Trade Union Strategies to meet the Challenges of Neo-liberal Globalisation and the Informalisation of Work: Cases of Indonesia and Singapore

The most important revolutionary force at work in the Third World today is not communism or socialism but capitalism… Robinson, 1986 

Indonesiaand Singaporeare two neighboring countries which geographically located in Southeast Asiaregion. Both countries have unique characteristic that distinguish them in term of economic, social, political and cultural. For example, Indonesiais a large country[1] (BPS, 2000) and rich in agricultural products and mining, but its Human Development Index (HDI, 2007) is on 111th. Singapore, on the other hand, according to A.T Kearney/Foreign Policy Globalization Index is categorized as one of the world’s most globalized nations (2006) with its HDI in 23rd despite its territory is only about 710,2 sq km (SDS, 2008). Singaporean per capita income is USD 49,704 compared to USD 3,712 of Indonesian. Referring to these reports Singapore is categorized under the group of developed countries while Indonesia is under developing countries group

Indonesiauniquely is the only member of ASEAN (the Association of Southeast Asian Notions) joint with G20 members. This situation puts Indonesia to become a country which must have economic policies and market that will be a best option to capitalize the G20 membership in order to advance its interests, especially as it provide an avenue to engage itself with countries of the G8 as a ‘global steering group’ on high profile and priority issues. Meanwhile, Singapore has already provided political stability and economic security with good infrastructure which placed itself as a regional hub for international finance, trade services, telecommunications, tourism and, more recently, in the area of arts and culture (Velayutham, 2007). 

This paper will discuss roles and strategies taken byIndonesiaandSingaporeunions in dealing with during their existence and challenges they must face with under neo-liberal globalization and restrictive system of labor law.

Union’s Strategies along the Road, now Faced with Informalization of Work: Indonesia

Glassbuner (2007) said that labor movement in Indonesia had started since 1908 and influenced by nationalist aspirations for freedom. Political and ideological considerations had frequently been more important that economic demands. During Dutch colonialism, “labor union” was affiliated to political parties which, in general, struggled for Indonesian independence. For example, armed labour units called lasykar buruh were involved in defending workplaces against enemy force and were known to have seized foreign-owned production facilities in the nationalist cause. (Hutchison and Brown, 2001).

During 1950s, Indonesian labor movement became stronger, probably the strongest in Indonesian labor movement history, reflected by better legal protection toward workers. For instance: at that times government decided to set working hours at 40 hours/week whereas most other countries still standardized 44-48 working hours per week, enacted Law No21/1954 on Collective Bargaining, ratified ILO Convention No 98/1949 concerning Right to Organize and Collective Bargaining. However, after this golden period, Indonesian labor movement had turned dramatically from “revolutionary nationalism”[2]into centralistic one following approach taken and imposed to every single social and political entity by New Order regime under Soeharto. Centralistic nature of the movement were represented by single union FBSI (Federasi Buruh Seluruh Indonesia) which in 1985 transformed itself into SPSI (Serikat Pekerja Seluruh Indonesia) and finally into FPSI (Federasi Pekerja Seluruh Indonesia). During his leadership, freedom of association was not hindered, but workers must be member of FSPSI[3]; workers were tamed and controlled by using military and police forces, and as a result new order became paradise for foreign investors and domestic capitalist cronies (Heryanto and Mandal, 2004).

It’s a credo within capitalism to take maximum profit with minimum capital and efficiency and effectiveness as its magic words. After Suharto stepped down from his crown and replaced by his successors—during which some provisions seemly take workers on favorable position such as ILO Convention No. 87/1948 ratified—unions emerged like mushrooms in rainy season[4]. Nevertheless, workers gained little benefit from this unprecedented freedom. Enactment of Law No 13/2003 was allegedly an intervention of international capitalist which has created informalization of work. Under this law, companies get permit to subcontract and outsource their workloads which in turn limited workers from their access to establish union within their workplaces. That is only one challenge workers must faced with during post-Soeharto era. Other problem with this Law enactment is that the law provides companies with minimum wage which regulated under its derivatives, i.e., Government Regulation (Keputusan President) and Local Decree (Peraturan Daerah). In practice, minimum wage has become maximum wage workers receive for. This, in turn, has limited dues workers-union members pay for and weakened union to implement its programs. The logic consequence from this situation is that unions are now competing one with another for memberships which in turn weakening its bargain position before employers and government. And now, as globalization brings about borderless territory and, in consequence, in-and-outflow workloads across countries, the crucial task Indonesian union must dealt with is to protect migrant workers[5].

Benefits from Symbiotic Ties

Labor relations in Singapore, National Trade Union Congress (NTUC), has been confirmed by a shared consensus they built since the beginning of ‘symbiotic’ relation with the ruling party, PAP (People’s Action Party). “The parties are convinced of their commitment to the building of a democratic, just and prosperous society for the workers and all in Singapore. The symbiotic relation has been due to historical factors, conflict between communist group (Barisan Socialis) and nationalist (PAP). Biggest victory PAP gained on 1959 legislative election was a stepping-stone for the PAP-NTUC symbiotic relation (Singapore Government Press Release, 1984).

PAP agreed to support NTUC financially and administratively and, in return, NTUC agreed to accept a new set of legal restrictions on its freedom of association, including the granting of legal protection to the exercise of the management prerogative. Symbiosis relationship also means that the NTUC General Secretary is appointed or approved by the government and is given cabinet seats (Woodwiss, 1998).

Through the experience of industrial unrest in the years 1954-1954, the government (PAP) in 1960 published the Industrial Relations Act (IRA) which provided the legal framework for union and employers to settle the industrial dispute. To create a laissez-faire atmosphere, in the year 1968 Prime Minister Lee Kuan Yew successfully pushed through Parliament a new employment bill and amendment to the 1960 IRA.

Political stability and national security has become an important key toSingaporeeconomic growth which heavily relies on manufacturing, financial services, and trading. Labor movement must be controlled in order to create the two keys above. Flexible market and labor flexibility have been used as means to attract investment, andSingaporeadministration has not set a minimum wage. Employers have been given discretion to set wage based on business performance and, in turn, this has become a strong reason for the business to adjust (cut-off) salary during crisis to prevent dismissal. In June 2002, the Industrial Relations Bill was passed; it stipulates that newly established companies can provide more favorable conditions that the minimum conditions in the Employment Act (ITUC, 2008).

Recently NTUC has about 500,000 members or 20% of workforce (Ibid), and has become single labor movement inSingaporewhich has not only been a bargaining agency but also fully engaged in social and economic development ofSingapore. Workers welfare has been an orientation and in strengthening purchasing power  of workers NTUC offered Social Enterprises ranging from supermarkets, healthcare, clubs, income, thrift, etc. (NTUC, 2009).

Singapore are also heavily depended on foreign labor[6], especially lower skilled workers (Singaporean does not want to fill these jobs because of low payment) which are concentrated around construction industry, domestic services, manufacturing and marine industries; the number was estimated around 248,000 in 1990 to 670.000 in 2006 (Yeoh, 2007). Their employment conditions has been under contract system in accordance with the work permit. In April 2009 (NTUC, 2009), NTUC openedMigrantWorkersCenter with three objectives: (1) provide humanitarian assistant; (2) promote fair employment practices; (3) facilitate harmonious co-existence between local Singaporean and foreign workers. The center is a result of NTUC Migrant Workers Forum which was established in 2003, bringing together unions in industry with large numbers of foreign workers. The Center also provides some activities and facilities for migrant workers both educational and recreational in nature.


It is difficult to define types of union in Indonesiatoday, especially in term of their policies and strategies in dealing with current global challenges. Fragmentation into multiplicity unions has in fact put the union into competitive arena for membership. This situation clearly will prevent working-class to cope with neo-liberal environment which increasingly erodes spaces for formal labor market. This situation is contrasted to NTUC which has utilized political unionism with great influence from ruling political party today, PAP, both administratively and financially. With reason to avoid social disturbance, building secure, stable and reliable social construction has been offered as an environment to attract foreign investors into Singapore, and Indonesia has also been offering the same but relative failed due to not-yet capability in Indonesia administration to give such guarantee.

Government of Singapore, PAP, from the beginning has offered ‘economic concession’ (Clark and Clement, 1978, p.73) to win the confidence of the working classes, and this is necessary to develop Singapore after get the freedom from British colonialism and Malaysia Federation (1965 ). But behind all these, it could mean that the PAP has been anti-union movement, and in fact this had been also happened during Suharto administration in Indonesia. Iron triangle was executed in labor-management relationships involving workers, employers and government with intention to avoid disputes and build “trust and harmonious relation”. Indeed, Singapore has been success in implementing “tripartite” and so did Indonesia during Soeharto era called Hubungan Industrial Pancasila[7]. This is also in line with what was said by Turner (2006) that global liberalization is driving ‘logic of participation’, seeking a partnership for sustained participation (NTUC), or doing outsourcing and union-busting as happened and experienced by workers in Indonesia today.


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[1] In term of territory and population, Indonesia is stretching along 3,977 miles between the Indian Ocean and the Pacific Ocean, and has a total area of 1.9 million square miles including the ocean waters (source: Estimated population ofIndonesia is now around 230,632,7000 (BPS, 2009)

[2] The author extracted the revolutionary term from the paper of Prof. Devan Pillay (2008): Holding the Centre: Workers and ‘Popular-Democratic’ Politic in SA.

[3] FSPSI was only for blue collar worked at private sector. Civil servants and public employees were joined with KORPRI (Civil Servant Corp of Republic Indonesia). KORPRI was a single association for civil servants and employees of state/regional owned enterprises established in 1971, with a huge membership due to they have authomatically became its member, in 1999 the membership reached 4.7 million and 1.7 million of which was teachers. KORPRI developed into productive machine for the winning of GOLKAR in election of the year during Soeharto era.

[4] By 200, over 18,000 plant-level had registered, many of which were associated with dozens of union federations and three confederations, namely KSPSI (Konfederasi Serikat Pekerja Seluruh Indonesia, former name was FSPSI), KSBSI and KSPI (Broadbent and Ford, 2008).

[5] According to BNP2TKI (Center for Training and Placing for Indonesia Migrant Workers) in 2008 there are about 748.825 Indonesian workers going abroad to work for a better life and 36% of them has been working in informal sector, mostly as domestic helpers (The Jakarta Globe, 20th August 2009). There are lots of violation cases against migrant workers both in the country, i.e., during their preparation processes to abroad such as cheated by labor agencies and abroad such as tortured by their employer, not paid salaries, and unilaterally repatriated. Sadly, the three national federations above has not taken concrete actions to provide protection for migrant workers. Instead, labor-related NGOs have been more active in advocating and protecting migrant workers abroad.

[6] For Singapore, foreign workers are to be critical to the economy, comprising 28% of the total workforce in 2004 according to the Singapore’s labour ministry. In the past, it has made up as much as half of the total workforce (ADB, 2006). In 2008, the number of Indonesian workers worked in Singapore was about 98,000 both in formal and informal sectors (mostly domestic workers), and they produced remittance to Indonesia as around 12 million U.S Dollar per-month (Kompas, 9th November 2008). For Indonesian domestic migrant workers, the main reason for working abroad is to look for better living standard. But in reality, they are among the lowest paid migrant workers in Singapore, and the most likely to be poorly treated (Ford and Parker, 2008).

[7] Pancasila is five principle ideology of the Republic of Indonesia: (1) belief in supreme God; (2) humanitarianism; (3) nationalism expressed in the unity of Indonesia; (4) consultative democratic, and; (5) social justice

Kassel, Germany 3rd January 2010


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