TUAC has published an assessment of Indonesia’s bid for OECD membership, highlighting significant issues around workers’ rights and social dialogue in the country.
Based on information from Indonesian trade unions, the report shows substantial gaps between Indonesia’s current labour framework and OECD standards. Recent legislation has only worsened the severe restrictions on workers’ freedom to organise.
The freedom of workers to organise in trade unions in Indonesia requires substantial improvement. Employers frequently threaten to terminate employment contracts when workers attempt to organise, and the 2020 Omnibus law has made this situation worse by expanding insecure forms of employment.
Indonesian law severely constrains trade union formation through burdensome requirements. Unions must gain support from over 50 percent of workers in workplace ballots where both employers and government representatives can be present, with clear risks of intimidation. Indonesian authorities have the power to unilaterally dissolve or suspend trade unions, contributing to the country’s extremely low union density of just under 4 percent.
Beyond organising rights, the report identifies several other critical labour issues. It documents widespread child labour in Indonesia, with over 800,000 children between ages 10-14 engaged in work. The gender pay gap has continued to increase over the last decade and stands at approximately 23 percent, substantially higher than the global average.
The report also examines Indonesia’s social dialogue institutions, including the National Wage Council and frameworks for collective bargaining. Despite their formal existence, these mechanisms are often bypassed or undermined.
The tripartite mechanisms in Indonesia exist on paper, but in practice they're being undermined. Trade unions report systematic delays in validating collective agreements and government-imposed wage ceilings that bypass proper social dialogue.
Guaranteeing freedom of association and collective bargaining rights are clear prerequisites for TUAC for Indonesia’s OECD membership. The current legal framework not only allows for the unilateral dissolution of trade unions but also contains provisions that can be used to arbitrarily arrest union leaders.
The report outlines essential reforms needed for Indonesia’s accession, including strengthening protection against anti-union discrimination, improving occupational health and safety committees, reforming anti-trafficking laws to better protect children from exploitation, addressing the gender pay gap, taking decisive action to formalise work, adhering to the OECD Guidelines for Multinational Enterprises, and subsequently establishing an effective National Contact Point in line with the Guidelines.
For Indonesia’s candidacy to advance, TUAC calls for concrete and urgent commitments to protect workers’ rights and establish effective social dialogue mechanisms in line with OECD standards.
Read TUAC’s complete assessment here.
Image credit: OECD
