Signing Ceremony of the Trade Unions and Employers’ Associations Joint Commitment and Tripartite Discussion on Common Efforts to Support the Recovery of Indonesia’s Export Oriented Garment/Footwear Sector amid the COVID-19 Pandemic

The Indonesian garment and footwear sectors have been severely affected by the COVID-19 pandemic with a substantial number of factories facing permanent closure as a result of plunging domestic and export demand.

Background


The signing of the joint commitment between employers and workers
The ILO indicates that the Covid-19 crisis has produced an economic and labour market shock, affecting not only supply (production of goods and services) but also demand (consumption and investment). The ILO estimates shows that globally, working hours will decline by 6.7 per cent in the second quarter of 2020, which is equivalent to 195 million full-time workers.

The Indonesian Garment and Footwear sectors have been severely affected by the COVID-19 pandemic with a substantial number of factories facing permanent closure as a result of plunging domestic and export demand. Manufacturing areas in Jakarta and West Java are particularly affected with factories forced to close or reduce their working hours/days, as workers are required to stay home or orders from international buyers are halted or reduced.

Based on May 2020 data from the Indonesia’s Textile Association (API), COVID-19 related restrictions have halted operations (temporarily) of 80 percent of textile and textile product companies in Indonesia. This has affected a large number of workers, primarily women, who were left without any source of income.

More than 130 export-oriented garment factories enrolled in the ILO’s Better Work Indonesia programme1 are affected by COVID-19 PSBB orders or cancelled or suspended orders from buyers. Factories in DKI Jakarta, Banten, West Java, Central Java and Jogjakarta provinces. are affected. The total numbers of workers affected is approximately 130,000. Most of these workers are in furlough, and are seeing their wages reduced, delayed or are in a “’no work no pay’’ situation. Entitlements have been compromised, more than 60,000 workers have struggled to receive their festivity allowance (THR). Better Work Indonesia estimates that between March 2020 and today almost 15,000 workers have permanently lost their jobs.

Occupational health and safety issues continue to be a key concern. The labour-intensive nature of these sectors contributes to a higher risk of contagion and requires specific and intensified measures to be applied by factories.

Indonesian employers and workers believe in the role of social dialogue as a key strategy to mitigate the negative impacts of the crisis. The result of this is the Joint Commitment between Garment/Footwear Trade Unions Federations3 in Indonesia, APINDO, API and APRISINDO amid the COVID-19 Crisis: Collaboration to Protect Safety and Health, Business Sustainability and Welfare of Workers/Labour in the Export-Oriented Garment/Footwear Sectors in Indonesia.

The commitment adopts a collaborative approach to protect safety and health, business sustainability and welfare of workers in the exportoriented arment/footwear sectors in Indonesia. This process benefits from the support of the the global initiative from the International Organization of Employers (IOE), the International Trade Union Confederation (ITUC), and the International Labour Organization (ILO) and global brands to catalyse action from across the global garment supply chain to support manufacturers to survive the economic disruption caused by the COVID-19 pandemic and to protect garment workers’ income, health and employment. This global action also calls for work on sustainable systems of social protection for a more just and resilient garment industry.

Better Work Indonesia (BWI) is an International Labour Organization (ILO) and International Finance Corporation (IFC, part of World Bank Group) programme
which seeks to improve working conditions in the garment and footwear sector by improving compliance with international labour standards and Indonesian
labour law. In parallel, the project promotes productivity and competitiveness of enterprises in Indonesia that are linked to global supply chains, focusing on the
garment and footwear industry in the Greater Jakarta area, West and Central Java.