INDONESIA
Baseline Report:
Worker Perspectives
from the Factory and Beyond
July 2012
Copyright © International Labour Organization (ILO) and International Finance Corporation (IFC) (2012)
First published (2012)
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ILO Cataloguing in Publication Data
Better work Indonesia: garment industry baseline report : worker perspectives from the factory and beyond /
International Labour Office. - Geneva: ILO, 2012
Better Work discussion paper, ISSN 2227-9539, 2227-9547 (web pdf)
International Labour Office
clothing industry / clothing worker / working conditions / occupational health / family / Indonesia
08.09.3
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Copyright © International Labour Organization (ILO) and International Finance Corporation (IFC) (2012)
First published (2012)
Table of Contents
Foreword...................................................................................................................................................................................iii
Executive Summary .................................................................................................................................................................. iv
Section 1: Introduction............................................................................................................................................................... 1
2.1 Basic demographics of the garment industry .................................................................................................................. 2
2.2 Family and household composition................................................................................................................................. 4
Section 3: At the workplace ....................................................................................................................................................... 5
3.1 Occupational safety and health (OSH) ............................................................................................................................ 5
3.2 Hours and rest days ......................................................................................................................................................... 9
3.3 Compensation ............................................................................................................................................................... 11
3.4 Workplace systems and relations .................................................................................................................................. 14
3.5 Training opportunities ................................................................................................................................................... 18
3.6 Respect and welfare ...................................................................................................................................................... 19
Section 4: Beyond the workplace............................................................................................................................................. 23
4.1 Children of workers ...................................................................................................................................................... 23
4.2 Financial independence ................................................................................................................................................. 23
4.3 Life satisfaction ............................................................................................................................................................. 24
4.4 Communication ............................................................................................................................................................. 25
Section 5: Conclusion .............................................................................................................................................................. 28
References ............................................................................................................................................................................... 30
List of Tables
Table 1: Age of workers in factories .......................................................................................................................................... 2
Table 2: Level of education among factory workers .................................................................................................................. 2
Table 3: Employment history of factory workers ...................................................................................................................... 3
Table 4: Breakdown of workers’ roles within their factory ....................................................................................................... 3
Table 5: Level of concern among workers regarding temperature control in factories .............................................................. 6
Table 6: Non-medical facilities available at factories, according to workers ............................................................................. 6
Table 7: Level of concern among factory workers regarding occupational safety ..................................................................... 7
Table 8: Frequency with which workers experience injury at their factory ............................................................................... 7
Table 9: Level of concern among factory workers over working hours ................................................................................... 10
Table 10: Barriers to promotion in factories, as perceived by workers .................................................................................... 14
Table 11: Types of contract on which factory workers are employed ..................................................................................... 16
Table 12: Induction training received by factory workers ....................................................................................................... 18
Table 13: Training received by factory workers within past six months.................................................................................. 19
Table 14: Workers’ concerns regarding sexual harassment and verbal and physical abuse in factories .................................. 19
Table 15: Fairness and respect shown to workers by supervisors in factories, as perceived by workers ................................. 21
Table 16: Causes of disciplinary action in factories, as perceived by workers ........................................................................ 21
Table 17: Types of disciplinary action taken by supervisors in factories, as reported by workers........................................... 21
Table 18: Adherence to factory rules by supervisors, as perceived by factory workers ........................................................... 22
Table 19: Education among dependents of factory workers .................................................................................................... 23
Table 20: Remittances to family members by factory workers ................................................................................................ 23
Table 21: Financial help received by factory workers from their families ............................................................................... 24
Table 22: Interest expressed by factory workers in receiving best practice information.......................................................... 25
Table 23: Mobile phone usage by factory workers .................................................................................................................. 26
Table 24: Daily radio usage by factory workers ...................................................................................................................... 26
Table 25: Internet usage by factory workers ............................................................................................................................ 26
Table 26: Usage of social media among factory workers ........................................................................................................ 27
List of Figures
Figure 1: Nature and frequency of ailments affecting factory workers ...................................................................................... 5
Figure 2: Health services available at factories, against use of such services by workers ......................................................... 8
Figure 3: Procedure for signing overtime agreements in factories, as reported by workers ..................................................... 11
Figure 4: Concern among factory workers regarding pay practices ......................................................................................... 11
Figure 5: Reasons for the award of bonuses, as reported by factory workers .......................................................................... 13
Figure 6: Information included on pay slips, as reported by factory workers .......................................................................... 14
Figure 7: Number of non-permanent and permanent workers at Better Work factories .......................................................... 17
Figure 8: Symptoms of anxiety and distress experienced by factory workers ......................................................................... 25
Page ii of 38
Foreword
This report is one of a series of papers presenting data from worker surveys conducted as part of a
rigorous impact assessment of the Better Work programme. The data presented here were collected
as the Better Work programme was starting up in Indonesia. It forms the baseline against which the
impact of the Indonesia programme will be measured in future years.
Better Work strives to have a significant impact on the lives of workers, the business practices of
firms, and the social, human and economic development of countries. Measuring this impact in a
credible way requires special effort and particular tools. In 2007, Better Work selected a
multidisciplinary team of researchers to design and implement the impact assessment framework.
The team, led by Professor Drusilla Brown of Tufts University (United States), comprises six
economists and statisticians, three psychologists with expertise in programme evaluation and
human development, and two scholars with expertise in workplace innovation, organization and
occupational safety and health.
As of May 2012, surveys were under way in Haiti, Indonesia, Jordan, Nicaragua and Vietnam. In each
country, data collection is carried out in collaboration with a local research partner. The survey
instruments, as well as the training for local research partners, have been developed by the team at
Tufts University.
For each factory, the baseline data include findings drawn from computer-based surveys conducted
with: (i) four management staff, such as the General Manager, Chief Financial Officer, Production
Manager, Factory Manager, Human Resource Manager and Industrial Engineer; and (ii) 30 workers
randomly selected from the factory’s roster of production employees. The worker surveys are
implemented using Audio Computer Assisted Self Interview (ACASI) methodology, whereby workers
responded to audio-narrated questions in the local language using a minicomputer or tablet
attached to earphones. The management surveys are conducted using a Computer Assisted Personal
Interview (CAPI) without audio assistance. Using this innovative, highly confidential method to
collect primary data, in accordance with protocols governing the surveys’ proper implementation,
allows workers and managers to disclose sensitive information without fear of repercussion or
retaliation.
This report was written by Anika Huq. It presents a baseline and does not therefore demonstrate the
impact of Better Work’s interventions. The survey data shed an important light on workers’ lives and
their perception of their working conditions. They highlight some of the opportunities and
challenges of working in the global garment industry. In addition to establishing a benchmark for
measuring the long-term effect of the Better Work programme, the data will be used to inform the
programme about any worker needs and priorities that might be addressed immediately in service
delivery.
As every country in which Better Work operates has a unique institutional and cultural context, this
report also presents additional desk-based research aimed at providing the background necessary to
interpret the survey data effectively.
iii
Executive Summary
This report synthesizes worker survey results with country, regional and industry-specific trends. The
purpose of this is to identify how Better Work Indonesia could affect workers’ lives inside and
outside of the factory, and devise programme innovations accordingly.
Notable findings are outlined below.
Demographics and family and household composition
Workers in the sample were fairly well-educated. Around 81 per cent of workers had completed
junior high and/or high school. A considerable percentage also had work experience. Some 45 per
cent of the sample reported that they had had at least one other Indonesian garment industry job.
Some 65 per cent had been employed full time for over one year and some 25 per cent had worked
full time 7 years or longer. For 28.8 per cent of workers, their current job was either their first job or
they had previously been employed in home production (11.1 per cent) or household enterprise (3.9
per cent).
However, a considerable minority of workers reported having no work experience (39.9 per cent). A
significant proportion of workers were parents: 38.3 per cent reported having sons, and 38.6 per
cent daughters.
At the workplace
Occupational safety and health (OSH)
Workers reported many concerns with health issues. Thirst emerged as a serious issue with 53.5 per
cent of workers reporting severe thirst often or every day. This may be connected with the high level
of concern regarding excessive heat in the factories, reported by 47.6 per cent of workers as a
problem.
Significant percentages of workers experienced the following symptoms occasionally, often or every
day: severe fatigue (42.1 per cent); stomach pain (30.6 per cent); dizziness (41.5 per cent); and head,
back, or neck ache (46 per cent). The level of concern over workplace hazards was also high. Around
59 per cent of workers reported concerns over dangerous equipment and injuries, and around 73
per cent over accidents and injuries. A significant percentage of workers (26 per cent) reported that
they had been injured at least once. Many workers were also concerned with their working
environment, including dusty or polluted air, bad chemical smells and noise levels.
Hours and rest days
A significant minority of workers expressed concerns regarding overtime. Some 21 per cent of
workers believed that overtime represented a concern for workers in the factory, and some 44 per
cent of workers were concerned specifically about working on Sundays. There does, however, seem
to be a discrepancy between the working hours reported and the percentage of workers eating
dinner in the factory, indicating that workers may not be stopping work when they claim to be. A
significant minority of workers also reported working at weekends.
The research also uncovered irregularities in relation to the signing of the written overtime
agreement. Though in principle the agreement should be signed by the supervisor and the worker,
proper procedure occurred in only 17.6 per cent of cases.
Page iv of 38
Compensation
Workers exhibited great concern regarding wages. Their concerns included payment of wages (71.5
per cent), excessive pay deductions (84.1 per cent), in-kind compensation (45.6 per cent), low wages
(83.2 per cent), confusion about the piece-rate (58.3 per cent) and broken punch clocks (76.8 per
cent). Workers consistently raised such concerns with management staff and trade union
representatives. Resigning and striking were much less common responses.
The baseline data collected revealed a unique use of pay incentives. Some 79 per cent of workers
reported that none of their pay was determined by piece-rate. Pay incentives related to work effort
were based instead on whether the worker or production line completed the production target
before the end of the work day. In this regard, 20.9 per cent of respondents reported that they
always received a bonus; an additional 23.1 per cent reported that they sometimes received a bonus
when the daily production target was filled.
Pay slips, a key component of human resources (HR) management, contained significant information
such as the date (75.4 per cent of respondents), ID number (68.0 per cent), regular hours (65.7 per
cent), overtime hours (71.0 per cent) and wage rate (69.5 per cent). Information about union dues
(22.4 per cent), bonuses (31.3 per cent) and deductions (15.0 per cent) was included less frequently.
Very few workers reported that they received information about their piece-rate (3.6 per cent) or
pieces completed (0.4 per cent).
Workplace systems and relations
The baseline data indicated that the garment factories surveyed exhibited rigid factory structures,
seemingly vigorous exercise of union membership and collective bargaining, and a high percentage
of non-permanent contracted workers.
When workers were asked perceived reasons why they were not promoted, a large fraction (38.1
per cent) considered that there were no barriers to promotion. The single biggest obstacle, from
their perspective, was lack of skill (19.7 per cent) followed by lack of education (7.1 per cent). There
was very little evidence that discrimination, of various forms, was a significant cause of failure to
advance professionally.
Rights to freedom of association and collective bargaining appeared to be vigorously exercised.
Across all categories of questions, workers reported that they often raised concerns with their trade
union representatives. Around 65 per cent of workers reported being a trade union member and a
slight majority, 51 per cent, reported being represented by a collective bargaining agreement.
Most workers (80.1 per cent) reported signing a contract, and 97.9 per cent of those workers
reported that the contract was in Bahasa Indonesia, a language they could understand. Most
workers (69.7 per cent), however, were employed on non-permanent contracts.
Training
Workers received training on a range of different topics. A very small percentage, 6.4 per cent,
reported receiving no induction training at all. The largest percentage of workers received training
on health and safety issues (35.4 per cent).
Between 17.9 and 29.2 per cent of workers reported that they had received training on grievance
procedures, benefits, skills upgrading, labour law, pay procedures, collective bargaining, safe
machine operation, overtime practices, work hours, worker rights, or basic skills. Between 11.3 and
13.6 per cent reported having received training within the last six months on new operations,
worker rights, collective bargaining, health and safety, safe machine operation and new skills.
Page v of 38
Training on fines was the topic reported by the smallest percentage of workers (2.3 per cent). A low
percentage (13.4 per cent) reported that they had received no training in the past six months.
Respect and welfare
An alarmingly high percentage (85.2 per cent) of workers reported concerns over sexual harassment.
In addition, 79.3 per cent were concerned about verbal abuse such as shouting or vulgar language,
and 87.4 per cent with physical abuse such as striking or pushing. Typically, around 30 per cent of
workers discussed their concerns with a supervisor or manager and another 30 per cent raised
concerns with their trade union representative. Another 10 per cent of workers had considered
resigning.
Workers also reported that their supervisors corrected them in a disrespectful way. Only 59.4 per
cent of workers felt that their supervisor corrected a mistake with fairness and respect. Meanwhile,
32.4 per cent reported that respectful supervision occurred only sometimes, and another 8.2 per
cent felt that such respectful corrections occured rarely. When asked to cite perceived reasons for
such disrespect, the largest percentage of workers (36.7 per cent) responded “none.”
Beyond the workplace
Children of workers
A significant minority of workers were also parents, with 38.3 per cent reporting having one or more
sons and 38.6 per cent one or more daughters. Most school-aged children of workers in this study
were in school. However, 3.2 per cent of sons and 3.4 per cent of daughters were not in school for
financial reasons.
Financial independence
Most workers (82.5 per cent) reported that they contributed to their family’s wealth either regularly
or occasionally. Despite this, 49 per cent of these workers also needed help from family members.
Life satisfaction
Few workers exhibited symptoms of depression most of the time. However, many workers reported
symptoms of depression some of the time, such as feeling restless (29.1 per cent), fearful (15.8 per
cent), sad (22.0 per cent), tearful (15.0 per cent) and hopeless about the future (20.4 per cent).
Communication
A large majority of workers (83.6 per cent) expressed strong interest in receiving information about
OSH, wages and other topics. The most common communication device used was mobile phone,
with 90.8 per cent of workers reporting using these. Television and radio were also commonly used:
77.4 per cent of respondents reported watching television daily, and 50.3 per cent of workers
reported listening to the radio daily. Regarding online communication, 38.6 per cent of workers
reported using the internet and 29.8 per cent were on Facebook.
Conclusion
Given the myriad worker issues revealed by the baseline data, various further avenues of research
are recommended.
Worker concerns with occupational safety and health, compensation and work hours will be
addressed through Better Work Indonesia assessments and advisory work. In addition, it is
suggested that further research be undertaken into how wage rates, which are set locally by district
or province, affect workers’ lives. Consideration should also be given as to how better HR
management practices in garment factories could make wage practices clearer to workers.
Page vi of 38
Although this study suggests that collective bargaining rights are vigorously exercised in the
factories, it would also be interesting to study in more detail what action union officials take when
faced with common worker complaints.
With concern to respect and welfare, an alarming number of workers reported concerns over sexual
harassment and verbal and physical abuse. The overwhelming majority of workers, however,
reported that they believed supervisors were fair or better at following the factory rules. It seems
therefore, that workers believe that it is acceptable under the factory rules to be treated this way.
Accordingly, workers should be trained to identify inappropriate workplace behaviour, while
managers should be trained to understand sexual harassment and its adverse impact. In addition,
employers should be advised to develop policies and procedures to prevent, identify and deal with
sexual harassment.
Finally, since a considerable majority of workers reported that they had children, and that workers
reported that they were not members of unions, were not being promoted, and were clocking in
long hours, a study into quality childcare options for the children of workers is recommended. This
would allow workers to become more involved in unions and other work-related activities.
Page vii of 38
Section 1: Introduction
The Better Work Indonesia programme, a partnership between the International Labour
Organization (ILO) and the International Finance Corporation (IFC) and funded by Australian Aid, was
launched in 2011. The programme aims to improve compliance with labour standards and working
conditions in the garment industry as regulated by the ILO Declaration on Fundamental Principles
and Rights at Work and its follow-up and Indonesian labour law, while at the same time promoting
competitiveness at the enterprise level. To establish a sustainable service, Better Work Indonesia
works with key stakeholders including the Indonesian Ministry of Manpower and Transmigration
(MoMT), the Indonesian Employers Association (APINDO), and the four main union federations of
the garment industry: Garteks, TSK Kalibata, TSK Pasar Minggu and Serikat Pekerja Nasional (SPN), as
well as with international buyers sourcing from Indonesia.
In addition to offering a growing range of assessment, advisory and training services to participating
factories, Better Work is conducting an impact assessment to study how it improves workers’ lives
inside and outside the factory, and the business case for compliance with labour standards. The
ultimate objective of the impact assessment is to support continuous improvement in programme
services.
To achieve this, Better Work Indonesia is partnering with Tufts University (United States), University
of Indonesia and University Gadjah Mada to collect and analyse a first round of data as a baseline for
future impact assessment research.
Surveys were conducted in 42 factories between September 2011 and February 2012. A total of 918
workers participated in the surveys using the Audio Computer Assisted Self Interview (ACASI)
procedure, whereby workers responded to audio-narrated questions adapted to the local language,
using a tablet. These surveys covered a broad range of topics in categories including occupational
safety and health, workplace systems and relations, compensation, and worker health and wellbeing.
The purpose of this report is to situate survey results in country, regional and industry-specific
contexts. The impact of the program is being assessed based on measures of: (i) innovations in
human resource management; (ii) improvements in working conditions; (iii) factory productivity; (iv)
product quality and complexity; (v) supply chain position; (vi) worker perceptions of workplace
satisfaction; (vii) compensation; (viii) physical and mental occupational health; (ix) worker and family
physical and mental health status and access to health care; (x) educational attainment of siblings
and children; and (xi) human rights related to forced labour, human trafficking, non-discrimination,
child labour, freedom of association and collective bargaining.
Page 1 of 38
Section 2: Demographics
This section outlines basic demographics of the workforce participating in this study, as well as their
family and household characteristics.
2.1 Basic demographics of the garment industry
The workforce surveyed was 92.2 per cent female. This overwhelming proportion of female workers
reflected the gender composition commonly observed in Indonesian garment factories where, as of
2008, 78 per cent of a total 500,000 workers were women. 1 Most workers were also young; 80.3 per
cent of workers were aged 21–35.
Table 1: Age of workers in factories
Age range of workers in years
Worker count
%
18–20
89
9.7
21–25
250
27.2
26–30
237
25.8
31–35
251
27.3
36–40
70
7.6
40+
21
2.3
Most workers (81.6 per cent) lived with their families, 14.9 per cent with friends or co-workers and
the remaining 3.5 per cent in a factory dormitory.
Workers in the sample were fairly well-educated, with 81.1 per cent of workers having completed
junior high and/or high school. Only a tiny fraction (1.0 per cent) had either no formal education or
had attended university.
Table 2: Level of education among factory workers
Level of education
Worker count
%
3
0.3
Elementary school
165
18
Junior High school
402
43.8
High School
342
37.3
6
0.7
No formal education
University
These data show that workers surveyed possessed a high level of education compared to the
Indonesian workforce as a whole. Data from the United Nations Development Programme (UNDP)’s
human development index of the Indonesian population aged 25 or older indicates that 24.2 per
cent of women and 31.1 per cent of men have at least a secondary level of education. Accordingly,
Indonesia fares poorly compared to its regional peers on the UNDP Human Development Report’s
Education Index. 2 The country ranks lower than Malaysia, the Philippines and Singapore, as well as
the average rank of East Asian and Pacific countries. 3
1
Kuncoro (2011)
This index is a weighted average of the adult literacy rate and the combined primary, secondary and tertiary
gross enrolment ratios.
3
United Nations Human Development Report (2011)
2
Page 2 of 38
Another indication of above-average level of human capital in factories participating in this study is
the finding that a considerable percentage of workers had prior work experience (see Table 3).
Table 3: Employment history of factory workers
Workers’ previous workplace
Another garment factory in Indonesia
Worker count
%
416
45.8
Another garment factory outside Indonesia
15
1.7
Another business in Indonesia
34
3.7
1
0.1
10
1.1
Another business outside Indonesia
Family farm
Household enterprise (not a farm)
25
2.8
Doing chores at home
101
11.1
None, this is my first job
262
28.8
45
5
None
Workers’ relatively high level of education and work experience could be explained by advances in
human resource (HR) management among garment factories in this study. As shown in the following
sections of the study, such as the extensive use of pay incentives in Section 3.3, HR management
practices at garment factories in Indonesia include multi-dimensional pay. Indeed, a US Agency for
International Development (USAID) study of HR management practices at garment, footwear and
furniture factories in Indonesia showed that a number of buyers required their suppliers to formalize
their recruitment methods by maintaining personnel records and performing medical and document
checks, such as age verification. 4 It is possible that factories intentionally hired educated and
experienced workers believing that they were more likely to respond to training. This reflects efforts
to create more strategic and value-added HR systems.
As expected given the transient nature of production-level factory work, the length of time a typical
worker spent working at their current workplace was one year or less (40.4 per cent) or two years or
less (50.6 per cent).
Table 4 provides a breakdown of workers’ roles inside the factories.
Table 4: Breakdown of workers’ roles within their factory
Worker’s role within factory
Worker count
%
468
51.4
55
6
Spreader
4
0.4
Checker
19
2.1
Sewing operator
Cutter
Mechanic
3
0.3
Packer
34
3.7
Quality Control
88
9.7
6
0.7
Supervisor
Helper
88
9.7
Other
145
15.9
4
Lake (2008)
Page 3 of 38
2.2 Family and household composition
A significant percentage of workers were parents: 38.3 per cent reported having at least one son and
38.6 at least one daughter.
Conversely, a different study of female labour force participation in Indonesia found that women
often worked at garment factories during the period between graduating from school and getting
married, and did not regard this work as part of a life-long career. Many left the industry after
getting married and having children, owing to household duties and insufficient support for childcare
and household management. 5
5
Chatani (2012)
Page 4 of 38
Section 3: At the workplace
This section outlines workers’ perception of their lives within the factory, including their concerns
regarding OSH, hours, compensation, workplace systems, training, and respect and welfare.
3.1 Occupational safety and health (OSH)
OSH issues are of significant concern for all Indonesian work sectors, as indicated by the number of
violations of Indonesia’s Keselamatan dan Kesehatan Kerja (K3), or OSH, regulations uncovered by
the Indonesian MoMT. Minister Muhaimin Iskandar cited that in 2011, 3,848 companies violated the
K3 regulations, 7,468 companies received verbal warnings and 1,472 companies received strong
warning letters.
In addition, there is a high incidence of work accidents in a wide variety of Indonesian workplaces.
There were 98,711 work accidents recorded in 2010 and 48,515 in the first six months of 2011.
These primarily involved being knocked, slashed, and cut by sharp objects; and falls involving
engines, lifting equipment and hand tools. Out of 4,057 companies, 3,517 were given warning letters
by inspectors to improve compliance.
In accordance with these statistics for Indonesian manufacturing industries as a whole, worrying
safety concerns emerged in garment factories surveyed in this baseline study. Such concerns related
to thirst, heat, chemicals, pollution and workplace hazards, among other issues.
Severe thirst was common: 53.5 per cent of workers reported experiencing severe thirst often or
every day. Interestingly, adequate water supply was not cited as a concern for workers; only 17.3 per
cent of respondents reported some degree of dissatisfaction regarding the quality and availability of
drinking water in the factory.
Figure 1: Nature and frequency of ailments affecting factory workers
300
No. of workers
250
200
150
Often
100
Every day
50
0
Severe fatigue
or exhaustion
Stomach Pain
Dizziness
Nature of ailment
Head, Back Neck Severe Thirst
Ache
Workers may have experienced thirst because they did not want to fall behind on reaching their
production quota and were therefore reluctant to stop work to drink water. They might also have
been unaware of the importance of proper hydration.
It is also possible that heat was a significant contributor to workers’ thirst. Only about half (52.4 per
cent) of respondents reported that temperature control in their factory was not a concern. Concerns
Page 5 of 38
were sufficiently intense that 23.6 per cent of workers had complained to their supervisor or
manager about the issue, 9.4 per cent had raised it with their trade union representative, and
another 1.4 per cent had considered resigning or striking over it.
Table 5: Level of concern among workers regarding temperature control in factories
Level of worker concern over excessive heat
Worker count
%
251
52.4
63
13.2
113
23.6
45
9.4
Considered resigning
4
0.8
Threatened a strike
1
0.2
Mounted a strike
2
0.4
Not a concern
Discussed with co-workers
Discussed w/ supervisor or manager
Discussed with trade union representative
Reasons behind unbearable heat in factories could include poor ventilation owing to inadequate
heat extraction systems and air conditioning on the work floor. There are, however, guidelines
issued by the MoMT against excessive heat in the workplace. According to these guidelines, the
“hold” temperature should be comfortable, and employers are obliged to prevent and control the
extent of rising or spreading heat or humidity. Factory temperature should be capped to 30 degrees
centigrade for light work, 26.7 for average work, and 25 for heavy work. 6 The workplace should also
7
have sufficient artificial and/or natural ventilation.
It is possible that some concerns over health and safety could be attributed to a lack of facilities such
as toilets and water in some factories. If a worker were unable to use the toilet or drink water as
necessary, this could lead to stomach aches, headaches and other ailments.
Table 6: Non-medical facilities available at factories, according to workers
Type of facility available
Worker count
%
Eating area
517
56.3
Food
216
23.5
Water
580
63.2
73
8
571
62.2
Dormitory
Toilet
Workers were generally satisfied with facilities at their factory. Nearly half (47.2 per cent)
considered food in the canteen as fair or better. Most workers (71.9 per cent) were satisfied or very
satisfied with the toilet facilities, and 82.7 per cent were satisfied or very satisfied with the quality
and availability of drinking water. However, workers also expressed a high level of concern over
workplace hazards and accidents, as shown in Table 7.
6
Work Safety Act No. 1 of 1970, Art. 3; Minister of Manpower Decree No.KEP.51/MEN/1999, Appendix I; Minister of Health
Decree No.1405/MENKES/SK/XI/2002, Appendix 2, Section III.
7
Work Safety Act No.1 of 1970, Art. 3; Minister of Manpower Regulation No. 7 of 1964, Art. 5(4); Minister of Health Decree
No. 1405/MENKES/SK/XI/2002,Appendix 2.
Appendix 2.
Page 6 of 38
Table 7: Level of concern among factory workers regarding occupational safety
Level of concern
Not a concern
Discussed with co-workers
Discussed with supervisor or manager
Discussed with trade union representative
Considered resigning
Threatened a strike
Mounted a strike
Dangerous equipment or
machinery
Worker
%
count
Accidents or injuries
Worker
count
%
40
40.8
125
27.3
7
7.1
54
11.8
39
39.8
194
42.4
9
9.2
79
17.2
2
2
5
1.1
–
–
1
0.2
1
1
–
–
– = nil
Workplace hazards had resulted in injury for a significant number of workers, with 26 per cent of
workers reporting that they had been injured at least once (see Table 8).
Table 8: Frequency with which workers experience injury at their factory
Frequency with which workers experience injury
Worker count
%
Never
667
73.6
Rarely
107
11.8
Occasionally
129
14.2
3
0.3
Often
Almost all the workers (97.1 per cent) reported that a clinic was available at the workplace.
However, the range of health services available in these factories varied. Many workers (37.1–47.6
per cent), reported that they had access to common services such as treatment for workplace injury,
headaches, fatigue, general illness and regular check-ups, but fewer workers cited other types of
care as available.
In total, 239 workers reported having been injured, and 205 workers reported having received care
for an injury in their factory clinic. It seems, therefore, that most injured workers were treated in
factory clinics.
On the basis of Figure 2, it appears that, for 7 out of 9 health issues, the health services available in
factory clinics exceeded the care that was actually received for those issues. It would seem therefore
that workers are not using their clinics to the full, and it would be interesting to know why that is.
This should be studied further in future baseline data research. It might be because workers do not
have time to seek help for medical issues; there might be a cultural factor involved; or it might be
that workers mistakenly believe that certain services are available to them when in fact they are not.
Page 7 of 38
No. of workers
Figure 2: Health services available at factories, against use of such services by workers
500
450
400
350
300
250
200
150
100
50
0
Services available*
Care actually received*
Type of health care
*As reported by workers.
Workers were also concerned over their working environment: 64.3 per cent reported concerns with
dusty or polluted air and 68.9 per cent with bad chemical smells. These concerns might be linked to
the lack of proper ventilation in some factories, as indicated by the high level of concern regarding
excessive heat. In addition, in certain cases, workers who are given protective masks may neglect to
wear them owing to high temperatures. Another survey on the garment sector in Indonesia found
that although workers commonly received personal protective equipment (PPE) in the form of
masks, earmuffs, and protective shoes, they often did not use this equipment; it made them feel
uncomfortable; was out of date; and/or they did not know how to use it. 8
A low level of noise is also an important aspect of a comfortable work environment. The majority of
workers indicated that they were concerned about noise levels in their factory. Nearly half (45.1 per
cent) were bothered by noise at work sometimes or a lot, and 23.3 per cent reported that the noise
level was sufficiently loud that they had to shout to be heard by someone nearby, sometimes or
often.
Better Work Indonesia, stakeholders, and buyers should pay close attention to PT JAMSOSTEK, the
social security insurance scheme under which all workers and their families must be covered and
under which workers are entitled to monetary compensation as a substitution for lost earnings as a
result of accident, illness, pregnancy, old age and death. 9 In the future, baseline data should also be
collected on JAMSOSTEK and its pervasiveness throughout the Indonesian garment worker
population, as this is an important part of dealing with work-related stress and injury. In addition, it
is worth noting that workers on both permanent and non-permanent contracts are entitled to
JAMSOSTEK benefits, according to recent amendments to the Indonesian constitution. Better Work
Indonesia and stakeholders should therefore monitor the contract status of workers and whether or
not they are receiving JAMSOSTEK benefits for which they are eligible. A case study examining
JAMSOSTEK benefits, however, found that some Indonesian garment factories subscribe to other
8
Local Initiative for OSH Network (LION) Indonesia (2010)
Manpower Act No. 13 of 2004, Art. 99–100; Labour Social Security Act 3 of 1992, Art. 1, 3, 17–19, 22; Minister
of Manpower Regulation No. PER-01/MEN/1998, Art. 1–13; MoMT Cirular No. SE.356/MEN/PHI-PJSK/IX/2008;
Director-General of Manpower Management and Monitoring Decision No. KEP.338/BW/98.
9
Page 8 of 38
health care systems rather than the national healthcare mandate. The management of the factories
concerned believed that private health care schemes were more efficient, and that international
buyers preferred these schemes for their quality services. Medical benefits were the same, but
dependents could not receive benefits if they lived in remote areas. Some private schemes also used
a pay-per-use employee reimbursement system, under which the employer reimburses worker or
family members for medical care. There are advantages and disadvantages for workers depending
on the type of scheme, and further research should be done on health care systems, and the extent
to which choice of health care system could affect the impact of injuries and other ailments on
workers’ lives. 10
3.2 Hours and rest days
Baseline data collected regarding hours and rest days showed that many workers might have worked
more hours than the local standard of 40 weekly working hours. 11
On average, 80 per cent of workers reported that on Monday to Friday, they began work between 7
a.m. and 7.30 a.m., and 90 per cent reported that they finished work some time between 3.30 and 6
p.m. However, an average of 2.7 per cent of workers reported that between Monday and Thursday
they did not leave the factory until 8 p.m.
A significant proportion of workers were found to work on Saturdays (36.8 per cent), with 33.9 per
cent of workers reporting that they began work between 7 a.m. and 8 a.m. and 28.4 per cent of
workers that they left work between 12 p.m. and 2 p.m.
However, if workers were truly leaving the factory by 6 p.m. on a normal work day, they would not
be stopping work for dinner. Only 31.8 per cent of respondents reported that they did not eat dinner
at the factory. By contrast, 68.2 per cent ate dinner at the factory. Thirty-two per cent reported
stopping work for 30 minutes and 12.2 per cent for one hour.
According to Indonesian labour law, employers are required to provide at least a half hour of rest for
every four hours worked that is not counted as work time. It is acceptable to provide breaks after
more than four hours of work to accommodate lunch and prayer when this is agreed to in writing
with workers. To workers who work overtime for three or more hours, employers must provide
adequate time for rest and a meal break in addition to water and nutritious food of at least 1,400
calories.12
If, in fact, workers are working into the evening, then further research will be required to find out
what workers really think about overtime and whether this overtime is voluntary, given the high
number of workers (78.6 per cent) who claimed that overtime was not a concern at their factory.
That said, 5.7 per cent of workers reported discussing the issue of excess overtime with co-workers,
11.0 had raised the issue with their supervisor or manager, and 4.2 per cent had raised it with their
trade union representative (see Table 9).
10
Dharana (2012)
Manpower Act No. 13 of 2003, Art. 77.
12
Manpower Act No. 13 of 2003, Art. 79.MoMT Decree No. KEP.102/MEN/VI/2004, ARTS. 3, 7
11
Page 9 of 38
Table 9: Level of concern among factory workers over working hours
Level of worker concern over working hours
Too much overtime
Too much work on Sundays
Worker count
%
Worker count
%
620
78.6
345
56.2
Yes, discussed with co-workers
45
5.7
69
11.2
Yes, discussed w/ supervisor or manager
87
11
129
21
Yes, discussed with trade union representative
33
4.2
53
8.6
Yes, considered resigning
3
0.4
7
1.1
Yes, threatened a strike
1
0.1
2
0.3
Yes, mounted a strike
–
–
9
1.5
No, not a concern
– = nil
It appears that overtime is a common practice in all work sectors in Indonesia. Almost three-quarters
of regular employees and half of all casual employees worked more than 40 hours per week in 2010.
One-third of the total number of employed people worked overtime in 2010. In West Java and
Jakarta, where the factories surveyed in this study are located, 37.2 per cent and 48.4 per cent of all
employees worked more than 48 hours per week. 13
In the Indonesian workforce as a whole, it appears that women work fewer hours’ overtime than
men, perhaps owing to family obligations. In 2010, 77.6 per cent of male and 66.8 per cent of female
regular employees worked more than 40 hours per week, while 59.1 per cent of male and 26.8 per
cent of female casual employees worked more than 40 hours per week. 14 These numbers, however,
represent a large cross-section of the Indonesian work force, covering a range of incomes.
Presumably, many of these women could afford to choose not to work overtime and could live solely
off the regular wages that they earned.
Indonesian law states that both the worker and their employer must agree in writing to work
overtime, and that the agreement must include the name of the worker and the amount of hours to
be performed. Overtime must not be coerced or made necessary in order to earn the minimum
wage, and should not exceed three hours per day or 14 hours per week. 15
The baseline data revealed potential irregularities in relation to the signing of the written overtime
agreement. Though the agreement should be signed by the supervisor and the worker, proper
procedure occured in only 17.6 per cent of cases, while 62.3 per cent of workers reported that they
signed the agreement themselves (see Figure 3). In some cases the overtime agreement was signed
by the supervisor (8.7 per cent) or other factory manager (4.6 per cent). Compliance assessments
will look into this issue in more depth and devise solutions by working with managers and workers.
13
ILO (2010)
ibid.
15
Manpower Act No. 13 of 2003, Art. 78, 85; MoMT Decree No. KEP.102/MEN/VI/2004, Art. 3, 4, 6;
KEPMEN No. 102 TH 2004, Art No. 6.
14
Page 10 of 38
Figure 3: Procedure for signing overtime agreements in factories, as reported by workers
Usual signatory(ies)
Supervisor and worker
Other factory manager
Worker's supervisor
Worker
Unknown
0
100
200
300
400
500
600
700
No. of workers
3.3 Compensation
Workers showed great concern regarding their wages. These concerns related to payment of wages
(71.5 per cent), excess pay deductions (84.1 per cent), in-kind compensation (45.6 per cent), low
wages (83.2 per cent), confusion about the piece-rate (58.3 per cent) and broken punch clocks (76.8
per cent). Workers consistently raised their concerns with management staff and trade union
representatives. Resigning and striking were much less common responses.
Figure 4: Concern among factory workers regarding pay practices
Broken punch clock
Yes, discussed with coworkers
Nature of concern
Confusion about piecerate
Yes, discussed w/
supervisor or manager
Low wages
Yes, discussed with trade
union representative
In-kind
Yes, considered quitting
Deductions
Yes, threatened a strike
Late payment
Yes, mounted a strike
0
100 200 300 400 500
No. of workers
Page 11 of 38
The concerns over wages highlighted in these baseline data are consistent with findings from the
rest of the manufacturing industries in Indonesia. Wages in Indonesia are very low. Factory workers
in Indonesia make between US$100 and US$200 per month. By comparison, workers in China earn
just over US$300 per month, followed by Malaysia (US$298), India (US$269) and Thailand (US$263).
Compensation is a point of contention between the Indonesian employers’ association, APINDO, and
workers. APINDO claims that the low wage is necessary to attract new businesses and foreign
investment into Indonesia.16
Some economists, however, believe that it is becoming increasingly difficult to live on the Indonesian
minimum wages because inflation, especially of food prices, is exceeding wage increases. Workers,
therefore, are struggling to pay for basic necessities. According to the Central Statistics Agency, food
prices rose by nearly 16 per cent in 2010, while the wages of factory workers grew by less than seven
per cent. 17
In Indonesia, there also seems to be a connection between precarious contract work and low wages.
The ILO’s Decent Work Country Profile reports that the percentage of casual employees whose
monthly earnings are less than two-thirds of median earnings has increased in the past 15 years. The
average rate of real wage growth was also found to be lower for casual employees (1.1 per cent)
than for regular employees (3.8 per cent). In 2010, casual employees earned only two-fifths of the
amount of the average real wages earned by regular employees. 18 Perhaps, therefore, the reason
why the workers surveyed had so many concerns over wages was because many of them were
precarious contract workers.
The baseline data collected also revealed pay practices related to the HR management of factories,
such as a unique use of pay incentives. In Indonesian garment factories, pay incentives related to
work effort are based on whether the worker or production line completes the production target
before the end of the work day rather than on piece-rate pay. Around 79 per cent of workers
reported that none of their pay was determined by piece-rate.
Instead, it appears more common for factory managers to set a production quota for each worker or
line of workers: 83.8 per cent of workers cited that they had a daily production quota, while 15.1 per
cent reported that they did not have a target. In most cases, the production target was set daily.
Positive incentives, in the form of bonuses, and negative incentives, in the form of deductions, were
also used to incentivize work effort. Of the respondents, 20.9 per cent reported that they always
received a bonus, and an additional 23.1 reported that they sometimes received a bonus when the
daily production target was filled. Bonuses that reward attendance, productivity and long service are
often instrumental in making factories more productive by raising productivity, reducing staff
turnover and increasing the benefits of worker training. The various reasons for which workers
reported receiving bonuses are outlined in Figure 6.
16
Dipa and Dewi (2012)
Chatani (2012)
18
ILO (2010)
17
Page 12 of 38
Figure 5: Reasons for the award of bonuses, as reported by factory workers
300
No. of workers
250
200
150
100
50
0
Reason for award of bonus
Negative incentives were less common. Factories in the sample focused principally on deductions for
absences (67.9 per cent) and, to a lesser degree, tardiness (7.2 per cent).
However, factories that reward output may inadvertently create incentives to reduce the effort
workers put into production quality. One strategy used to offset perverse incentives is to require
that workers correct their own defects, as experienced by 69.3 per cent of workers. Most workers
(93.5 per cent) reported spending one hour or less per day making corrections. For such an incentive
scheme to be effective, time spent on repairs must be remunerated at a lower rate than regular
work. Nevertheless, a majority of workers (60.5 per cent) reported performing this task as part of
their regular work day. Only 17.9 per cent repaired defects during scheduled breaks; 14.2 per cent
remained after the end of the working day; and 7.4 per cent corrected errors during the overtime
shift.
It therefore appears that workers are rectifying their errors during the regular work day,
remunerated at the same rate as for other work. This shows that factory management prioritizes
positive incentives over negative ones, and does not offset positive incentives by paying workers less
when they have to correct their own mistakes.
Indeed, after the financial crisis, a survey carried out by USAID showed that the management of
factories across footwear, garment and manufacturing industries were satisfactory at paying
minimum wage and often supplemented wages with a performance bonus. It found that rewards for
reaching targets went up to 10–35 per cent of a workers’ total take-home pay. 19
Considering the positive use of pay incentives, the pay stub that factories issue to workers does not
seem sophisticated. Most workers (95.5 per cent) reported receiving a pay slip. Information on the
pay statement included the date (according to 75.4 per cent of respondents), ID number (68.0 per
cent), regular hours (65.7 per cent), overtime hours (71.0 per cent) and wage rate (69.5 per cent).
Information about union dues (22.4 per cent), bonuses (31.3 per cent) and deductions (15.0 per
cent) was less common. Very few workers reported receiving information about their piece-rate (3.6
per cent) or pieces completed (0.4 per cent). (See Figure 7.)
19
Lake (2008)
Page 13 of 38
Figure 6: Information included on pay slips, as reported by factory workers
800
700
No. of workers
600
500
400
300
200
100
0
Type of information on pay slip
3.4 Workplace systems and relations
Baseline data indicated that the garment factories surveyed demonstrated rigid factory structures,
seemingly vigorous exercise of union membership and collective bargaining, and a high percentage
of non-permanent contracted work.
Factory structure appeared rigid because 91.5 per cent of workers reported that they had never
been promoted, possibly a consequence of short duration of employment. However, 50 per cent of
workers had been at their current job for more than two years, meaning that at least 40 per cent of
workers had been in their current position for over two years without a promotion. Worker
perceptions on barriers to promotion are detailed in Table 10.
Table 10: Barriers to promotion in factories, as perceived by workers
Barrier to promotion
Prefer not to answer
Worker count
%
63
6.9
122
13.3
Being a woman
14
1.5
Age
21
2.3
Education
Do not know the answer
65
7.1
Religion
2
0.2
Ethnic minority
1
0.1
Family responsibilities
6
0.7
181
19.7
3
0.3
93
10.1
8
0.9
1
0.1
349
38
Skill
Relationship with supervisor
Lack of opportunity
Union activities
Political views
None
Page 14 of 38
Another reason for lack of promotion might be insufficient training. The ILO-Akatiga survey found
that only supervisors or technical managers received leadership training from the company. Most
companies used on-the-job training for workers instead. Accordingly, workers felt that the skills they
acquired throughout their employment were only partial. For example, workers assigned to sew
sleeves would not be able to sew any other part of clothing. The only exception was for workers in
the sampling division, who were required to make entire pieces of clothing. Most workers,
therefore, only acquired a basic and limited set of skills during their tenure at factories, no matter
how long their duration of employment. This could have been the reason they had not been
promoted. 20
It is therefore possible that a combination of low skill and lack of training led to the low incidence of
promotions found in this baseline study. These factors are in addition to the inherently prohibitive
flat structure of factories, in which most workers at the bottom rung of the hierarchy find it difficult
to climb the steep slope to promotion.
Despite the lack of promotions, rights to freedom of association and collective bargaining were
vigorously exercised in factories participating in this baseline study. As seen in other sections,
workers often raised their concerns with their trade union representative. Around 65 per cent
reported being a trade union member and a slight majority, 51 per cent, reported being represented
by a collective bargaining agreement.
Today there are many trade unions operating in Indonesia. Under the 32-year Suharto regime, only
one official workers’ confederation was recognized. However, the Trade Union Act of 2000 gave
workers the right to organize into “free, open, independent, democratic and responsible” trade
unions and federations and confederations of trade unions.21 Consequently there are now four
confederations and 11,000 workplace unions. 22 According to Freedom House, Indonesia performs
well compared to Malaysia, Singapore and Philippines in providing freedom of expression and
freedom of association for its citizens and is above the regional average in Freedom House's Civil
Liberties and Political Rights Index. 23
It seems, however, that unions in Indonesia face problems with organizing, governing and navigating
the national labour court system. 24 In addition, the abundance of unions and federations leads them
to compete against one another. Divisions within sizable unions are frequent, such as the split
between the garment union TSK into TSK Kalibata and TSK Pasar Minggu.
The increase in the use of precarious workers is also a challenge for unions, since most union
members are permanent workers. The unions see the trend of factories hiring non-permanent
contract employees as a threat, since workers may not organize into unions if they are on precarious
contracts, fearing that their contract will not be renewed. 25
In addition, on an enterprise level, the American Center for International Labour Solidarity reports
that there is considerable anti-union discrimination by employers. Often, they argue, employers
form yellow unions to undercut employers’ unions, refuse to recognize unions, terminate union
20
Buckley and Mwamadzingo (2012) p. 45–7
Trade Union Act No. 21 of 2000, Art. 1, 13, 18, 25.
22
The Brunei Times (2012)
23
Freedom House (2012)
24
Caraway (2010)
25
Reerink (2006)
21
Page 15 of 38
officers and fire charges against union activists. 26 Another obstacle to union activity is that these
unions are up against only one employers’ association, APINDO, which makes social dialogue
difficult. 27 It is possible that the above reasons led any workers surveyed in this baseline study who
were not members of a union to exhibit some concern over the consequence union membership
might have on their job tenure. For example, 8.4 per cent of workers reported that it was likely that
union membership would cost them their job, and another 16.7 per cent believed that they might be
dismissed for taking out union membership. A small proportion (1.2 per cent) reported having been
punished for their union activities.
Despite the apparent weaknesses of unions and collective bargaining rights in Indonesia, efforts are
already under way aimed at strengthening these rights. In June 2011, Indonesian textile, clothing
and footwear unions such as Gabungan Serikat Buruh Indonesia (GSBI), Garteks, Kongres Aliansi
Serikat Buruh Indonesia (KASBI), Serikat Pekerja Tekstil, Sandang and Kulit (SPTSPK), major supplier
factories, and major sportswear brands such as Adidas, Nike and Puma signed a pact to ensure that
brands and factories respected freedom of association. 28
Finally, a theme affecting many indicators studied in this baseline report is workers’ contracts. A
large majority of workers (80.1 per cent) reported signing a contract and 97.9 per cent of those
workers reported that the contract was in Bahasa Indonesia, a language they could understand.
Table 11 provides a breakdown of various types of worker contract, while Figure 7 compares the
proportion of non-permanent and permanent workers in the factories.
Table 11: Types of contract on which factory workers are employed
Type of contract
Worker count
%
45
5.9
8
1.0
Home worker
11
1.4
Subcontractor
79
10.3
Bonded
18
2.3
Probationary
67
8.7
7
0.9
Fixed duration
318
41.5
Unlimited duration
213
27.8
Training
Apprentice
Temporary
26
Caraway (2010)
Reerink (2006)
28
International Trade Union Confederation (2011)
27
Page 16 of 38
Figure 7: Number of non-permanent and permanent workers at Better Work factories
600
500
400
300
Non-permanent
Permanent
200
100
0
Firms may have hired workers on non-permanent contracts because Indonesian law imposes high
severance pay and short-term contracts offset this cost. After more than six months of work,
employers are obliged to pay workers one month’s worth of wages; after two years, two months’
wages; after four years, four month’ wages, and so on up to nine months’ pay after 20 years of
service. 29
In addition, it is relatively simple for firms to hire non-permanent workers for a significant period of
time on multiple short-term contracts. The maximum period for a short-term contract in the
garment industry, which is considered “new product work”, is two years. Legally, the initial contract
can be extended once for one year. After the extension, an employer is required to either hire the
worker permanently or let them leave with an allowance. 30 However, if a worker has a period of rest
between contracts, the work period returns to zero and the employer is allowed to hire the worker
again on another short-term contract. 31
Implications for workers on precarious contracts include job insecurity, few training, promotion, or
union involvement opportunities, and limited benefits and social protection rights. 32 Short-term
contract work could explain why workers in this baseline study reported a lack of promotion, as
firms have no incentive to invest in training their temporary workforce. Such contracting and training
practices could harm the long-term competitiveness of the Indonesian garment industry.
Despite the negative implications of non-contract work, Indonesia’s Constitutional Court decision no.
27, passed on 17 January 2012, assures non-permanent contracted workers the same security,
benefits and rights as permanent workers. Employers must now either put all workers on permanent
contracts or include in its agreement with the outsourcing company a “Transfer of Undertaking
(Protection of Employment)” agreement to ensure that the subcontracted worker receives all the
above mentioned benefits. 33
29
http://www.ilo.org/dyn/eplex/termdisplay.severancePay?p_lang=en&p_country=ID&p_all_years=Y
KEPMEN No. 100 of 2004 in section 3, section 8
31
The Ministerial Decision of the Indonesian Minister of Manpower and Transmigration on the implementation
provisions (No. KEP.100/MEN/VI/2004)
32
De Jonghe, Sanyoto and Vanhuyse (2009)
33
Circular of the Director General of Industrial Relations and Labour Social Security, The Ministry of Labour and
Transmigration of the Republic of Indonesia, No. 31 concerning implementation of constitutional court’s
decision No. 27. 20 Jan. 2012.
30
Page 17 of 38
3.5 Training opportunities
It is important to measure staff training as it both represents a company’s investment in human
capital and motivates workers to be more efficient. Workers reported that training was provided on
a range of different topics, and only a small percentage (6.4 per cent) reported receiving no
induction training at all.
Table 12: Induction training received by factory workers
Type of training received
No induction training
Worker count
%
59
6.4
Basic skills
268
29.2
Skills upgrading
183
19.9
Worker rights
257
28
Labour law
204
22.2
Collective bargaining
242
26.4
Safety and health
325
35.4
Safe machine operation
243
26.5
Pay procedures
225
24.5
Benefits
169
18.4
21
2.3
Work hours
270
29.4
Overtime practices
243
26.5
Grievance procedures
164
17.9
Fines
These data are consistent with previous research on the training of workers in manufacturing
industries. The ILO-Akatiga survey found that after initial hiring, workers received a few days of
sewing-skill lessons. Most companies preferred to provide an initial training course and follow an onthe-job training model thereafter. By comparison, supervisors and technical managers received
more expertise and skills training than production workers. Though 97.7 per cent of workers in the
ILO-Akatiga survey perceived that entrepreneurship training was important or very important, no
workers were given this. 34
According to data collected by the World Economic Forum ranking the training practices of
Indonesian businesses, Indonesia ranks poorly compared to its peers when measuring extent of staff
training. On a scale of 1 to 7, 7 being the most invested in training, Indonesia ranked 4.5, lower than
Singapore (5.6) and Malaysia (4.9) but higher than the Philippines (4.4). 35
Even smaller numbers of workers in this baseline study reported receiving training within the past six
months (see Table 13).
34
35
Buckley and Mwamadzingo (2012) pp. 45–7
Schwab and Porter (2008)
Page 18 of 38
Table 13: Training received by factory workers within past six months
Type of training received within last six months
Worker count
%
None
123
13.4
New skills
125
13.6
New equipment
71
7.7
New operations
104
11.3
Worker rights
122
13.3
Collective bargaining
107
11.7
Supervisory skills
27
2.9
Grievance procedures
50
5.4
Safety and health
192
20.9
Safe machine operation
121
13.2
Factory organization
53
5.8
Other training
74
8.1
There may be a link between the high incidence of non-permanent contract workers seen in this
baseline study and the lack of continuous training, as managers are more likely to make human
capital investments in permanent workers. Considering that most workers in this study are on nonpermanent contracts, managers have little incentive to train most workers.
3.6 Respect and welfare
Relationships between workers, management, and supervisors are of great concern to workers. A
high proportion of workers (85.2 per cent) reported concerns over sexual harassment. Moreover,
79.3 per cent were concerned about verbal abuse such as shouting or vulgar language, and 87.4 per
cent with physical abuse such as striking or pushing. Typically, 30 per cent of workers had discussed
their concerns with a supervisor or manager, and another 30 per cent had raised concerns with their
trade union representative. Another 10 per cent of workers had considered resigning.
Table 14: Workers’ concerns regarding sexual harassment and verbal and physical abuse in factories
Level of worker concern regarding sexual
harassment and verbal and
physical abuse
Sexual
harassment
Physical abuse
(e.g. striking,
pushing)
Worker
%
count
46 12.6
Worker
count
54
14.8
37
10.1
92
21.6
43
11.8
Discussed with supervisor or manager
117
32.1
122
28.6
111
30.4
Discussed with trade union representative
110
30.1
93
21.8
114
31.2
Considered resigning
32
8.8
27
6.3
40
11
Threatened a strike
4
1.1
1
0.2
2
0.5
Not a concern
Discussed with co-workers
Mounted a strike
Total
%
Verbal abuse
(e.g. shouting,
vulgar language)
Worker
%
count
88
20.7
11
3
3
0.7
9
2.5
365
100
426
100
365
100
Furthermore, there are few repercussions for such behaviour, according to Indonesian Criminal
Code. Although there are provisions in Indonesian Criminal Code on crimes against decency, it does
not specifically mention the term “sexual harassment.” Article 281 of this code can be used as the
Page 19 of 38
basis for filing a complaint about sexual harassment, which may result in a short term of
imprisonment or fine for “any person who deliberately intends to publicly offend against decency.” 36
However, there is a basis for a worker’s grievance against sexual harassment. According to Article
1365 of Indonesian Civil Code, if unlawful action has caused aggrieved losses to the worker, he or
she may claim damages. The worker has the right to resign if the company endangers his or her life,
safety, health or morale. According to the MoMT, work that exposes employees to sexual
harassment can be deemed as dangerous work. 37
The Indonesian government, with the support of the ILO, has issued guidelines on sexual harassment
through a government circular. These guidelines outline forms of, means of preventing and
mechanisms for responding to, sexual harassment. 38
The ILO Committee of Experts on the Application of Conventions and Recommendations (CEACR) has
emphasized that sexual harassment is a form of sex discrimination and should be addressed within
the requirements of the Discrimination (Employment and Occupation) Convention, 1958 (No. 111).
Sexual harassment undermines equality at work by calling into question the integrity, dignity and
well-being of workers. The productivity of firms is also impaired as sexual harassment weakens the
basis upon which work relationships are built (“General observation on Convention No. 111”). It is
therefore imperative to create awareness around the issue and devise creative ways to encourage
companies to follow guidelines.
It is worth noting that the issue of sexual harassment requires closer study to understand the
particular nature of sexual harassment in the Indonesian garment industry. Better Work Indonesia
will be working on this through factory assessments and capacity-building measures.
Even if a person wishes to report cases of sexual violence, social and cultural norms and structural
problems such as ineffective complaint procedures may prevent them from doing so. Women’s
organizations designed to respond to complaints also experience challenges. For example, the
Indonesian National Commission on Violence Against Women may only conduct investigations to
recommend state institutions to take further action. 39 This structural challenge could prevent a
victim from reporting events, taking remedial action and taking perpetrators to court.
High levels of sexual harassment may be related to Indonesian hierarchal customs in the workplace.
According to research into Indonesian HR management, Indonesian culture rates highly in terms of
power distance, collectivism and uncertainty avoidance, these being potential obstacles to healthy
relationships between management staff and workers in the workplace. 40 These cultural
characteristics present challenges in training of management and equity of workers. 41
Workers also reported that verbal and physical abuse were problems in factories. Around 79 per
cent of workers reported that verbal abuse was a problem in garment factories, and 87.4 per cent of
workers reported physical abuse. These are high numbers, and further research into these issues is
recommended, especially through assessments.
36
Indonesia. Directorate General of Law and Legislation, Ministry of Justice. Penal Code of Indonesia. Jakarta:
ed. 1999. http://www.humanrights.asia/countries/indonesia/laws/legislation/PenalCode.pdf [19 June 2012].
37
Baker & McKenzie International (2009)
38
ILO and MoMT (2011)
39
Asian Human Rights Commission (2011)
40
Stening and Ngan (1997) pp. 3–15
41
Bennington and Habir (2003) pp. 373–92
Page 20 of 38
The practice of correcting workers in a disrespectful way was also found to threaten the work
environment (see Table 15). Only 59.4 per cent of workers felt that their supervisor corrected their
mistakes with fairness and respect, while 32.4 per cent reported that respectful supervision occurred
only sometimes. Another 8.2 per cent felt that respectful corrections were a rare occurrence.
Table 15: Fairness and respect shown to workers by supervisors in factories, as perceived by workers
Fairness and respect shown by supervisors when correcting workers
Worker count
%
All of the time
48
28.2
Most of the time
53
31.2
Sometimes
55
32.4
Rarely
14
8.2
According to workers, common causes of such disrespect from supervisors included making a
mistake (9.4 per cent of respondents) and missing work (8.0 per cent). However, the most commonly
perceived cause, cited by 36.7 per cent of respondents, was “none”. (See Table 16)
Table 16: Causes of disciplinary action in factories, as perceived by workers
Causes of disciplinary action in factories
Worker count
%
Refusing to work overtime
17
2.1
Making a mistake
76
9.4
Missing work
65
8
Speaking while at work
23
2.8
Falling asleep
26
3.2
Participating in a strike
10
1.2
3
0.4
20
2.5
298
36.7
Falling pregnant
Complaining about the production target
None
Table 17 lists the various forms of disciplinary action taken by supervisors, as reported by
respondents, including shouting (cited by 19.3 per cent), insulting language (11.2 per cent) and
vulgar language (5.3 per cent).
Table 17: Types of disciplinary action taken by supervisors in factories, as reported by workers
Type of disciplinary action
Worker count
%
Shouting
177
19.3
Using insulting language
103
11.2
49
5.3
Slapping
1
0.1
Striking (using stick/belt/whip)
1
0.1
Striking (using material)
1
0.1
Withholding of wages
7
0.8
13
1.4
7
0.8
65
7.1
Using vulgar language
Requiring worker to work extra hours
Requiring worker to work through lunch
Other
Page 21 of 38
It would appear, however, that workers viewed disrespectful and abusive behaviour as acceptable
according to the rules of the factory. Almost all workers (98.7 per cent) considered that supervisors
were fair or better at following the rules of the factory (see Table 18). This seemingly counterintuitive finding requires more study.
Table 18: Adherence to factory rules by supervisors, as perceived by factory workers
Supervisor adherence to factory rules, as perceived by workers
Worker count
%
Excellent
103
15.4
Very good
117
17.5
Good
246
36.8
Fair
194
29
8
1.2
Poor
This seemingly hostile work environment for Indonesian garment workers might be related to a lack
of social justice and social inclusion of women in Indonesian work environments in general.
Indonesia scored low–medium on the gender equality index, a composite measure reflecting
inequality in achievements between women and men in reproductive health, empowerment and the
labour market. Between 1995 and 2011 this number has decreased, with the result that Indonesia is
currently ranked 100 out of 132. 42
42
UNDP (2011)
Page 22 of 38
Section 4: Beyond the workplace
This section highlights factors that affect workers’ lives outside the workplace, including their
children and degree of financial independence and life satisfaction. In addition, specific to Better
Work Indonesia, workers were asked about their use of radio, television, mobile phones, the
internet and social media, to aid the development of new programme innovations aimed at better
communicating information to workers.
4.1 Children of workers
A significant minority of workers cited that they were parents: 38.3 per cent reported having one or
more sons, and 38.6 per cent one or more daughters.
For Better Work, one indicator of a human development case relates to the impact that monitoring
of work hours and wages has on school attendance by children. Most school-aged children of
participants in this study were found to be attending school. However, 3.2 per cent of sons and 3.4
per cent of daughters were not in school for financial reasons.
Table 19: Education among dependents of factory workers
Education of factory workers’ dependents
My school-age children are in school
Sons
Daughters
Worker count
%
Worker count
%
266
76.7
265
75.1
I cannot afford to send all of my children to school
11
3.2
12
3.4
There are other reasons why my children are not in school
70
20.2
76
21.5
This finding is significant, as it indicates that workers who are also parents are earning enough to
send their children to school and thereby reflects Indonesia’s progress toward universal primary
education. Currently in Indonesia, 94 per cent of children aged 7–12 are enrolled in primary school.
However, according to UNICEF, a key challenge is getting children from primary school to secondary
school. Almost half of children from poor families do not enrol in junior secondary school. Many
discontinue their studies after completing their primary education in order to enter the workforce.43
4.2 Financial independence
Ultimately, Better Work seeks to improve the lives of workers. Important considerations are
whether work is helping families to pay off debt, keep children in school or realize other life
aspirations. Most workers reported that they sent money to parents or family members. Nearly half
(47.2 per cent) made family contributions regularly, while 35.3 per cent made such contributions
occasionally. A significant proportion (82.5 per cent) of workers, therefore, made contributions to
their family’s wealth.
Table 20: Remittances to family members by factory workers
Frequency of remittances to family members
Worker count
%
Regularly
143
47.2
Occasionally
107
35.3
24
7.9
Rarely
43
UNICEF Indonesia 2009.
Page 23 of 38
Frequency of remittances to family members
Worker count
%
7
2.3
22
7.3
Very rarely
Never
As 81.6 per cent of workers reported that they lived with their families, many of them would not be
considered remittance-giving migrant workers under commonly used definitions. However, since
they are nevertheless giving money to their families, Better Work considers their contributions as
remittances for the purpose of discussion of the country context.
Remittances are a substantial source of capital that can bring about poverty alleviation through
economic development. In Indonesia, for example, the amount of remittances from abroad is larger
than the revenues of some local governments.44 These and other data, however, come from
households that are receiving remittances from outside Indonesia, which account for 1.6 per cent of
Indonesia’s GDP. More research is required on inter-country and inter-province remittances before
firm conclusions can be drawn. 45
Although the baseline data showed that migrant workers in Indonesia gave money back to their
families for useful purposes, 49 per cent of workers also reported that they needed and received
financial help from family members. This figure is high given the familiar characterization of garment
work as a strategy through which families can climb out of poverty through industrialization, and is
also counter-intuitive considering the high percentage of workers who send remittances. This finding
might be explained by demographic or seasonal factors affecting the time frame in which workers
send and receive money, and needs to be further investigated.
Table 21: Financial help received by factory workers from their families
Frequency with which worker receives financial help from family members
Worker count
%
19
3.4
142
25.4
Rarely
78
13.9
Very rarely
35
6.3
286
51.1
Regularly
Occasionally
Never
Since 2006, workers’ wages in Indonesia have not kept up with rising food prices, reducing the
purchasing power of workers. 46 The fact that workers’ wages are barely sufficient to cover their
basic living expenses may have led some to seek financial help from their families.
4.3 Life satisfaction
The baseline data also measured indicators of well-being among workers through questions on
general life satisfaction. For example, given the rigours of factory work, it is possible that workers
may develop mental health concerns. Though few workers reported experiencing symptoms of
depression most of the time, many reported symptoms of depression some of the time, including
feeling restless (29.1 per cent), fearful (15.8 per cent), sad (22.0 per cent), tearful (15.0 per cent) and
hopeless about the future (20.4 per cent).
44
International Fund for Agricultural Development (2007)
World Bank (2011)
46
Chatani (2012)
45
Page 24 of 38
Figure 8: Symptoms of anxiety and distress experienced by factory workers
60
% of workers
50
40
30
Not at all
A little of the time
20
Some of the time
10
0
Feeling
Restless
Feeling Fearful
Feeling Sad
Crying Easily
Symptom of anxiety/distress
Feeling
Hopeless about
the Future
These numbers are not insignificant, and can be connected to workers’ concerns regarding sexual
harassment and physical and verbal abuse as highlighted in Section 3.6.
The symptoms experienced by workers could also be related to the high incidence of short-term
contract and outsourced labour in Indonesian garment factories (see Section 2.4). Such workers
have limited access to social protection, are less likely to be union members, and are at a higher risk
of dismissal or unemployment. Being in such a precarious position could make workers restless,
fearful, sad or hopeless. 47 This is an important area for further research.
4.4 Communication
To assist the development of new worker communication programmes using contemporary social
media, workers were asked about their interest in receiving information and possible mechanisms
through which to convey it to them.
Workers indicated a strong interest in receiving information about OSH, wages and other topics. Of
the 434 workers who responded to the question “Are you interested in receiving best practice
information?”, 83.6 per cent responded “Yes, definitely.” Only 3.7 per cent responded that they
were not interested. (See Table 22)
Table 22: Interest expressed by factory workers in receiving best practice information
Level of worker interest in receiving best practice information
Worker count
%
363
83.6
Yes, maybe
55
12.7
No, definitely not
16
3.7
Yes, definitely
Four possible modes of communication were proposed to workers: mobile phones, television, radio
and the Internet.
47
De Jonghe, Sanyoto and Vanhuyse (2009)
Page 25 of 38
Among the 519 workers who responded to a question about mobile phone ownership, 90.8 per cent
reported that they had a mobile phone. However, most workers did not make intensive use of their
phones, with nearly 50 per cent reporting that they used them only once per day or less (see Table
23).
Table 23: Mobile phone usage by factory workers
Frequency with which mobile phone used by workers
Worker count
%
23
5.1
Occasionally, once per day or less
193
43
Often, a couple of times per day
133
29.6
Very often, several times per day
100
22.3
Almost never
Watching television and listening to the radio were found to be common activities, indicating that
these media could be an effective way of reaching workers. Among the respondents, 77.4 per cent
reported that they watched television daily, while 50.3 per cent listened to the radio daily.
Table 24: Daily radio usage by factory workers
Radio programmes listened to daily by workers
News
Talk shows
Worker count
%
93
19.9
9
1.9
Music
96
20.6
Other
37
7.9
None
232
49.7
A smaller percentage (38.6 per cent) of workers used the Internet. Some 20 per cent accessed the
internet through their phone, suggesting that it might be possible to contact workers by both text
and Internet messages.
Table 25: Internet usage by factory workers
Internet usage by workers
Worker count
%
Accessed at home
13
2.8
Accessed at Internet café
65
14.1
6
1.3
94
20.4
282
61.3
Accessed at family friend's house
Accessed on cell phone
No Internet
When asked about their use of social media, a significant percentage of workers (29.8 per cent)
reported that they used Facebook.
Page 26 of 38
Table 26: Usage of social media among factory workers
Social media site used by workers
Worker count
%
140
29.8
11
2.3
6
1.3
Youtube
15
3.2
Other
17
3.6
None
281
59.8
Facebook
Twitter
Friendster
Therefore, based on usage patterns, it appears that the most effective means of reaching workers
directly may be through text messages or Facebook, via their mobile phones.
Page 27 of 38
Section 5: Conclusion
Given the myriad worker issues revealed through the baseline data, various further avenues of
research and policy changes are recommended.
Considering the troubling occupational safety and health patterns found, it is recommended that all
Better Work stakeholders pay special attention to this issue. The fact that one in four workers
reported having been injured at least once at work, and that severe thirst and extreme heat
emerged as important, connected issues, indicates that these are serious problems.
Better Work Indonesia recognizes the gravity of this issue, and is engaging existing and new
enterprise advisors in expert OSH training according to standards set by the MoMT. Mitigating
serious OSH issues will be an important part of Better Work Indonesia’s advisory services in the next
year. Since the Indonesian government and many companies there have adopted the ILO’s provision
on OSH management systems, the next step is to empower and educate workers. This is the goal of
Better Work Indonesia’s Information, Education and Communication (IEC) Mobile Initiative
described at the end of this section. The IEC programme, combined with Better Work Indonesia,
stakeholder, and buyer involvement in implementation of OSH management systems in enterprises,
and health coverage for all, should decrease the incidence of injury.
The findings regarding hours and rest days are connected to Indonesia’s highly decentralized
government. Workers may be working extra hours because they perceive that their wages are not
sufficient. Minimum wages, however, are set by local district and town/city governments through
tripartite negotiations that are subject to the approval of the provincial governor. 48 Further research
should be undertaken into manufacturing wages and how these wages affect workers’ lives. Higher
wages would mean that workers would need to work fewer overtime hours, resulting in a better
quality of life.
With regard to remuneration, lack of information on pay slips and concerns regarding compensation
may be closely connected. Since most workers reported that information referencing union dues,
bonuses, deductions, piece-rate, and pieces completed was missing from pay slips, it is possible that
minor changes in HR management practices in garment factories might make wage practices clearer
to workers. For example, a dated pay slip might mitigate the concern expressed over late payment of
wages. It might also encourage the management to pay wages on time, as any late payments would
be on record. Deductions and confusion about piece-rate could also be clarified, at least in part, by
including this information on the pay slip.
Though findings in this study suggested that collective bargaining rights were vigorously exercised in
workers’ factories, it would also be interesting to study in more detail what action union officials
take when faced with common worker complaints.
In addition, efforts should be made to increase the number of workers employed on permanent
contracts. Though employers are obliged to provide workers on non-permanent contracts with the
same rights as those on permanent contracts, they often do not do this. Perhaps a cap on the
number of non-permanent contract workers could be implemented in companies. Being on a
permanent contract would make it easier for workers to obtain promotion, join unions and enjoy
other benefits and general rights.
Regarding training, the findings indicated that workers should receive more induction training on all
issues, but especially on basic skills, health and safety, safe machine operation and worker rights, as
48
Caraway (2010)
Page 28 of 38
these are crucial factors in ensuring workers’ well-being. In addition, only very small percentages of
workers reported that they had received training in the past six months, indicating a need to develop
ongoing training opportunities. At the very least, this would help minimize worker injuries and
concerns over workplace hazards, pay procedures, grievance procedures and other issues. At best,
induction and ongoing training would allow more workers to earn promotion.
As regards respect and welfare, an alarming number of workers reported concerns relating to sexual
harassment and verbal and physical abuse. The overwhelming majority of workers, however,
believed that supervisors were fair or better at adhering to factory rules. It seems therefore, that
workers believe that it is acceptable under the factory rules to be treated this way. Accordingly,
workers should be trained in identifying inappropriate workplace behaviour, while managers should
be trained in understanding the concept and negative impact of sexual harassment. In addition,
employers should be advised to develop policies and procedures to prevent, identify and deal with
sexual harassment.
Finally, given that a considerable majority of workers have children, and that these workers reported
that they were clocking in long hours, were not union members, and were not getting promoted, it
might be prudent to study quality childcare options for workers’ children. This would allow such
workers to become more involved in unions and other work-related activities.
Page 29 of 38
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Page 31 of 38
Better Work Impact Research
The Better Work global programme is supported by (in alphabetical order):
• Australian Government
• Levi Strauss Foundation
• Netherlands Ministry of Foreign Affairs
• State Secretariat for Economic Affairs, Switzerland (SECO)
• United States Council Foundation, Inc. (funds provided by Gap Inc., Nike and
Wal-Mart)
Additional funding for this publication provided by the Federal Ministry for
Economic Cooperation and Development, Germany (BMZ), and the International
Finance Corporation (funds provided by IrishAid and The Walt Disney Company)