Worst forms of child labour, 1999

Box 1. ILO Core Conventions

1 The issue of child labour is covered under a separate Technical BriefingNote

Declaration onfundamental

principles rightsat work inIndonesia

2

recognition of basic rights at work, a guarantee tothe absence of discrimination at work, an incomeenabling one to satisfy basic economic, social andfamily needs and responsibilities, an adequate levelof social protection for the workers and familymembers and the exercise of voice and participationat work, directly or indirectly through self-chosenrepresentative organizations.

The government of Indonesia has ratified allcore ILO Conventions and has committed to completea labour law reform programme. This was triggeredby the 1998 reformasi movement that also broughtreforms in political and economic policy. Thetransformation however from decades ofauthoritarian rule to a more democratic society wasnot easy. There is in general a political will to respectthem but in a highly diverse and complexenvironment many violations and obstacle persists.Steady progress for the full realization and fulfillmentof the fundamental rights, remains a great challengefor the coming years.

Freedom of association means the right ofworkers and employers to join organization of theirown choosing and to get involved in the collectivebargaining process. Collective bargaining ispotential ly a powerful means to faci l itatecoordination between employers’ organization andunions in wage setting, working conditions and otherindustrial relations issues. Freedom of associationguarantees better representation of the workersand results in better civil society participation in thegovernance and development process.

The significant role of trade unions in Indonesiahas been noted several decades ago, since theemergence of nationalists, anti-collonial struggle andmovement. However, during the new order regime,freedom of association was repressed and tightlycontrol led by the rul ing parties. The maincharacteristic of that period was the absence offreedom of association since the governmentrecognized only a single union of SPSI2 to representall workers. Restrictions on the existence of free andindependent trade unions were applied both in theprivate and public sectors. In the public sector thegovernment policy obliged all teachers to join PGRI3

Freedom ofassociation andcollectivebargaining inIndonesia

3

Promoting the declaration on fundamental principles and rights at work

and all public servant were forced to join KORPRI4.At this period, the government promoted “PancasilaIndustrial Relation” policy aimed at achievingpartnership between workers and employers. Inpractice, however, this policy was used to restrictworkers’ right and disguised dispute settlement. Itwas also a common phenomenon that military andpolice officers were involved in industrial relationsdispute settlement.

The immediate positive consequences of theratification of ILO Convention No. 87 and theenactment of Trade Union Act No. 21 of 2000 can beseen from the fast growing number of free andindependent trade unions, particularly at thenational level. To date more than 70 nationalfederations of trade union have been organized andregistered. There is also a significant increase in thenumber of plant level trade unions with a totalmembership of about 10 million. The table belowshows figure of trade union growth at national andplant levels from 1997 to 2001.

Table 1Trade Union at National Level (1997 – June 2001)

Year

1997

1998

1999

2000

2001

Federation

Total % Of increase

1 --

11 100,00

21 90.91

32 52.38

58 81.25

Plant Level TU

Total % Of increase

12,839 --

2,836 -77.91

6,309 122.46

11,647 84,61

15,725 35.01

Source: Depnakertrans (2001)

2 SPSI or All Indonesian Workers Union has been restructured and becamea confederation in the beginning of 2000.

3 PGRI was a teachers association closely controlled by the ruling parties,but this condition has changed later on. Currently PGRI affiliates toKongres Serikat Pekerja Indonesia (KSPI) the newest confederationestablished in February 2003.

4 KORPRI is more of civil servant association than a genuine trade union.There are no other associations of public servant.

4

In addition to the Trade Union Act, the newlyenacted Manpower Act No. 13 of 2003 alsoenshrines the recognition of freedom of associationsand collective bargaining including the right to strikeand to lock out. The main challenge is the realizationof these rights through the effective implementationof the new legislation, which requires enhancedcapacity of both state and non state actors inindustrial relations to understand and carry out theirrespective rights, obligations and mandates underthe law.

Though there has been progress in dealing withforced labour issues in Indonesia, some still observethat many instances of forced labour continue toexist in various forms. The newly enacted ManpowerAct clearly stipulates the abolition of forced labourand discrimination at the workplace.

One of the typical forms of forced labour inIndonesia is connected with exploitation of childrenand women, who are being traff icked bothdomestically and internationally. This case takesplace in the form of debt bondage experienced byprospective domestic migrant workers.

Similar to forced labour, despite progressachieved, many forms of discrimination at theworkplace still exist. Discrimination happens invarious forms particularly based on gender,especially in a situation where women constitute alarge and growing portion of the labour market. Mostwomen workers are concentrated at the lowestlevels of production and in many cases often havelimited access to training and promotion as well asleadership position. In addition, many practicesindicate that compared to their counterpart, femaleare covered by different set of terms and conditionsof employment and social security such as in pensionscheme and family allowances.

Two positive development have occurred.Indonesia has finally been able to ratify ILOConvention No. 81 (adopted in 1947) concerningLabour Inspection which can systematical lycontribute to the strengthening of the nationallabour inspectorate and labour administration. Itcontributes also to effectiveness in enforcing legalprovision against forced labour and discrimination.

Forced labour anddiscrimination

5

Promoting the declaration on fundamental principles and rights at work

Secondly, the ILO and its declaration project viaseveral tripartite trainings and workshops on genderequality through collective bargaining (including thedevelopment of training materials and a tripartitetraining of trainers course) , has attracted a greatdeal of interest and acceptance from participants inseven major provinces.

After decades of authoritarian rule andrepression of workers rights, workers and employersin Indonesia found themselves with the governmentto be in almost at the same starting point withregard to the capacities required in a modern,competitive and democratic industrial environment.

In the effort to reduce poverty, freedom ofassociation and collective bargaining play asignificant role in bringing about industrial relationpeace at the enterprise and national levels foreconomic and social progress. It increases thetripartite constituents and civil society participationin the decision-making process and thereby ensuressocial justice and eliminates social exclusion ofworkers who are often the poorest and the mostvulnerable groups in society. Effective freedom ofassociation and collective bargaining promote socialinclusion by allowing workers - who have marginaleconomic positions, to influence social economicpolicy at enterprise, district, provincial and nationallevels.

Since the realization of the fundamentalprinciples and rights at work enhances economicdevelopment, capacity building for government,trade unions and employers’ organizations isessential. Similarly, social dialogue, bipartite andtripartite mechanisms also need to be strengthened.Capacity refers to organizational and technicalabilities, relationships and values that enableorganizations, groups and individuals to carry outtheir functions and achieve development objectivesover time.

Enhanced capability of the poor and excludedgroups will enable them to effectively participate,negotiate and influence policy that affects their well-being. Capacity building on fundamental principlesand rights at work is helping to create sound and

Capacitydevelopment for

fulfillment offundamental

rights at work

6

stable industrial relations that benefit all, includingpoor workers. In addition, effective labour law reformand enforcement will provide a favourable legalenvironment and basis for the realization of theserights.

The role of government for poverty reductionand in the fulfillment of freedom of association iscrucial. Government plays a key role in realisingthese rights. Capacity building is therefore neededto enable the Government of Indonesia to properlyand effectively implement labour laws and policies,specially the recently enacted labour legislationunder the reform programmes. This extends to localgovernments that have to assume enlargedresponsibi l i t ies envisaged under thedecentralization law.

One of the most important roles of thegovernment related to the realization of thefundamental rights at work is labour inspection andlabour administration to enforce the legislationcovering terms and conditions of work and to helpemployers and workers on how to comply with thelaw. Better capacity in labour inspection cancontribute to reduce vulnerability of workers frombeing trapped as forced labour and discrimination,which in turn contribute to law enforcement. Labourinspection will ensure compliance with labour lawsand regulation particularly by employers andprovide technical information and advice toworkers and employers on labour laws andregulations. Labour inspection can also collect andanalyze data on the incident of violations of labourlaw on freedom of association, discrimination andforced labour.

Prior to the implementation of the RegionalAutonomy Act5, the authority of labour inspectionrested within the Department of Manpower andTransmigration. As a consequence of districtautonomy, the Department of Manpower andTransmigration does not have direct formal linksanymore with all labour inspectors in the field. Underthis new regulation, central government has

Building thecapacity ofgovernment

5 In 1999, the government passed the Act on Regional Autonomy (Act No.22 of 1999), which decentralize some of central government office andfunction, including Some office which previously under the Departmentof Manpower and Transmigration.

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Promoting the declaration on fundamental principles and rights at work

authority to formulate strategy, technical guidanceand evaluation of labour inspection. The provinceand district (or municipal) government has authorityin the practice of labour inspection. There is no directl ink between Department of Manpower andTransmigration to Manpower Office responsible forthe operational function of labour inspection underthe Manpower Office of District and Provincegovernment.6

An effective dispute settlement system is alsoessential to promote sound and stable industrialrelations. The capacity and effectiveness of thegovernment in establishing a modern system undera proposed law is underway. It should be able todemonstrate that the new system consisting ofconciliation, mediation and arbitration and labourjudges will be able to dispense justice quickly,inexpensively and fairly when dealing with labourdisputes.

Another area that needs to be addressed inorder to ensure law enforcement in relation to labourissues, is the capacity of the Indonesian NationalPolice (INP). As mandated by legislation reform, theINP which was transferred from a military to a civilianagency, has a strategic task in the protection ofhuman rights. This capacity need to be enhanced insupporting law enforcement in the areas of freedomof association and collective bargaining, freedomfrom forced labour and discrimination.

Indonesian trade unions have beenexperiencing a rapid multipl ication of theirmembership, although in 2002 union density inIndonesia was only about 10 % of the total labourforce. As a consequence, trade unions need toincrease their membership and provide moreeffective service to their members. Trade unions arealso required to develop their capacity which involvesthe need to increase organizational understanding,and institutional abil ity to act upon theirorganizational mandate, their r ights andresponsibilities, and those of their members, as wellas capacity to advise government on labour

Building capacityof trade unions

6 (Source: Depnakertrans, 2002 “Paper of DG of Industrial Relation” ,Labour Protection and Inspection Policy, presented at National Seminaron Labour Inspection, Bali 1-3 April 2003

8

relations law and policy, and to plan, organize andconduct industrial relations training.

In order to scale up the impact of the policyparticipation of trade unions, knowledge on policyadvocacy needs to be improved. To strengthen theirimpact on the policy agenda trade unions need firstand foremost to broaden their membership, increasetheir services and participate effectively in collectivebargaining. Furthermore, it is also necessary todevelop the research and networking skills amongtrade unions.

Another area for improvement is in promotinggender equality in view of the highly increasingfemale labour force participation rate. It is a factthat in the Indonesian labour market, femaleworkers have inferior positions and often faceunequal pay compared to those of male workers.7

Therefore considering gender concerns at theworkplace can help to reduce the vulnerability ofwomen workers and enhance the strategic role ofunions through the integration of gender issues inthe collective bargaining process. The role of tradeunions and the potential of collective bargaining inpromoting gender equality in the terms andconditions of employment such as on equal pay,sexual harassment and maternity protection needto be highlighted.

Trade unions carry an obligatory responsibilityto protect and promote the interests of women inthe workplace. In spite of their increasing labourforce participation, it can be seen that women arestill under-represented in trade union membershipand leadership positions. Trade unions need topromote female participation and to ensure thatwomen are visible and active in all aspects ofunionism.

The practices of rights at work will be influencedsignificantly by a progressive human resourcemanagement policy translated into practice. Humanresource management policies and practices thatare geared to proper recruitment and training,motivational systems, two-way communication,

Building capacityof employers andenterprisemanagement

7 The 2000-2004 National Development Masterplan for WomenEmpowerment, Ministry of Women Empowerment, Republic of Indonesia,2000.

9

Promoting the declaration on fundamental principles and rights at work

career development, a people-oriented leadershipand management style, will lead to better practicesof trade unionism, collective bargaining andworkplace bipartite cooperation and prevention fromforced labour and discrimination at work. Respectfor fundamental rights is necessary since it providesthe sine qua non conditions for being able to establishappropriate and fair alliances with the worker incollective bargaining. This in turn engenderssustainable increases of productivity andcompetitiveness, which ensures a lasting andsuccessful future for the enterprise. The strategywould be to promote the development of corporateculture with healthy labour relations that respectfundamental rights and improve productivity,competitiveness and prosperity based on socialjustice.

The role of employers associations in thepromotion of the Declaration is also pivotal. TheEmployers Association of Indonesia, which wasestablished in 1952 under the name All-IndonesiaEmployers Assembly for Social Economic Affairs,PUSPI, and later renamed APINDO in 1985, is therecognized employers’ organization that overseesthe field of manpower in general terms and industrialrelations in specific terms, on a national scale. Thekey to transforming APINDO into an effectiveemployers’ organization is initially by determiningwhat it wants to be, the services it wants to provideits members, the organization and operating modelneeded to support its vision and mission, and thestrategic programs it intends to implement. It is onlyafter clearly defining these that APINDO will be ableto start its journey to transform itself into an effectiveand reliable organization and a pillar for balancedgrowth.

The effective promotion of the ILO Declarationon Fundamental Principles and Rights at Work byAPINDO will help promote freedom of association,eradicate discrimination at the workplace andfreedom from forced labour. A case in point is thatthe progress made by APINDO to promote equalemployment opportunit ies which encouragemembers to adopt equality in recruitment, promotionand better protection for maternity rights.

10

The realization of fundamental principles andrights at work will be a clear step contributing topoverty reduction. Therefore policy changes needto emphasis the promotion and implementation ofthese rights.

The fulfillment of freedom of association andcollective bargaining will eliminate social exclusionof workers and promote people participation in thepolicy making and its implementation. Thus,programmes to support the development of capacityof trade unions and employers with respect to rightsshould be a priority consideration. Moreover,enhanced partnership between employers andworkers at workplace levels will also lead to betterimplementation of these rights and establish a basisfor efficiency with equity.

Similarly, the elimination of discrimination at theworkplace requires a lucid strategy to reduce povertythrough better practices in access to employment,promotion and vocational trainings.

Finally, a key area in the implementation of thefundamental principles and rights at work, is theneed to strengthen law enforcement, disputesettlement and labour administration as well aslabour inspection mechanisms, including the role ofthe Indonesian National Police in labour issues. Thiswill require strengthening and modernizing thecapacity of central government (Department ofManpower and Transmigration) and RegionalGovernment (Provinces and Districts) as key playersin contributing to poverty alleviation throughindustrial peace based on social justice.

Concludingremark andpolicyrecommendations

11