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INDONESIA DIGEST
Indonesia's complex Issues in a Nutshell
By; Ms. Wuryastuti Sunario
Published by: TBSC-Strategic Communication
No.: 04.06 - Dated: 31 January 2006
In this issue:

MAIN FEATURE:

LABOUR LAW TO BE AMENDED TO IMPROVE INVESTMENT CLIMATE

NEWS AND BACKGROUND:

1.      The Environment, Health and Culture
The World's smallest fish discovered in Sumatra lagoon
·         Containing Avian Flu: Consumers to watch their step in wet markets
2.      Politics and Security:
Enhancing Bali's safety and enjoyment:
Emergency Drills at Bali Airport, Sanur Security Equipment installed; 
President and VP stroll along Kuta Beach; Singapore's Valuair services Bali

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MAIN FEATURE:

LABOUR LAW TO BE AMENDED TO IMPROVE INVESTMENT CLIMATE

Labour Law No. 13 of the year 2003 will be amended to improve Indonesia's 
investment climate, said Minister for Labour and Transmigration, Erman 
Suparno. Amendments will be made in consultation with the Minister for Law 
and Human Rights, to be enacted by Parliament, reports Bisnis Indonesia.

Five major points to be reviewed encompass firstly, the authority to 
determine regional minimum wages, which at the moment is with the provincial 
governor after receiving recommendations from district heads and mayors, 
this will be transferred to become the authority of district heads and 
mayors.

Second, the stipulation on labour strikes. At the moment, labour will go on 
strike before bipartite negotiations are commenced. This situation is to be 
changed and regulated so as not to become a cultural trait of labour 
organizations.

Third, stipulation on retrenchment and retrenchment pay. Amounts mentioned 
will be reviewed and adjusted, said Minister Erman. For example, a manager's 
retrenchment pay will equal that of workers, so that managers will have to 
think twice before changing jobs, or making retrenchment a profitable way 
out. In the case of manual labour who are retrenched because of criminal 
offences, different rules will be applied.

Fourth, the matter of outsourcing. Distinction must be made between core 
jobs and non-core jobs. In fact, outsourcing creates new employment, 
however, new rules must be applied.

Fifth, permits to foreign workers. Foreign workers must hold employment 
permits. In the case where the foreigner is a company's owner, director, or 
shareholder, permits form a package with the establishment of the company. 
Nonetheless, temporary foreign technicians, for example, need additional 
permits.

Additionally, amendments are also sought to Law No. 21 of 2000 on the 
establishment of Labour Unions. In the present Law, unions may be 
established by a minimum of 10 workers. In the case where a company employs 
10,000 workers, this means that there may be established 1,000 unions in 
that company, which would be chaotic.

The Indonesian Chamber of Commerce, KADIN, has responded positively to the 
proposed amendments, however, urging that the Chamber be included in 
preparatory discussions. Benny Pasaribu of Kadin feels that any amendment 
must create win-win solutions, which will be capable to bring growth to the 
company but also improve working conditions for its workers. Whilst, 
Executive Director of the Indonesian Textile Association, Ernovian G. Ismy, 
asks that wages be adjusted according to productivity and capacity of 
companies, and not based along minimum living expenses, where wages 
constitute between 10% to 27% of production costs in the industry. The 
textile industry is very labour intensive, employing 1.7 million workers in 
Indonesia, and will, therefore be adversely affected by non-conducive 
changes and stipulations in the labour Law.

Labour Minister, Erman Suparno, plans to hold tripartite meetings latest in 
February so that the new Law may be enacted by mid-2006.

In meetings with investors and prospective investors from Japan and the USA 
recently, investors cited drawbacks presented in the Labour Law as one of 
the priorities recommended to be corrected by the government to make 
Indonesia more competitive vis-à-vis opportunities offered by other 
countries.

Data on Unemployment

Meanwhile, Labour and Transmigration Department Secretary General, Harry 
Heriawan revealed that in 2005, Indonesia counted 10.8 million unemployed or 
10.3% of total population. In 2006 and 2007 unemployment is expected to turn 
around, so that in 2009 the figures will be reduced to less than 6%.

Elasticity of employment in Indonesia is also relatively low. It is 
estimated that 1% in economic growth will provide only 200,000 jobs, so that 
with a predicted 5% growth this year, only 1 million job seekers can be 
absorbed. Whereas, each year 2.5 million new entrants join the workforce. Of 
the 10.8 million unemployed, 61% have received secondary education; 30% are 
from primary education, and only 7% have benefited from tertiary education, 
reports Kompas daily.

For this reason, the government urges that more investments in 
labour-intensive industries be made, in order to allow twice the present 
growth in job creation.

Sources: Bisnis Indonesia, Kompas.          (Tuti Sunario)
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NEWS AND BACKGROUND:

1.      The Environment, Health and Culture

The World's smallest fish discovered in Sumatra lagoon

Britain's Royal Society announced that  a fish found by Swiss ichthyologist 
Maurice Kottelat in the lagoons of the island of Sumatra, was not only the 
world's smallest known fish, but it is also the tiniest vertebrate ever 
found. Kottelat made it a habit of wandering through the Sumatra's dark, wet 
peat bogs, and is racing to discover new species of fish before the bogs are 
drained and burned by settlers.

In the past five years, he has discovered 450 new species of fish there. 
Most of them are small and under six inches. But one day in his net, 
Kottelat saw an unusually small fish; he thought it was just a baby. He sent 
it on to London's Natural History Museum, where researchers confirmed that 
the specimen the size of a nail clipping wasn't a baby at all, but the 
smallest adult vertebrate ever found.
The fish, Paedocypris progenetica, takes the title away from another fish: a 
half-inch-long goby found in the northern Pacific.
The fish, a member of the carp family, has a translucent body and a head 
unprotected by a skeleton. Mature females grow to less than a third of an 
inch long (or smaller than the width of a finger), reports John Nielsen for 
the Environment.
·         Containing Avian Flu: Consumers to watch their step in wet markets
With dangerously unhygienic conditions at thousands of traditional wet 
markets in the country, the World Health Organization (WHO) is advising 
consumers to take precautions in handling poultry products.
A member of the WHO team that recently inspected traditional markets here, 
Roy Sparringa, warned the public to change its behavior even though there 
were no proven cases of transmission of the virus from poultry products to 
people.
The official at the Food and Drug Monitoring Agency (BPOM) told The Jakarta 
Post that ignorance persisted among consumers, particularly about eating 
uncooked and undercooked poultry products.
"There are so many misperceptions that have led people to consume raw 
poultry products, such as raw eggs and innards. With the threat of a 
pandemic increasing, I suggest such consumption should be stopped."
With no refrigeration of slaughtered chickens and ducks available at wet 
markets, and stalls close to each other, they are a thriving site for 
bacteria. A poultry seller who died last week in Jakarta has tested positive 
here for the deadly H5N1 strain of the avian influenza virus, although it 
must be confirmed by the WHO laboratory in Hong Kong.
Roy cited a joint WHO and Food and Agricultural Organization circular that 
said that even though the avian influenza virus was usually found in 
respiratory and gastrointestinal tracts of infected birds, studies indicate 
that such highly pathogenic virus spread to all parts of an infected bird, 
including its meat and eggs. The H5N1 strain could be found inside and on 
the surface of eggs laid by infected birds.
"Although sick birds will normally stop producing eggs, eggs laid in the 
early phase of the disease could contain viruses in the albumen and yolk, as 
well as on the surface of the shell," the report said.
WHO Southeast Asia Regional Office food security consultant Sanjay Chaudhary 
emphasized the importance of thorough food preparation, especially in 
cooking, to prevent the spread of germs.
The organization is promoting safer food tips that would not only help 
prevent the possibility of spreading the bird flu virus, but also curb 
transmission of other foodborne diseases, such as salmonella and e-coli. 
Among them is that eggs from areas with bird flu outbreaks should never be 
consumed raw or partially cooked.
"Eggs with a runny yolk should be avoided," he said, adding that cooking 
poultry at above 70 degrees would inactivate the virus.
People are also encouraged to separate raw meat from cooked, especially on 
food preparation surfaces, to avoid contamination; wash their hands after 
handling frozen or thawed raw chickens or eggs, as well as keeping food at 
safe temperatures -- below 5 degrees or above 60 degrees -- to slow or stop 
the growth of microorganisms.
Roy acknowledged the problems in educating consumers, because many people 
consumed improperly cooked meat and eggs, including adding raw eggs to jamu 
traditional herbal drinks.
"Telling people to stop consuming such products would be difficult because 
the practices have been passed down from our ancestors."
However, he said WHO, BPOM and the government would do their best to educate 
the poultry sellers and the customers about safe handling of the products.
"We would add more detail measures on food safety in the government's 
strategic plan to control the pandemic, he said.
The government will dispatch 2,000 food inspectors at district levels across 
the country and 1,400 food safety campaigners to educate members of the 
community.
Indonesia has 14 confirmed human deaths from bird flu.
Although all human cases at present acquired H5n1 from infected live and 
dead poultry, experts worry that the virus could mutate to forms easily 
transmitted among humans and spark a global pandemic.Tb. Arie Rukmantara, 
The Jakarta Post.
2.      Politics and Security:
Enhancing Bali's safety and enjoyment:
Emergency Drills at Bali Airport, Sanur Security Equipment installed; 
President and VP stroll along Kuta Beach; Singapore's Valuair services Bali


Bali's Ngurah Rai International Airport conducted another emergency drill on 
Friday, January 27, 2006; one in a series of regular drills conducted to 
test the ability of the Airport and related public safety units to respond 
in emergency situations, reports balidiscovery.com

Friday's drill was staged at the international departure terminal of the 
airport and involved the airport's security brigade, airport police and 
Bali's highly-trained emergency response police team.

The exercise began with the "identification" of a suspected explosive device 
in the airport prompting an immediate evacuation and "seal-down" of 
surrounding areas by police and airport security personnel. Within minutes 
fire fighting teams and ambulances arrived at staging areas, prepared to 
respond if the situation demanded it. Simultaneously, the Bali Police 
emergency response team's bomb squad arrived on the scene. While a team of 
officers made a larger sweep of the area for any additional suspicious 
objects, two experts wearing full protective clothing and carrying 
sophisticated equipment assessed the suspected bomb before removing it to a 
more remote location outside the terminal.

Every step of the drill was controlled and monitored from a hi-tech crisis 
center located in a secure location within the airport.

The entire drill was over in less than an hour with the response team 
getting a round of applause from tourists who witnessed the well-coordinated 
drill from a safe distance.

On Monday, 30 January, anti-terrorist drills in case of a hijack were 
exercised at Bali's Ngurah Rai airport. The scenario played out was that a 
Garuda wide-bodied aircraft was hijacked between Jakarta and Brisbane and 
diverted to Bali. Here, after two days of unsuccessful negotiations with 
hijackers, Indonesia's Special Anti-Terrorism troops stormed the plane and 
incapacitated the hijackers. After the arrest, passengers were allowed to 
deplane, but not after thorough body-checks to ensure that none of the 
passengers were co-hijackers disguised as passenger, reports TV7.

Security Equipment installed along Sanur

Meanwhile, in response to Bali's latest terrorist attack and calls from 
Bali's Chief of Police to enhance "community policing," the people of Sanur 
Community Village have begun independently installing CCTV surveillance 
cameras at key locations within their neighborhood.

Largely unseen by the tourist visitors frequenting the hotels, restaurants 
and shops that populate Sanur Village, cameras are now keeping an around the 
clock eye on beachside jogging tracks and main roadways around Sanur. The 
cameras are all centrally linked to the office of the Sanur Foundation where 
selected members of the 33-man Sanur Local Security Force will monitor and 
maintain constant contact with members of their team and local police 
authorities.

Part of a local community initiative using a 14 kilometer long fiber optic 
cable operated by a local firm - Bali Media Net, Sanur community leaders 
eventually hope to add more CCTV camera, create a community Cable-TV station 
and even allow people to view Sanur's underwater marine life via a 24-hour 
underwater camera.

Indonesia President and Vice President Make a Special Point of Getting Up 
Close and Personal with Bali's Visitors.

Is Bali safe and a good place to visit?

Apparently, both Indonesian President Susilo Bambang Yudhoyono and Vice 
President Jusuf Kalla think so. During separate visits over the past week, 
Indonesia's #1 and #2 leaders made high profile visits to Bali demonstrating 
that they are genuinely "men of the people," at ease with the local security 
situation.

On Wednesday, January 25, 2006, President Susilo Bambang Yudhoyono and First 
Lady "Ibu Ani" made an unannounced visit to Bali's Kuta beach area. For more 
than an hour the President and his wife strolled along Bali's most famous 
stretch of beach where they purchased souvenirs while chatting with foreign 
tourist, local shop owners, and beach masseuses.

Shaking hundreds of hands with both local and international visitors, the 
Susilo's happily obliged the many requests from tourists eager to have a 
photo opportunity with Indonesia's CEO. Apparently very much at ease with 
Bali's current security situation, the Chief Executive's security team 
appeared relatively relaxed as the President plunged into crowds of tourists 
along the beach and the throngs at Kuta's traditional market.

In a separate visit to Bali on Thursday, January 26, 2006, Indonesia's Vice 
President Jusuf Kalla returned from Japan and a four country foreign tour on 
board a commercial Garuda flight. During the long flight from Tokyo to Bali 
the Vice President actively paced the aisles of the aircraft engaging in 
conversations with the pleasantly surprised Bali-bound passengers.

After a surprise inspection of the immigration services at Bali's airport, 
the president continued on to Jakarta, again using a commercial aircraft 
where he repeated his public contact foray, asking Jakarta bound passengers 
for feedback on their just completed visit to Bali.

Budget Carrier Valuair Commences Service to Bali.

With security tightened on Bali, balidiscovery.com further reports that 
Valuair - the Singapore-based budget airline launched its thrice-weekly Bali 
service on Friday, January 27, 2006.

Valuair flies to Bali on Tuesday, Friday and Sunday with the following 
initial schedule:
departing Singapore at 3:15pm arriving in Denpasar at 5:55pm. VF 542 will 
depart Denpasar at 6:45pm, arriving in Singapore at 9:30 p.m.

Very Cheap Fares

Regular round-trip fares between Singapore and Bali will be sold by Valuair 
for S$ 199 (approximately US$ 122.40).

Neil Thompson, acting CEO of Valuair said, "Bali is an important destination 
for us. I've always been amazed that so many people have such a personal 
affinity with Bali that they're compelled to return again and again, yet 
they've not had the benefit of low airfares. With Valuair we're going to 
change the playing field to make Bali a destination that will enable 
travelers to keep their strong attachment to this beautiful island on a more 
regular basis."

Bali is the third Indonesian destination served by Valuair - they also fly 
to Jakarta and Surabaya, reports balidiscovery.com


For your comments or further inquiries, please e-mail to: 
tbsc-strategy at indo.net.id