Industry and manufacturing are major aspects of Indonesia’s economy, and account for nearly half of the country’s GDP.
However, industry workers endure harsh conditions through low wages and long hours.
This article explains how factory conditions in Indonesia affect workers’ health and safety.
The industry sector of Indonesia’s economy is the largest source of GDP for the country, making up approximately 46% of its economy. With over 95 million people employed as laborers, the industry sector accounts for over 34% of Indonesian employment. Indonesia’s most significant exports include:
- Petroleum and natural gas
- Garments and Textiles
- Electronics and mobile devices
The majority of the products are produced in factories, many of which lack substantive regulations and policies that protect workers’ rights and safety.
As with many other developing nations, Indonesian factory workers endure harsh conditions, primarily:
- Low wages
- Long hours
- Hazardous working conditions
Other issues that Indonesian workers face include child labor, a lack of trade unions, and discrimination and harassment against female workers.
The legal minimum wage in Indonesia has steadily increased over the last decade. Each province in the country sets its own minimum wage, and as of 2021, most require at least $200 per month. Others still fall behind, including the Jambi, Lampung, and Yogyakarta regions, and many others do not plan to initiate increases in the coming years, due primarily to the economic setbacks from COVID-19.
Despite these regulations, factories and manufacturers can claim exemption from providing employees with minimum wages under the claim that doing so will put financial strain on the company. As a result, Indonesian factory workers are among the lowest paid in all of East Asia, with some workers making as little as $33 per month, far below what is considered a livable wage for the country, and far below the international wage standards.
Indonesian regulations prohibit factories from forcing laborers to work more than 3-hours of overtime per day, and 14-hours per week. In comparison to factory conditions in other developing nations, including Vietnam, Bangladesh, and India, Indonesia has comparatively strict regulation regarding overworking laborers. The majority of Indonesian factories practice 40-hour work weeks, with the exception of high-demand production seasons. However, many factories still practice forced labor and excessive hours, particularly smaller factories that escape the strict scrutinization that larger factories face. Many workers have reported supervisors threatening unemployment or pay deductions from those who do not agree to overtime or excess hours.
While low wages are the primary source of exploitation in Indonesian factories, hazardous conditions are another prevalent concern for health and safety. In many sectors of industry, particularly the garment and electronics sectors, hazardous fumes from dust and fibers are a significant concern for worker safety. Many factories lack proper ventilation systems, resulting in workers’ long-term exposures to unsafe air and chemical toxins.
In addition to air pollutants, many Indonesian factories lack the structural integrity and architectural safety precautions to protect workers in the case of an emergency. In 2019, 34 Indonesian factory workers died in a factory fire. The factory was poorly equipped with fire alarms and extinguishers, and lacked suitable fire exits for its elderly and disabled workers.
These types of concerns are prevalent throughout the country, with many workers reporting concerns for their health and safety.
Indonesia has strong regulations across its provinces that manage the working conditions of factories. However, the enforcement of these regulations is primarily focused on large factories that serve major international corporations. Small and medium-sized factories typically go under the radar, and are able to avoid scrutinization from inspections. As a result, many large corporations subcontract their production to smaller companies that can avoid regulation and higher wages. Some of these corporations include:
- Calvin Klein
- Marks and Spencer
Due to the lack of regulation in smaller factories, many industries are able to escape legal regulation. As a result, worker exploitation is high in many industries across the country. Worker exploitation occurs primarily through:
- Child labor
- Discrimination and harassment towards women
- Unprotected labor unions
Despite labor laws preventing employment under 18 years of age, Indonesia has high rates of child labor. Many industries take in underprivileged, orphaned, or impoverished children as forms of underpaid, or unpaid, labor. The primary industries that exploit underaged workers include:
- Palm oil
Substantial efforts to reduce child labor have occured in the past decade, with oranizations working with the Indonesian government to remove children from illegal working conditions and place them into schools and safe homes. In 2020, 9,000 children were removed from working conditions and enrolled in schools, and $357,000 was dedicated to reducing child poverty.
While these steps have been substantial in eliminating child labor in Indonesia, many children are still forced to work in hazardous conditions. COVID-19 significantly worsened the issue, as many children were orphaned and impoverished, and subsequently left with few other options other than underpaid labor.
Discrimination and Harassment
The garment industry is one of Indonesia’s leading sources of industrial income, and its workforce is 60% female. Despite this, very few are in supervisor or managerial positions. Pay discrimination is a frequent issue in Indonesian industries, with women earning an average of 23% less than men. In addition, women frequently face sexual harassment and exploitation under threat of unemployment or pay cuts, with approximately 1 in 5 women voicing concerns about harassment.
However, while discrimination is high in Indonesian industries, conditions for female workers are substantially better than other developing countries, such as Vietnam or Bangladesh, and women often report being able to safely seek help from trade unions and Human Resources in their industries.
Unlike other developing nations in Asia, Indonesia has several officially recognized labor unions. These unions advocate for improvements in:
- Child labor enforcement
- Gender equality
- Rights of migrant workers
- Labor flexibility
- Job security
- Social security
However, these unions currently lack the right to collective bargaining and organizing. This results in limited effectiveness, as employers can potentially fire employees who promote action against the company. The recognized unions in Indonesia have substantial influence, however, and advocate for workers’ rights at the national and regional levels, and are critical in promoting a sustainable balance between economic growth and worker safety.