Project background

The SCORE project follows the successful model of the Factory Improvement Programme (FIP) that was established by the ILO in 2002 to address labour relations, working conditions and increasing competitiveness. The FIP started with the garment sector factories in Sri Lanka and then expanded using a multi-sector approach in Viet Nam that includes automotive, printing, clothing, footwear, electrical and medical supplies sectors.

Indonesia has been identified as one of the countries to implement the SCORE project. After a series of consultations with relevant stakeholders, it was recommended to implement the SCORE project in the automotive sector. In implementing this project, the ILO will work with UNIDO to revise and implement the capacity building interventions on productivity and environmental management.

Project description

Being more vulnerable to external shocks, Small and Medium Enterprises (SMEs) in developing countries have been finding it difficult to sustain operations due to the global financial crisis and the quality of their jobs is being compromised in the process. The large majority of employment for both women and men is found in SMEs and the key to sustainable economic development that leads to effective poverty reduction lies in competitive and growing SMEs.

Current research is showing that innovations in work organization, continuous workplace learning, good labour-management relations, and respect for workers’ rights are important ways of raising productivity while also promoting decent work. The broad problem that this project will address is how to minimize the impact of the financial crisis by fostering responsible and thus sustainable workplace practices – economic, social and environmental – in SMEs in order to improve their productivity and competitiveness in a manner that contributes to sustainable economic development.

Project strategy

The ultimate beneficiaries of this project are workers and management in Small and Medium sized auto parts manufacturers that have between 50-200 employees. A size where most SME’s start creating a middle management layer and have the necessary capacity to absorb new approaches and methodologies in their operations. The number of SMEs in the auto parts sub sector is estimated to be 1270 (first and second tier suppliers).

In addition to the workers and management in the SMEs, Service Providers and the Mass Media will also be involved in this project to provide training and counseling to the SMEs and to promote good workplace practices in order to increase productivity.

The immediate objective of this project would be:

• Public and private training institutions provide training and advice on productive and responsible business practices to second and third tier suppliers on a sustainable basis;
• Increased awareness and understanding among workers and employers in the automotive supply chain about the link between competitiveness and responsible workplace practices; and
• Training and advisory services replicated to a new supply chain.

Key partners

• All Indonesian Workers Union Confederation (KSPSI)
• Indonesian Trade Union Confederation (KSPI)
• Indonesian Prosperity Trade Union Confederation (KSBSI)
• Indonesian Employers’ Association (Apindo)
• Ministry of Manpower and Transmigration
• ASTRA Foundation