BackgroundTo support its constituents in the garment sector in responding to the impact of the COVID-19 pandemic, the ILO has developed a global development cooperation project with activities to be implemented in Bangladesh, Cambodia, Ethiopia, Indonesia, Lao PDR, Madagascar and Vietnam. Funded by the German Federal Ministry for Economic Cooperation and Development (BMZ), the project introduces and implements a wage subsidy scheme and compensation fund for workers as well as provides necessaries personal protective equipment, soaps and hand sanitizers. The project also organizes vaccination centre for enterprises that enrolled under the Better Work Indonesia (BWI) programme and develop guidelines for labour inspection during COVID-19 pandemic.
According to BWI data, by mid-April 2020, in its 64 out of around 220 member factories more than 110,000 workers are affected with 50 percent on reduced wages, 30 percent on a “’no work no pay”’ scheme, 10 percent on mass annual leave and 10 percent on lay off. Towards 2021, circumstances at factory level have changed. Orders have picked up and most factories are producing at 60 percent to full capacity. As a result, the overall number of workers in furlough has substantially decreased. However, it is undeniable that garment workers have been seriously affected by the crisis and many have permanently lost their jobs.
BWI member factories have generally matured on the implementation of the occupational safety and health (OSH) management system and the establishment of P2K3, consisting of representatives of the management and workers. As a result, these efforts have helped put public health measures in place. Nevertheless, the COVID-19 outbreak has required greater efforts given the nature of the viral transmission that can occur through air, droplets as well as in contact with contaminated surfaces. Among the prevention efforts are mandatory mask-wearing and social distancing, the latter can be a challenge in garment factories due to their labour-intensive nature and the layout of sewing machines that are commonly placed near each other.
The project is being managed by the ILO Country Office for Indonesia and Timor-Leste in collaboration with the ILO’s Social Protection (SOCPRO) department and the ILO's Better Work Indonesia (BWI) programme. The ILO’s BWI programme has been operating in Indonesia since 2011 and works with 215 garment and footwear export factories employing almost 400,000 workers.
ObjectivesThe project aims to not only protect workers and businesses from COVID-19 impacts, but to also build a culture of prevention on OSH in the workplace and strengthen networks among workers and employers in the garment sector
The project focuses on two objectives:
- Strengthening occupational safety and health (OSH) measures to facilitate return to work in acceptable conditions of safety and health after COVID-19 lockdown; and
- Cushioning enterprises against immediate employment and income losses and compensate workers for the loss of income due to COVID-19 by providing wage subsidies and other cash transfers; and to facilitate “back to normality” by maintaining an employment relationship.
As the vaccination has been globally rolled out, the ILO will collaborate with the Indonesian Employers’ Association (Apindo) to help the garment industry especially those in BWI programs in accessing and facilitating the vaccination program from the Government. The target is to inoculate 20,000 doses of vaccines to garment factories that located in Central Java.
Another implementation of the objective is to provide ad-hoc complementary income for approximately 109,500 workers from BWI factories through subsidizing part of reduced wages paid by the factories to the workers (Phase 1). By providing payment of a wage subsidy for approximately 100,000 workers in BWI factories, the project aims to contribute to employment retention and business sustainability during the crisis. Furthermore, by implementing such intervention that is in line with the principles enshrined in international social security standards, it can serve as the basis for development of a public wage subsidy scheme in the social security system of Indonesia.
Phase 1 puts social dialogue as one of the qualifying conditions to enrol in the programme. To be eligible, factories must enter into social dialogue and reach an agreement with their workers on level and duration of the reduced wage. A set of criteria and operational procedures for enrolment to the programme and submission of claim in accordance with certain international social security standards have been developed.
As the situation has been shifted, the ILO and the BWI programme have agreed with the garment sector employers and workers ‘associations to create Phase 2 that aims to provide a compensation fund for workers who have lost their jobs in the period March 2020 - May 2021. This will target approximately 20,000 potential beneficiaries and provide a one-off payment, made directly to qualifying workers.
Programme StrategyIn phase 1, the ILO has developed a detailed design for the wage subsidy scheme. Only factories and workers that have entered into collective bargaining agreements that determine the duration of temporary work stoppage, employees affected, and amount or method of wage payment will be eligible for the scheme.
Employers will be obliged to follow the collective agreements and make wage payments according to the agreement. The project will validate whether employers comply with the collective agreements and payed wages in accordance. The project will reimburse part of the amount of wages paid by employers to employees based on the collective agreement, in the last payroll cycle.
In the phase 2, ILO is working closely with the tripartite constituents in operationalizing the scheme. Factories that participate in the Better Work Indonesia programme, the Indonesian Social Protection Agency (BP JAMSOSTEK), and garment sector trade unions will play a role in identifying and reaching out to workers.
Trade unions in BWI´s programme advisory committee in particular (GARTEKS KSBSI, F SP TSK KSPSI & FSP TSK-SPSI) will have a role in supporting their membership in registering for the scheme. Workers will receive a one-off benefit of IDR 1.200.000,00 (around USD 90) or disburse in total of IDR 1,058,310,000 (USD 72,986.9) on a first-come first serve basis.
As a complement to this, the ILO will set in place a grievance system that workers or those affected by the project can use to raise issues or alert about irregularities. The grievance system will be managed directly by the ILO to ensure a proper distribution of roles, accountability mechanism and avoid conflict of interests.