Fair Trade: The Indonesian
Women Home-Based Workers' Way
Dr. Hesti Wijaya, Homenet Indonesia
1. Introduction
Like the rest of the world population. Indonesian women home-based
workers suffer from the negative impact of free trade and globalization
ruled by WTO. Their economic and social rights as women home-workers
are not given due recognition.
The on-going economic crisis and liberalization policies have
contributed to intense poverty, economic insecurity and gender
inequality continue to persist (in the form of exploitation to
women home-based workers).
Homenet Indonesia engagement with the OXFAM Hongkong Project
came later than Homenet Thailand and Patamaba. It was not an easy
process to learn about free trade issues, although the women home-workers
perceive that there are similarities to their long existing issues.
Like other developing countries, Indonesia is heavily burdened
with foreign debts and must comply with the structural readjustment
policy of the World Bank/IMF (a package of rules covering deregulation,
privatization, increasing tax, tightened government social spending,
devaluation and removal of government subsidy). These measures
ensure that the indebted country can repay the debt plus the interest.
Free trade and trade liberalization becomes the natural choice.
Indonesia is signatory to the 1994 Marakesh agreement that removes
trade barriers between trading countries under the World Trade
Organization (WTO). The trade agreement gave expectations that
capital investment of Multinational and Transnational Corporations
will result to a robust economy for Indonesia. And by offering
the lowest production cost in agriculture, non-agriculture and
services, people were misled by the promise of raking in higher
profits in return. Value chains commonly seen in outsourcing and
the putting out system involve home-workers. The outsourcing system
became popular in Indonesia through the proclamation of the latest
labour law (Law no 23) in year 2003.
Indonesia has been suffering from the economic crises since 1997.
The currency rate of the Indonesian Rupiah has been stable at
500% of the pre-crisis currency/exchange rate. During the second
semester of 2006, it progressed to 400% of pre-crises currency
exchange rate. Home-workers have tried every possible means just
to survive. For the home-workers and the NGO partners, the current
state was not an easy situation to be in.
Impact of Free Trade as felt by the Home-based Workers
The East Javanese Home-based workers observed that:
- Fast growth of informal workers resulting from -
- Retrenchment of formal workers due to company closures
(bankcruptcy); and rationalization of workers
- Young labor force emanating from a new generation of
workforce; and school-dropouts.
- The phenomenon has resulted to -
- strong competition among workers and opening of informal
work opportunities
- irregularities
- mushrooming of outsourcing employment
- lack of workers’ protection and no social security
- employer– employee relationship has further
put workers at a disadvantage.
- Feminization of informal workers - very much related to the
gender ideology that dictates women to stay home even for income
earning activities; responsibility in household chores; extended
function of reproductive role to child care; secondary income
earner while men are the bread winners; as second-class workers,
they find difficulty competing with men in formal employment.
As a result, women home-based workers (in the putting-out
system and the self-employed), find it difficult to improve
their economic and living conditions.
- Competition occurs in various ways beyond the workers’
issues.
Amazingly, the competition, at the domestic and global levels
is becoming more intense for various reasons. For example, retrenched
formal workers or new job entrants flock into the informal economy;
they compete with self-employed women home-based in the labor
market.
As for the home-workers in the putting out system, the competition
has resulted in the following problems: smaller quantity of
orders; irregular orders; lost of orders and lower piece rates.
However, the culprits of competition have advanced beyond
the home-workers’ imagination, such as :
- flood of cheap second-hand clothes from Malaysia and other
countries; impact of new garments from China with lower
price than the domestic production
- technological change that displaced women’s labor
(in the garment sector), such as the computerized embroidery
sewing machine
- Cheaper food import/agricultural product
- American based franchised food companies such as Mc Donalds,
Kentucky Fried Chicken, A&W, that have taken over local
food industries of the home-based workers.
- Import of cheap household utensils made of plastic and
various domestic plastic products.
Thus, substitution of the home-workers products have begun
to take place. The free entry of non-agricultural goods and
agricultural products very seriously hit the livelihood of
HWPRI (The Association of the Indonesian Women home-workers)
members. For example :
- 3 groups of garment workers in Tulungagung East Java lost
orders and became jobless. They quit from HWPRI because
they realized that they are no longer categorized as home-workers
in the putting-out system. They are the ultimate victims
of free trade.
- 2 HWPRI groups of embroidery in Sidoarjo, East Java ceased
operations with the entry of computerized embroidery sewing
machine.
- The bra producers, small enterprises in Bukit-Tinggi,
West Sumatra, drastically reduced workers (around 100 to
150 home-workers some 3-5 years ago). Due to cheap imported
bra from China, enterprises now employ 5 – 10 home-workers
only. With globalization respect to local product diminished
and foreign goods are preferred choices by the young generation.
Foreign products are considered more attractive than the
local goods, and valued as “gaul”, meaning really
trendy.
- Floor mats made-of “mendong” (grass family
– locally grown), and “pandan”, from the
pandanous family, are no longer produced. It cannot compete
with plastic machine woven floor-mats produced by domestic
factories. Around 200 women home workers in Malang, East
Java, lost their job, resulting to a decline in the number
of HWPRI members. Some still remain jobless, surrendering
life to religion, as they witness the dilapidation of wooden-weaving
mendong machine.
Traditional kitchen utensils and various households made
of bamboo disappeared in Bantul and Sleman, Yogyakarta, since
they lost to competition with the plastic-based substitute
of kitchen utensils and plastic furniture.
The number of HWPRI members in Yogyakarta dropped drastically
to around 60%, also as a result of:
-
The replacement of handwriting batik
industry involving long value-chains of women home-workers,
into factory-made batik printing which entails a shorter
and simple process; thus, price is cheaper than the traditional
handwriting batik. Cheap batik products are now in demand,
even among the Indonesians. Even the government launched
a “Love Batik” movement and successfully “enforced”
use of batik as official/school uniform and working uniform.
However, that action does not offer better employment
opportunity to women home-workers in the putting-out systems.
When they lost their job as home-workers, a large number
of them have taken refuge in informal employment, mostly
in home-based work.
- High-cost of imported materials
Leather-handicraft production of the traditional shadow puppet
and its miniature, bookmarks, lamp shade, traditional lady’s
fan, etc dropped when the cost of imported materials rose
sharply. In addition, the slaughter of cattle also decreased
due to the fall of real income of the inhabitants. Moreover,
the price of imported cattle fattener cost a fortune, which
is beyond the buying capacity of local producers.
- Exploitation
In Bukit-Tinggi, West Sumatra, the Sister Cities program
of Bukit Tinggi with a city in Malaysia facilitates entry
and traveling from the Malaysian side. Economic activities
are booming. However in the case of women home-workers production
system, the analysis indicates that the Malaysian employers
benefit more. They offer jobs for women home-workers to work
on traditional hand-needle Minangkabau embroidery, and are
paid with the “market price” of piece rate work
with monthly salary ranging between 25% - 33,3% (or one fourth
to one-third) of the Minimum Regional Wage. In Malaysia, these
dresses are sold at a high price. Compared to the eye-soring
and back-breaking contribution of the home-workers, cost of
the piece-rate which is equivalent of USD 50 cts – 60
cts a day is, indeed, not fair.
Similarly,products ordered by Chinese traders
are exported to China, and then re-enter Indonesia at a higher
price.
- No transparencies, no-negotiation, no dialogue between women
workers and the Indonesian sub-contractors.
Simply, a form of instructional dictatorship – whether
take it or leave it. One of the sub-contractors who has been
empowered had a dialogue regarding orders but ended with no
more contract. Other sub-contractors are forced to accept
injurious terms of contract even if the work involved is more
difficult as the Malaysian materials are finer than the Indonesian
materials.
- Home-workers in East Java unanimously agreed that very unfair
trade/free trade is exactly the same as what they have experienced
in the home-working system.
To mention several these are :
- No dialogue, no respect, no transparencies at all with
the home-workers. Almost similar every where, on almost
all sectors – “…. take it or leave it!
If you don’t take, surely there are others eager to
take it ….”
- Work opportunity for the home-workers within free trade
are no better terms of contract than what they usually had;
for example: the piece rate is much less than the equivalent
minimum regional wage and women are perceived to be 2nd
class citizens.
- With the MNC’s & TNC’s employing outsourcing,
as experienced by the Bantar Gebang – Bekasi, West
Java home-workers, work duration is short term, (2 - 3 subcontracts).
There is no long term relationship in subcontracting, and
oftentimes, work is left unpaid.
- There is no social security nor social protection benefits.
- Absence of job promotion.
- Piece rate/payment is not fair at all, judged from the
standard regional wage rate.
- Gender inequality persists and working conditions usually
far from healthy standard practices such as crowded working
places, filthy, unsafe, uncomfortable, insufficient light,
lack of ventilation, etc.
- Child labor becomes inevitable specially when the mother
works in the home.
- Self-employed women home-workers experience the following
hardships: are usually unfairly paid for their products;
there is little, (if at all, there exists) respect and transparency
between the producer and the trading partner; lack of capital
even if there are job orders; lack the capacity to develop
their small business; lack of attention to the issue of
health and safety, as well as deterioration of environment.
Interestingly, related to environment, even
the MNCs and TNCs also do not care about environmental degradation
specially where profit is concerned.
2. What has been done by the home-based workers toward fair trade
?
Various responses have been listed as follows:
- Awareness-raising on the need to address fair trade among
- HWPRI leaders of East Java; peer training with funding support
from Oxfam Hongkong.
- Home-workers and sub-contractors of the hand-needle embroidery
in West Sumatra, with funding support from FNV/UNIFEM project.
- Negotiation for better piece rate (or a fairer wage equivalent)
Since the early phase of grass-roots organizing
in the 90’s, developing negotiation capacity for fair
wage has one of the main activities, among others. Models
of accessing ways of being paid with higher piece-rate have
been sought and developed.
- Social security and social protection benefits
Obtaining social security for workers in
formal employment has been sought in the 90’s but was
unsuccessful. As an alternative, indigenous social protection
has been developed and these include 1) Social welfare scheme;
2) Health scheme; 3) Economic scheme and 4) Organization and
Network scheme.
The health security scheme collapsed during
the economic crisis due to the exorbitance of medicine and
health care. However, benefits that were successfully pursued
are: Vacation leave, Maternity leave and benefits, Sick leave,
Hari Raya benefits and Hari Raya leave.
In Tulungagung, just to obtain 3-days extra Hari
Raya leave, a worker had to stage a solo strike. This goes to
show that benefits available in informal work must be fought by
women home-workers, just to be able to obtain these.
- Safety and healthy working conditions
Action to improve safety and healthy working
conditions has been implemented in Malang, Tulungagung and
Sidoarjo, East Java. The home as the work-place of the home-workers
were re-arranged or reorganized for better lighting, better
work place arrangement, safer and more comfortable. Homeworkers
have been trained on the use of health protection equipment
and cleanliness.
- Gender equity
Gender awareness raising was undertaken by
almost all of the women home-workers’ group. The practice
of gender equality has been advised at all levels: individual,
household and workplace (particularly employer – employee
relationship).
- Child labor
This has not been an easy issue to address.
It seems natural to find that when a mother is at work, the
children start to copy or imitate what she does. And they
help out, specially when she is heavily laden with work. Culture
too, has inculcated that the children must help their parents.
A child’s labor is unpaid work, but is oftentimes performed
as labor of love. Among the producers of the ready-made food/snacks,
it has been customary for the children to peddle or sell the
mother’s product.
Children have nimble fingers that could
perform better tasks that require manual dexterity than adults.
Programs to stop employment of children and unpaid child labor
has so far been successful under special, focused project
of YPSI in Tangerang, Banten, and Jakarta.
- Environmental Control
This has been done in selected areas where
the environment is endangered by polluting agents. In Klaten,
Central Java, and Yogyakarta, waste water from Batik coloring
was treated properly, and advise was given not to be thrown
directly into the river. This was also done by the home-workers
in Malang for waste water from “mendong” colouring
used in hand woven floor mats.
- Pursuance of fair price
This has not been an easy task to undertake.
Home-workers groups in the garment industry of Tulungagung,
embroidery in Sidoarjo and thread-based product in Pasuruan,
East Java have been powerful in fighting for fairer price.
This was done through improvement in product quality. From
the experiences of home-workers from Sidoarjo, with the collapse
of traditional industry utilizing embroidered sewing machine,
only those who are skillfull to produce the finest embroidery
were able to maintain orders from a haute couture boutique
with piece rate equivalent to minimum wage or a little over
it. However, when compared with the product’s price
sold in boutiques, labor price was still considered unfair.
Dialogue and negotiation between individual
home-workers and the employer will only be possible when both
undergo training on lobbying. Again, this will not be easy
for women home-based workers who have been dictated by gender
ideology “not to confront” and “must obey”
attitude.
- Respect and good acceptance of local culture
Globalization has devastated cultural identity
and tradition. Development has been dictated by modernization
and westernization. Against the strong wave of cheap second
hand clothing, the women embroiderers of the Moslem Tunic
and the batik based garment producer persistently keep the
production going. Search of market to absorb the product should
be done seriously at all possible market levels beyond the
retail shop. For example an alternative market is sought for
embroidered batik uniforms in offices, schools, religious
groups, women’s organization, etc.
In the food industry to stop the consumption
of Western Chiky snacks food, etc introduced by the MNCs/TNCs,
the home-workers must keep on producing traditional and nutritious
snacks (which have long been gone, such as palm sugar coated
nuts).
- Public accountability
So far accountability has been advocated
through the related government offices such as Industry and
Trade who are responsible for free trade and globalization.
Support in the form of capital provision to expand business,
skill training and product exhibition for home-workers product
have been obtained
3. Concluding comments
Learning from Indonesian home-based workers it
has been concluded that :
- Free trade issues are identical twin with home-based workers
issues. Thus addressing the home-base workers issues are addressing
in free-trade issues
- However to identify isolatedly the impact of free trade and
globalization requires special studies involving sectors and
selection of geographical areas
- The women home-based workers strongly felt that campaigning
the home-workers issues are easier than campaigning for the
free trade issues.
- Wordings and terminology such as tariff, Multi-National Companies,
trade barriers are not closely grounded within the reach of
knowledge and understanding of simple women home-workers. Unless
it is clearly physically observed by them, as the case of second
hand imported clothes for example, it is not easy to raise awareness
on the issues. Their needs are :
- Easy and simple training modules for the peer training
- Intensive capacity building by NGO partner.
- Toward advocacy at the government level and at the world
level, alliance with NGO partners and Trade Unions concern with
this issues are paramount important.
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