Promoting Decent Work for All
INDUSTRIAL DISPUTE RESOLUTION CONFERENCE
INTERNATIONAL PERSPECTIVES
3 October 2007
Melbourne
“Industrial Dispute Resolution in
ASEAN Countries: Some Recent Developments”
Alan Boulton, Director
ILO Jakarta Office
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ASSOCIATION OF SOUTHEAST ASIAN NATIONS
 Brunei, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar,
Singapore, Philippines, Vietnam
 560 million people, labour force 282 million
 Wide differences in member countries (wealth, development,
Government systems, etc)
 Major changes in recent years
(new members – Vietnam 1995, Lao PDR & Myanmar 1997,
and Cambodia 1999; financial crisis; market economy;
democracy; competition from China and India, etc)
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RECENT LABOUR MARKET TRENDS IN ASEAN COUNTRIES
 Average annual GDP growth between 2000-2006 was 5.7 per cent
(Cambodia 8.6%, Vietnam 7.7% cf. China 9.9% and India 7.2%)
 Between 2000 to 2006, labour force increased by 35.8 million
or 13.5 per cent (Cambodia 52.8%, Philippines 20%,
Indonesia 11%, Singapore & Thailand  9%)
 Many workers in export-oriented industries
 Healthy productivity growth in ASEAN linked to sectoral shift from
agriculture to industry & services
 Informal economy has remained massive, about 60 per cent
of ASEAN workforce 2006 (Cambodia & Vietnam 80%,
Indonesia 60%, Thailand 53% and Singapore 8.8%)
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SNAPSHOT: ASEAN’S 282 MILLION WORKERS
 If ASEAN’s labour force (ages 15+) consists of
100 workers …






58 are men and 42 are women
47 work in agriculture; 35 in services; 18 in industry
7 are unemployed
59 work in the informal economy
11 live on less than US$1 per day
57 live on less than US$2 per day
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MODERNIZING INDUSTRIAL RELATIONS (1) …
Many developing countries in Asia are improving industrial dispute
resolution as part of the modernization of their industrial relations
systems
Examples include:
 Cambodia – the establishment of the tripartite Arbitration
Council in 2003;
 Indonesia – new Industrial Relations Disputes Settlement
Act 2004 and the establishment of the Industrial Relations Court;
 Viet Nam & China – steps towards developing new
dispute resolution frameworks
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MODERNIZING INDUSTRIAL RELATIONS (2) …
A fair and effective system of industrial dispute
resolution is a pre-requisite for growth and development
Existing systems deficient or unacceptable in new economic and
social environment
Concern about rising tide of labour disputes
Recognition of democratic and labour rights
Concern about investment flows and market access
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MODERNIZING INDUSTRIAL RELATIONS (3) …
Particular challenges faced by developing countries in
modernizing industrial relations
 Background of government intervention
 Adaptation of practices in industrialized countries
 Institutional weaknesses (government, employers and
workers)
 Concern about social and political unrest
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MODERNIZING INDUSTRIAL RELATIONS (4) …
Key issues relate to freedom of association and freedom of
collective bargaining
 Only 4 ASEAN countries have ratified C87 on freedom of
association
 Workers’ organizations are either under government influence
or fragmented with little strength
 Limited experience with and scope for collective bargaining
 Many disputes about “rights”
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RATIFICATION OF ILO FUNDAMENTAL CONVENTIONS
ILO
membership
since
Fundamental Conventions
C29
C105
C87
C98
C100
C111
C138
C182
Brunei
2007
-
-
-
-
-
-
-
-
Cambodia
1969
1969
1999
1999
1999
1999
1999
1999
2006
Indonesia
1950
1950
1999
1998
1957
1958
1999
1999
2000
Lao PDR
1964
1964
2005
2005
Malaysia
1957
1957
1997
2000
Myanmar
1948
1955
Philippines
1948
2005
1960
1998
2000
Singapore
1965
1965
1965*
Thailand
1919
1969
1969
Vietnam
1980-1985,
1992
2007
1958*
1961
1997
1953
1953
1965
2002
2005
2001
1999
2004
2001
2003
2000
1955
1953
1997
1960
1997
* Malaysia and Singapore ratified Convention No. 105 in years as indicated above, but later denounced their ratification of the Convention.
Forced Labour Convention, 1930 (No.29); Freedom of Association and Protection of Right to Organize Convention, 1948 (No. 87); Right to
Organize and Collective Bargaining Convention, 1949 (No. 98); Equal Remuneration Convention, 1951 (No. 100); Abolition of Forced Labour
Convention, 1957 (No. 105); Discrimination (Employment and Occupation) Convention, 1958 (No. 111); Minimum Age Convention, 1973 (No.
138); Worst Forms of Child Labour Convention, 1999 (No. 182)
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INDONESIA – SOME BASIC FACTS
Population:
GDP growth:
Inflation (CPI):
Labour force:
Open unemployment:
Formal/informal:
Wages (2007):
220 million
5.5% (2006)
6.01% (May 2007)
110 million (2006)
10.4% (2006)
63.8% of those employed work in the
informal/traditional economy (2006)
DKI Jakarta Rp.900,560 (US$98 per month)
Bali Rp.622,000 (US$68 per month)
North Sumatra Rp.761,000 (US$83 per month)
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THE INDONESIAN EXPERIENCE (1) …
Some remarkable progress since 1998
 In democracy
 In recovery from economic crisis
 In labour law reforms
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THE INDONESIAN EXPERIENCE (2) …
Ratification of ILO Conventions
 C.87 Freedom of Association (1998)
 C.105 Forced Labour (1999)
 C.138 and 182 Child Labour (1999 and 2000)
 C.111 Discrimination in Employment (1999)
New Labour Laws
 Trade Union Act 2000
 Manpower Act 2003
 Industrial Disputes Settlement Act 2004
 Migrant Workers Act 2004
Unions
 90 national federations of trade unions (September 2006)
 11,444 trade unions at plant level (September 2006)
 Total membership 3.39 million workers (2006)
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THE INDONESIAN EXPERIENCE (3) …
Potential for labour disputes…
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THE INDONESIAN EXPERIENCE (4) …
Industrial Relations Disputes Settlement Act 2004




Emphasis on bipartite settlement
Mediation by government mediators
Access to private conciliation and arbitration
New Industrial Relations Court at Supreme Court and
District Court level
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THE INDONESIAN EXPERIENCE (5) …
Features of new system
 Continued use of government mediators under regional
autonomy
 Industrial Relations Court comprised of panel of judges
(career judge sits with ad-hoc judges from employers & unions)
 Court has jurisdiction to adjudicate on “rights” and
“interests” disputes
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THE INDONESIAN EXPERIENCE (6) …
Experience with new system
 Most disputes settled at enterprise level or with assistance
of mediators
 Little use of private conciliation and arbitration
 Problems with start up of new Court (appointments, resources,
training)
 Significant number of cases at Supreme Court: 213 cases in 2006
and 584 cases to August 2007
 Some disputes involve informal mechanisms (e.g. Ministerial
intervention; parliament; police; etc)
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THE INDONESIAN EXPERIENCE (7) …
Some statistics
Year
Number of
Cases
Number of Workers
involved
2001
174
109,845
1,165,032
2002
220
97,325
769,142
2003
161
68,114
648,253
2004
125
53,326
591,646
2005
96
56,082
766,463
2006
282
595,783
4,665,685
Labour Disputes
Strikes
Working Hours Lost
Year
Labour Disputes
Employment Termination Cases
2001
81
2,160 (85,989 workers)
2002
101
2,445 (114,933 workers)
2003
105
2,394 (128,191 workers)
2004
63
2,386 (123,929 workers)
2005*
92
1,784 (66,604 workers)
2006
188
5,615 (67,782 workers)
*As of October 2005
** Labour disputes are disputes over normative and non-normative rights
such as wages, overtime, bonus, trade union, transport and meal allowances, uniform, employment status, etc.
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THE INDONESIAN EXPERIENCE (8) …
Dispute Settlement Officials (September 2007)
Officials
Mediators
Conciliators
Arbiters
Total
1,084
230
64
Ad hoc Labour Judges
228
Career Labour Judges
101
Ad hoc Labour Judges at the Supreme Court
8
Career labour Judges at the Supreme Court
20
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THE INDONESIAN EXPERIENCE (9) …
Some challenges
 Understanding of collective bargaining and new system
 Support through labour administration (e.g. inspection and
mediation services)
 Problems in establishing new institution (including issues
relating to jurisdiction, workload, expertise and practice of courts)
 Proper role for police
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THE INDONESIAN EXPERIENCE (10) …
The ILO has assisted the labour law reform process and
the operation of the new industrial relations system mainly
through two projects:
ILO/USA Declaration
Industrial Relations Project
ILO/USA Declaration
Police Training Project
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THE INDONESIAN EXPERIENCE (11) …
Some specific needs identified
 Promotion of bipartite cooperation and dispute settlement
 Improved inspection and mediation services
 Training (parties, mediators, judges)
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IMPROVING DISPUTE RESOLUTION IN ASEAN COUNTRIES (1) …
Indonesia’s experience in introducing new dispute resolution system
highlights some of the challenges in developing countries in Asia:
 Experimentation with new institutions (Cambodia, Indonesia) within
model of government mediation services and adjudication by
independent body
 Weakness in labour administration and capacity of parties
 Building and maintaining respect for new institutions (e.g. Philippines)
 Promoting labour management cooperation and an understanding of
collective bargaining
 Defining the role of government and police in new system
 Part of process of promoting harmonious industrial relations and
labour management cooperation to enhance competitiveness and
attract investment
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IMPROVING DISPUTE RESOLUTION IN ASEAN COUNTRIES (2) …
CAMBODIA
 Arbitration Council established in 2003 as independent Forum for
resolution of labour disputes
 Tripartite structure with cases determined by a panel of 3 arbitrators
(from government, employers and unions) selected by the parties
 Collective labour disputes not resolved by a conciliator from
the Ministry of Labour are forwarded to Arbitration Council
 Arbitration Council can resolve “rights” or “interests” disputes
through voluntary mediation and mandatory arbitration
 Parties may opt for binding or non-binding arbitration
 Estimated 68% of cases resolved through pre-arbitral mediation
or through arbitral awards
 ILO/USA/NZ Labour Dispute Resolution Project assisted with the
establishment of the Arbitration Council
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IMPROVING DISPUTE RESOLUTION IN ASEAN COUNTRIES (3) …
VIETNAM (1) …
 Significant number of wildcat strikes in recent years, especially in
foreign-invested enterprises
 1995 Labour Code created new legal framework of industrial
relations (socialist market economy)
 Labour Code grants right to strike & each enterprise has
its own union, although all affiliated to Vietnam Confederation
of Labour.
 Mechanism for dispute resolution under the Code is by
enterprise-level Conciliation Council with recourse to provincial level
Labour Arbitration Council. However, once dispute or strike happens
a joint task force of local Department of Labour officials and
provincial union officials visit the factory and mediate the dispute.
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IMPROVING DISPUTE RESOLUTION IN ASEAN COUNTRIES (3) …
VIETNAM (2) …
 Pressure to reform and improve current dispute settlement system
with revisions to Labour Code Chapter 14 on Settlement of Labour
Disputes in 2006
 Consideration of role for local mediators (not government officials?)
and workers’ and employers’ representatives in Arbitration Council
•
ILO/Norway Industrial Relations Project; ILO Factory Improvement
Project
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IMPROVING DISPUTE RESOLUTION IN ASEAN COUNTRIES (4) …
ASEAN Community is
 Sharing experiences between countries, especially those
with more developed systems (Singapore, Malaysia)
 ASEAN Labour Ministers have established a Working Party to
promote better industrial relations and progressive labour practices
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