A Review on Labour Market Information/ Decent Work Indicators in Indonesia

A Review on Labour Market Information/Decent Work Indicators in Indonesia

Diah Widarti

International Labour Organization Jakarta December 2005

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Review on Labour Market Information/Decent Work Indicators in Indonesia

Copyright@International Labour Organization 2005 First published 2005 Publications of the International Labour Office enjoy copyright under Protocol 2 of the Universal Copyright Convention. Nevertheless, short excerpts from them may be reproduced without authorization, on condition that the source is indicated. For rights of reproduction or translation, application should be made to the Publications Bureau (Rights and Permissions), International Labour Office, CH-1211 Geneva 22, Switzerland. The International Labour Office welcomes such applications. Libraries, institutions and other users registered in the United Kingdom with the Copyright Licensing Agency, 90 Tottenham Court Road, London W1T 4LP [Fax: (+44) (0)20 7631 5500; email: [email protected]], in the United States with the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923 [Fax: (+1) (978) 750 4470; email: [email protected]] or in other countries with associated Reproduction Rights Organizations, may make photocopies in accordance with the licences issued to them for this purpose.

ILO International Labour Organization, 2005 “A Review On Labour Market Information/Decent Work Indicators In Indonesia” ISBN 92-2-118405-X (print) ISBN 978-92-2-118405-1 (pdf)

The designations employed in ILO publications, which are in conformity with United Nations practice, and the presentation of material therein do not imply the expression of any opinion whatsoever on the part of the International Labour Office concerning the legal status of any country, area or territory or of its authorities, or concerning the delimitation of its frontiers. The responsibility for opinions expressed in signed articles, studies and other contributions rests solely with their authors, and publication does not constitute an endorsement by the International Labour Office of the opinions expressed in them. Reference to names of firms and commercial products and processes does not imply their endorsement by the International Labour Office, and any failure to mention a particular firm, commercial product or process is not a sign of disapproval. ILO publications can be obtained through major booksellers or ILO local offices in many countries, or direct from ILO Publications, International Labour Office, CH-1211 Geneva 22, Switzerland or from the ILO Office in Jakarta, Menara Thamrin, Level 22, Jl. MH Thamrin Kav. 3, Jakarta 10250. Catalogues or lists of new publications are available free of charge from the above address, or by email: [email protected] ; [email protected]. Visit our website: www.ilo.org/publns ; www.un.or.id/ilo Printed in Indonesia

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FOREWORD

The Medium Term Development Plan for Indonesia has a strong focus on providing employment, combating poverty and improving people’s livelihoods. As such it echoes the wording of the Basic Act from 1945, which in article 27 states that “every citizen is entitled to get decent employment and life”. As part of the United Nations System and in support to the achievement of the Millennium Development Goals, the International Labour Organisation’s global mandate is to promote Decent Work. In line with Indonesia’s medium term strategy, promoting Decent Work for the ILO means to “promote opportunities for all women and men to obtain decent and productive work in conditions of freedom, equity, security and human dignity”.. In Indonesia, the ILO is supporting its constituents (the Government through the Ministry of Manpower and Transmigration, the Labour Unions and the Employers’ Organisation) to promote Decent Work, build on four major pillars: Fundamental Principles and Rights at Work, Employment, Social Protection and Social Dialogue. How can one measure the progress of the Decent Work Agenda? More importantly, what kind of indicators that are available in Indonesian context and represent the four pillars of decent work? Who are the responsible agencies for maintaining labour market information and decent work data base? What is the existing mechanism for coordination to update the data base? These are the issues explored in this working paper. This working paper has been prepared in an effort to determine a set of Decent Work Indicators for Indonesia. The paper has been prepared by Ms. Diah Widarti and covers the issues raised above in terms of measuring, maintaining, coordinating and using such Decent Work Indicators as a basis for policy development. I trust that it will be a useful contribution to adequately measure progress on Decent Work for the women and men of Indonesia.

Jakarta, December 2005

Alan Boulton Director ILO Jakarta Office

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TABLE OF CONTENTS

FOREWORD TABLE OF CONTENTS GLOSSARY

3 5 6

CHAPTER 1 INTRODUCTION 1.1. Background 1.2. Concept and Indicators 1.3. Objectives 1.4. Methodology 1.5. Organization of the Report

9 9 9 12 12 13

CHAPTER 2 DATA COLLECTION AND DISSEMINATION IN INDONESIA 2.1. Legislation 2.2. Responsible Agencies 2.3. Source and System of Data Collection 2.4. Characteristic of Data 2.5. Dissemination

15 15 17 18 26 28

CHAPTER 3 DECENT WORK INDICATORS: DATA QUALITY AND AVAILABILITY 3.1. Consistency and Comparability 3.2. Advantages and Disadvantages 3.3. Decent Work Indicators: Data Gaps 3.4. Implications of Regional Autonomy on Data Collection

29 29 30 30 38

CHAPTER 4 EXISTING MECHANISM OF COORDINATION FOR LABOUR MARKET INFORMATION/DECENT WORK INDICATORS 4.1. Existing Mechanism of Coordination of LMI/DWI in the MOMT 4.2. Linkages 4.3. Challenges

41 41 43 43

CHAPTER 5 CONCLUSION AND RECOMMENDATION 5.1. Conclusion 5.2. Recommendation

47 47 47

REFERENCES

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GLOSSARY

List of Abbreviations and Terms in Bahasa (Italic) APBN BALITFO BAPPEDA BAPPENAS BPS CLA Desa DG DKD DKN DPBH DPD DPN DWI GDP HPH ILO IPK ISCO JAMSOSTEK Kabupaten Kecamatan KILM LFP LMI MOMT NGO PEP

PMT PODES

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State Budget and Expenditure (Anggaran Pendapatan dan Belanja Negara) Board of Research, Development and Information (Badan Penelitian, Pengembangan dan Informasi) Regional Development Planning Board (Badan Perencanaan Pembangunan Daerah) National Development Planning Agency (Badan Perencanaan Pembangunan Nasional) Central Board of Statistics (Badan Pusat Statistik) Collective Labour Agreement Village Directorate General Regional Manpower Council (Dewan Ketenagakerjaan Daerah) National Manpower Council (Dewan Ketenagakerjaan Nasional) Directory of Incorporated Establishment (Direktori Perusahaan Berbadan Hukum, DPBH) Regional Wage Council (Dewan Pengupahan Daerah) National Wage Council (Dewan Pengupahan Nasional) Decent Work Indicators Gross Domestic Product Rights for Forest Exploitation (Hak Penebangan Hutan) International Labour Organisation Permit for Woods Collection (Izin Pengumpulan Kayu) International Standard Classification of Occupation Manpower Social Insurance (Jaminan Sosial Tenaga kerja) District Sub-district Key Indicators of Labour Market (Indikator Kunci Pasar Kerja) Labour Force Participation Labour Market Information Ministry of Manpower and Transmigration (Departemen Tenaga Kerja dan Transmigrasi) Non-governmental Organisation Program, Evaluation and Reporting (Program, Evaluasi and Pelaporan) Backward Community Settlement (Pemukiman Masyarakat Tertinggal) Village Potential Survey (Survai Potensi Desa)

PTKD PTKN PUSDATIN NAKER SAKERDA SAKERNAS SH SIBS SKKR SPSI STKU SUB SUPAS SUSENAS SUSI UN UNDP

Regional Manpower Planning (Perencanaan Tenaga kerja Daerah) National Manpower Planning (Perencanaan Tenaga kerja Nasional Centre of Manpower Data and Information (Pusat Data dan Informasi Tenaga Kerja) Regional Labour Force Survey (Survai Tenaga Kerja Daerah) National Labour Force Survey (Survai Tenaga Nasional) Hotel Establishment Survey (Survai Hotel) Large and Medium Manufacturing Survey (Survai Industri Besar-Sedang) Small and Household Cottage Industry Survey (Survai Industri Kecil dan Kerajinan Rumahtangga) All Indonesian Trade Unions (Serikat Pekerja Seluruh Indonesia) Quarterly Establishment Survey (Survai Triwulanan Kegiatan Usaha) Employee Wage Survey (Survai Upah Buruh) Intercensal Population Survey (Survai Penduduk Antar Sensus) National Socio-economic Survey (Survai Sosial Economi Nasional) Small and Household-Establishment Integrated Survey (Survai Usaha Kecil dan Rumah Tangga Terpadu) United Nations United Nations Development Programme

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CHAPTER 1

INTRODUCTION

1.1. Background Decent work is a broad concept with many aspects. Some of its aspects are much more readily measured than other aspects, which may be reflected in availability of the statistics. Decent work is a fundamental dimension of the quality of life. This is because work is a major part of life in terms of total time, social integration and individual self-esteem. Productive work is the main source of income for the vast majority of people and the driving force for sustainable development. Therefore, the promotion of decent work for all women and men everywhere is the central objective of the International Labour Organization (ILO), which describes decent work as “opportunities for women and men to obtain decent and productive work in conditions of freedom, equity, security and human dignity”.1 Although the relative importance of specific aspects of decent work varies from country to country and from person to person, the concept and the basic elements of decent work are universal. It is believed that decent work is an important contributor to sustainable development, in addition to being an important objective in its own right.

1.2. Concept and Definition of Decent Work2 The concept of “decent work” was launched in 1999, in the Report of the Director-General to the International Labour Conference meeting in its 87th Session. The idea both conveys the broad and various dimensions associated with work today and summarize them in a phrase that everyone can understand. Decent work is elaborated in employment, social protection, workers’ rights and social dialogue components. Decent work applies not just to workers in the formal economy but also to un-regulated wage workers, the self-employed and home workers (see Ghai, 2003).

Employment Employment here covers work that has both quantitative and qualitative dimensions. An important attribute of decent work is that workers should benefit from “remunerative” employment, which is one element in the “quality” of work. It refers to sufficient opportunities for work, remuneration (in cash and in kind), and includes safety at work and healthy working conditions. The range of elements covered by conditions of work may include night work, hours of work, weekly rest and paid leave.

Social security Social security and income security are crucial components associated to each society’s capacity and level of development. Social security serves to meet people’s urgent subsistence needs and to provide protection against unexpected events, and as such is an important aspect of decent work.

1 2

See Anker, R. 2001. “ILO Multi-country database.” ILO, Geneva. This section mainly from the article on Decent Work Indicators by Ghai, D. 2003.

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There are two types of indicator commonly used to assess adequacy of social security, namely (1) public expenditure on social security as a proportion of GDP, and (2) coverage of workers in social security scheme. The first indicator measures the public resources that go into social necessities without mentioning about the effectiveness with which these resources are used, nor does it take into account private schemes for social protection. Nevertheless, it gives an approximate picture of the coverage of social security. The other measure of social security provides information on the proportion of relevant categories of workers protected against different emergencies. Most industrial and transition countries provide protection against these risks for the majority of their working population, in most developing countries however coverage is limited to workers in the formal economy (except for health services).

Fundamental Rights At Work The component of the fundamental rights of workers covers freedom of association, non-discrimination at work, and the absence of forced labour and child labour. The workers’ rights that are of central concern to the ILO since its inception are forced labour, child labour under very bad conditions, discrimination at work and freedom of association. The ILO has developed and adopted a series of international standards defining these rights and their violation, and elaborating on conditions and guidelines to protect and promote them.

Forced labour Modern forced labour can take many forms including slavery-type situations, bonded labour, and prison labour. It can also take the type of compulsory work required for educational, community and state projects. However, provided such labour is imposed with the consent of the people following democratic procedures, it is generally considered acceptable and is quite common. The first ILO Convention on Forced Labour No. 29 was adopted in 1930. The Abolition of Forced Labour Convention, 1957 (No.105), prohibits all forms of forced labour for certain purposes, including political coercion, economic development and as means of racial, social or religious discrimination. Conventions No. 29 and No. 105 apply to workers in all categories.

Child labour Although the ILO has been concerned with child labour issue for a long time, it has only recently attracted a great deal of attention on the part of governments, international agencies, civil society organizations and the media. The very first child labour convention, namely Convention (No.5): the Minimum Age (Industry) Convention was adopted in 1919 in the first year of the existence of organization. The Convention defined the minimum age for work at 14 years and prohibited the use of child labour in all industrial enterprises. The Minimum Age Convention, No. 138, adopted in 1973, continued to link the minimum age for entering the labour force with the minimum school-leaving age. In 1999, the member States adopted the Convention No. 182 on the Worst Forms of Child Labour that calls for the prohibition and elimination “as a matter of urgency” of abuse of children in slavery, prostitution, pornography, illicit drug trafficking and in work endangering their health, safety and morals. Child labour is quite widespread in developing countries. It is estimated that the number of child labour reached at 206 million in 2000 (ILO, 2002). Labour force participation of children may be used to measure child labour. The non-enrolment rate in secondary schools has also been suggested as a complementary measure of participation in labour force by children (Mehran, 2000; Kucera 2001). This generally varies with the level of per capita income.

Discrimination at work Discrimination at work concerns inequality of treatment and opportunity to individuals in their own right or as members of a social group. The ILO’s Convention No. 111 of 1958 on Discrimination (Employment and Occupation) identifies discriminatory acts as in any distinction, exclusion or preference made on the basis of race, colour, sex, religion, political opinion, national extraction or social origin, which has the effect of nullifying or impairing equality of opportunity or treatment in employment or occupation (Article 1, para. 1(a)).

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Discrimination is mostly referred to gender, but discrimination may be referred to other bases. To measure gender discrimination, one may use four indicators such as (a) the labour force participation rate or employment-to-female working age population ratio (b) the unemployment rate (c) differences in earnings (and other benefits) and (d) distribution of skilled jobs. These indicators show disparities between women and men. Such disparities can occur for any reasons that include discrimination, poor-educational background, low skills and productivity (see Anker, 1998). Thus they must be regarded as indirect and approximate indicators of discrimination at work. Employment-to-working population ratios show disparities in work opportunities by sex. The opportunities for men in paid job are generally much greater than those for women. Unemployment rates for men and women are another indicator of gender disparities in work opportunities.

Freedom of association The ILO has long been concerned with the rights of workers and employers to establish their independent organizations in order to defend their interests, to organize joint activities and to participate in negotiations and discussions affecting these interests (ILO, 2000a; ILO, 2000b). Freedom of association as a fundamental human right is retained in key United Nations documents such as the Charter of the United Nations and the Universal Declaration of Human Rights. A number of indicators have been suggested to assess achievement of freedom of association. One of the indicators that can assess the achievement of freedom of association is the number or proportion of workers belonging to organizations concerned with work-related matters. In industrial countries, the most commonly used indicator refers to the proportion of the labour force or wage employees who are members of trade unions, termed as “union density”. In general, the higher the union density, the stronger the defence of workers’ interests in negotiations with employers and the government, and the greater the participation by workers in matters affecting their work. However, according to Jose (2002), union density is not a direct reflection of freedom of association. The extent of trade unionism depends upon historical traditions, political systems and industrial structures and relations. As shown by Ghai (2003) countries that enjoy equal level of freedom of association display great differences in trade union density. The relevance of union density as an indicator of freedom of association is even more limited in developing countries because of the small size of the labour force in the formal economy. This is because the majority of the workers in developing countries are agricultural workers, self-employed and employees in the informal economy, as well as unpaid family workers with jobs that are in lower ladder, more insecure and weaker influence than those of other segments of the working population. Thus they have greater need for organizations of their own for representation, negotiation and the promotion of joint activities.

Social dialogue The component of social dialogue reflects the condition in which workers exercise their rights to present their views, defend their interests and are involved in discussions to negotiate work-related matters with employers and authorities.3 The social dialogue that is closest to relevant parties usually takes place in their immediate working environment. It can occur among the workers themselves and between their representative associations and the representatives of the groups for which they work.

Collective bargaining Social dialogue can promote equity, efficiency and adjustment and therefore may sustain economic progress. It may take place at one of three levels, between employers and employees in relation to terms and conditions of employment; between the management and workers over the functioning of an enterprise; and between social partners and public authorities on social and economic policy. Clearly, the right to freedom of association is closely linked to social dialogue (Ghai, 2003). The indicator used for social dialogue is union members as a proportion of all employees, or the trade union density in a country. In most countries such dialogue takes the form of collective bargaining between the unions and the employers’ organizations, whether at enterprise, industrial or national level, irrespective of whether the enterprise is private, cooperative or state-owned.

3

See D. Ghai. 2003. Decent Work: Concept and Indicators. ILR, Geneva.

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Indicators that can be used to measure the right to collective bargaining are the one that is relating to legal and administrative requirements and another is the outcomes in terms of collective bargaining. With regard to the first indicator, Conventions No. 87 and No. 98 elaborate the international norms on the principles and procedures of collective bargaining, and the Collective Bargaining Convention, 1981 (No. 154), supplements the older Conventions 8. Ratification rates of the relevant ILO Conventions can therefore provide one indicator of collective bargaining. A more effective indicator would be based on examination of the national legislation and evaluation of the various criteria pertinent to collective bargaining. Reports by the ILO and other organizations, such as the ICFTU and human rights bodies, could be additional sources of information. A second type of indicator is based on the extent of collective bargaining that takes place. This is generally measured by the proportion of employees covered by collective bargaining agreements.

Economic democracy Another aspect of social dialogue involves workers’ participation in the functioning of their enterprise, whether in the formal or the informal economy. Workers’ participation may cover a broad field, ranging from representation on the governing boards and management committees to playing an active role in the administration of training and human resource development programmes. There are no simple measures of economic democracy. The ILO provides no specific guidance on worker participation, though the Cooperation at the Level of the Undertaking Recommendation, 1952 (No. 94), and the Consultation (Industrial and National Levels) Recommendation, 1960 (No. 113), sketch out a framework for this purpose. The most appropriate approach to developing indicators in this field should be through detailed country-by-country examination of laws, institutions, procedures and practices relating to the various aspects of workers’ participation mentioned above. A similar approach, though even more difficult to implement, would be needed to assess worker participation in economic undertakings in developing countries. This would examine not only the formal economy but also patterns and mechanisms of participation in other types of employment relations.

1.3. Objectives Overall Objective To provide information and knowledge to policy makers and the social partners so they can develop effective labour market policies.

Immediate Objective To review labour market information mechanism in Indonesia as the basis to enhance the mechanism of coordination of data collection for DWI database

1.4. Methodology To achieve the objective the method used is to conduct · Reviews on documents of labour market information in Indonesia · Visits to the relevant agencies to examine the existing linkage within the MOMT and between central and regional offices on labour market information in particular of decent work indicators. · Interviewing the concerned parties

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1.5. Organization of the Report The report consists of five chapters. The first chapter, an introductory part, presents background, concept and indicators, objectives, methodology and organization of the report. The second chapter deals with data collection and dissemination in Indonesia including the legislation that regulates data collection and dissemination as well as the agencies that are responsible. The third chapter discusses decent work indicators in terms of data quality and availability. Chapter four deals with the existing mechanism of labour market information particularly decent work indicator within the Ministry of Manpower and Transmigration. The last chapter draws conclusions and recommendations.

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CHAPTER 2

DATA COLLECTION AND DISSEMINATION IN INDONESIA The chapter discusses data collection and dissemination in Indonesia regarding labour and employment particularly related to decent work indicators. The discussion concerns the legislation concerning data collection and the agencies that are responsible for such functions. The last section deals with sources and system of collection and dissemination, followed by the section on sources and data characteristics.

2.1. Legislation Act on Statistics in Indonesia The Act of Republic of Indonesia No. 16, 1997 on Statistics stipulates that statistical activities should do the following: (a) Supporting national development; (b) Developing a reliable, effective and efficient national statistics system; (c) Increasing public awareness of the significance and function of statistics; and (d) Supporting the development of science and technology. To implement statistical activities the government appointed the Central Board of Statistics (Badan Pusat Statistik, from here on this agency would be referred to as BPS), which is under and directly responsible to the President. This agency has regional representatives vertically. The BPS is responsible for basic statistics collection.4 Basics Statistics are statistics utilized for a broad range of both government and community purposes, which have cross sectoral characteristics. Basic statistics are on a national and macro scale, and will be the responsibility of BPS. The coverage of basics statistics includes statistics in economic field, social welfare area and others, which either have been developed or will be developed by the BPS. The Act states that data collection methods of the statistics are collected by census, survey, compilation of administrative products; and other methods in keeping with developments of science and technology. The census referred here to be conducted every ten years and consist of a population census, agricultural census, and economic census. While for surveys to be conducted periodically or at any time in order to obtain detailed data. Compilation of administrative products to be collected by utilizing various documents from administrative records and to be owned by government institutions yet will be available for public utilization unless prevailing legislation specifies otherwise. However, even though the Act states that “… every individual will have an equal opportunity to access the compilation of administrative products owned by a non government institution, an organization, an individual or another part of the community but must maintain regard for the legally protected rights of an individual or an institution……” sometimes the information is not freely shared nor disseminated within a timely manner to all that may require or request access. 4

Statistics, as stipulated in the Indonesian Act No. 16 of 1997, are distinguished into basic statistics, sectoral statistics and administrative records. Basic Statistics can be obtained through censuses, surveys, compilation of administration products, or other methods regarding to science and technology development. It can be conducted periodically, continually or at other time reference which is defined by the Chief of BPS regarding to the data requirements, and can be managed centralized, decentralized, de-concentration (funded by central office but implemented in the regions), or the combination of them regarding to the quality of the data.

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Regarding sectoral statistics, Article 12 of the Act No. 16/1997 stipulates that a government institution will collect sectoral statistics in accordance with the scope of its duties and functions, either independently or in cooperation with the BPS. When collecting sectoral statistics, the government institution will obtain data by survey, compilation of administrative products; and other methods in keeping with developments in science and technology. Sectoral statistics must be collected in cooperation with the BPS when the statistics can only be obtained by census and need to be collected on a national scale. The results of sectoral statistics activity when carried out by a government institution on its own must be submitted to the BPS.

Fundamental Principles In carrying out its mandate on official statistics the Indonesian government follows 10 principles in accordance with the Fundamental Principles of Official Statistics of the United Nations Statistical Commission,5 namely

Relevance, impartiality and equal access Official statistics provide an indispensable element in the information system of a society, serving the government, the economy and the public with data about the economic, demographic, social and environmental situation. To this end, official statistics that meet the test of practical utility are to be compiled and made available on an impartial basis by official statistical agencies to honour citizens’ entitlement to public information. 2. Professional standards and ethics To retain trust in official statistics, the statistical agencies need to decide according to strictly professional considerations, including scientific principles and professional ethics, on the methods and procedures for the collection, processing, storage and presentation of statistical data. 3. Accountability and transparency. To facilitate a correct interpretation of the data, the statistical agencies are to present information according to scientific standards on the sources, methods and procedures of the statistics 4. Prevention of misuse. The statistical agencies are entitled to comment on erroneous interpretation and misuse of statistics. 5. Sources for official statistics Data for statistical purposes may be drawn from all types of sources, be they statistical surveys or administrative records. Statistical agencies are to choose the source with regard to quality, timeliness, costs and the burden on respondents. 6. Confidentiality Individual data collected by statistical agencies for statistical compilation, whether they refer to natural or legal persons, are to be strictly confidential and used exclusively for statistical purposes. 7. Legislation The laws, regulations and measures under which the statistical systems operate are to be made public. 8. National coordination Coordination among statistical agencies within countries is essential to achieve consistency and efficiency in the statistical system. 9. Use of international standards The use by statistical agencies in each country of international concepts, classifications and methods promotes the consistency and efficiency of statistical systems at all official levels. 10. International cooperation Bilateral and multilateral cooperation in statistics contributes to the improvement of systems of official statistics in all countries. 1.

Unfortunately, both in the fundamental principles and its practice there is no mention of the timeliness of release.

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See Badan Pusat Statistik website www.bps.go.id

2.2. Responsible Agencies As reflected in the previous chapter, decent work is reflected through four components, namely (1) Rights at work (2) Employment, (3) Social protection and (4) Social dialogue. Looking at those components and the indicators covered in each, one may conclude that there are two important agencies that are concerned in the collection and dissemination of labour market information including decent work indicators that is the BPS and the Ministry of Manpower and Transmigration (MOMT). Macro employment indicators may be provided by the BPS as this agency collects and disseminates labour force and employment-related issues. Meanwhile specific indicators such as social dialogue and social protection due to their special issues are obtained from the administrative records collected by the MOMT.

Central Board of Statistics6 The BPS, being a non-department government agency established by the laws and regulations7, is an institution responsible for data collection and dissemination directly responsible to the President. The function of BPS is as the following. Š To provide data to the government, and public. The data is derived from its comprehensive statistical activities, comprises of periodic information on structure and growth of economy, social change, and development. Those statistics may be derived from its own researches and surveys as well as from other government Ministry as secondary data. Š To assist statistics divisions of government Ministries and other institutions, in developing statistical system, needed to setup work program and periodic reporting scheme. Š To develop and promote standards to be incorporated in the implementation of statistical techniques and methods, and to provide necessary services in the field of education and training in statistics. Š To establish cooperation with international institutions and other countries for the benefit of Indonesia’s statistical development. With its functions, BPS collects various data and information including employment.

Ministry of Manpower and Transmigration The working unit within the MOMT that is responsible for data collection and dissemination is the Centre for Manpower Data and Information (PUSDATIN NAKER). This centre is under the jurisdiction of the Board of Research, Development and Information for Manpower and Transmigration. The function of the centre by regulation is to carry out the management, presentation, dissemination and service of manpower data and information (covering data and information on training, placement, labour standards supervision, industrial relation, labour productivity and manpower planning as well as general employment issues) through its activities: Š Š Š Š

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Formulation of programs of management, presentation, dissemination and service of manpower data and information Collection, establishment of database, and manpower data and information processing Analysis, presentation, dissemination and service of manpower data and information Coordination of program implementation in the management, presentation, dissemination and service of manpower data and information According to the previous Act No. 7 of 1960 on Statistics, it was named Central Bureau of Statistics (CBS), which then was lately changed to Central Board of Statistics. Law Number 16, 1997 on Statistics and other legislations; Government Regulation Number 51, 1999 on Statistics Undertakings; Presidential Decree Number 166, 2000 on Status, Task, Function, Authority, and Organizational Structure of the Non-Ministrial Government Institution; Presidential Decree Number 178, 2000 on Organizational Structure and Task of the Non-Ministrial Government Institution; Presidential Decree Number 163, 1998 on College for Statistics; Executive Act Number 001, 2001 on The Organization and Task of the BPS; Executive Act Number 101, 1998 on The Organization and Task of College for Statistics.

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Services provided by the Centre of Manpower Information are aimed Š To provide data and information either in off-line or on-line manner for policy makers, technical operators and public Š To facilitate information service to government and public as well as other users Š To increase the facilitation of data and information transaction in on line manner, Š To integrate manpower data and information, and Š To develop network of management for information in the central (internal and cross- sector) and regions.

2.3. Source and System of Collection Employment and labour-related data in Indonesia are originated from censuses, surveys, or administrative records. The details of those undertakings are as the following.8

Census Census is a data collection method which is conducted by enumerating all population units throughout the country to obtain the characteristics of the population in a certain time. Census in Indonesia includes population census, agriculture census and economic census. Data on employment is included in population census. Population censuses in Indonesia are conducted every ten years to collect general information on the population with one block focusing on the labour force and employment structure. Between census years, an inter-censal population survey (SUPAS) is conducted to meet the needs for more frequent data. For comparability with census data, SUPAS adopts the same questions included in the sample census.

Agricultural Census (ST) The Agricultural Census uses both households and establishments as units of enumeration. Since economic activities of the majority of the population are in agriculture, data are mainly collected from households, although some are also collected from establishments. With many different sub-sectors and different commodities, data collection in the agricultural census is highly complex. Moreover, regular household agricultural activities must be separated from economic activities in agriculture for living and only the latter need to be included in the agricultural census. Data collection from agricultural establishments is also complex, but much easier than from agricultural households, since the definition of agricultural establishment is clearer and the number of such establishments is manageable. The agricultural census was conducted in 1963, 1973, 1983, 1993 and 2003. Agriculture provides the largest employment opportunities in Indonesia although that of low living standard. The agricultural census was organized into several data collection phases aiming at capturing activities of sub-sectors and covering areas important to government programs. The Census basically consists of two parts. First is the complete data collection covering agricultural establishments, village cooperative units and the “Village Potential Survey” (separate section is presented). The second part is the “sample census” of agricultural households, land-holding farmers and the “sub-sector agricultural households”. Employment data are differentiated by gender, education, whether administrative staff/field workers/ factory workers, whether managers/assistants/ regular employees, and whether permanent or temporary workers (monthly or daily workers). As part of the cost structure, wages and salaries and other income components are collected by type of employee. Similar employment data are collected in other establishment censuses covering (1) Industrial plants (2) Wild Animal Culture and Nature Tourism (3) Possesses Rights for Forest Exploitation (HPH) and Permission for Woods Collection (IPK) (4) Big and Small Cattle and (5) Fishery. 8

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This section is heavily based on Hananto Sigit, 2000. “Employment data in Indonesia.”

Surveys Survey is a data collection method which is conducted by enumerating a sample to predict the characteristics of the population. Survey can be either ad-hoc or regular in nature. Ad-hoc surveys are especially conducted to capture and monitor the social and economic impacts of the economic crisis in response to concerted efforts to minimize these impacts. Regular surveys are distinguished into three categories, namely household, establishment and community data surveys depending on their unit of enumeration.

Household surveys In the household surveys respondents are individual household members. This type of survey exists in the undertaking of the population census, the inter-censal population survey (SUPAS), the national labour force survey (SAKERNAS), and the national socio-economic survey (SUSENAS). Detailed individual data in terms of demographic, socio-economic and employment characteristics as well as general information on either the establishment or the place of work are available in household surveys. Information on the worker’s household is also present in such surveys.

BPS conducts four types of household surveys in regular manner; they are population census, SUPAS, SAKERNAS, and SUSENAS. Although these surveys used the same basic concepts and definitions of employment in which one would expect that the results would be comparable, in fact employment data from these sources are not comparable. Censuses and SUPAS are designed with the same objective that is to collect general population data and to produce comparable results. Their data however are not comparable with those of SAKERNAS and SUSENAS. SAKERNAS and SUSENAS data are not comparable because they are derived from different types of survey. SUSENAS is a multi-purpose survey, with information collected in many different fields organized in two questionnaires, one questionnaire as a core and another questionnaire as a module. The methodology and implementation of the SUSENAS is very complex. The quality of employment data is greatly affected by the collection of other information. SAKERNAS, on the other hand, is a survey specifically designed for collecting employment data. Thus it should produce the most reliable data. It has been consistently undertaken in August of every year since 1994. SUSENAS provides a rich source of data because it contains far more information. It is even richer than the census or inter-censal population survey. However, it suffers from high variability in the information collected. Another shortcoming relates to employment data contained in the core questionnaire is that questions are limited and are placed following other more dominant questions. Thus despite the benefits derived from the large size of the sample, SUSENAS employment data suffer more from a higher level of instability of the data compared to SAKERNAS. One serious weakness of both surveys is that they cannot be used for short-term comparisons. Maintaining consistency of the questionnaire, the methodology and fieldwork would undoubtedly enhance one’s confidence in conducting serial analysis.

Population Census The Population Census in Indonesia is conducted every ten years. Thus far, five censuses have been undertaken in 1961, 1971, 1980, 1990 and 2000. The past five censuses collected general information on population which allows analysis of the population structure and general socio-economic characteristics. In population census, some important information relates to “economic activities” of the population, that is labour force and employment characteristics are also collected, using the “labour force approach”. The main objective is to provide benchmark data on the labour force and employment every ten years. The questions are less elaborate than those collected in SAKERNAS and SUSENAS, but all important employment questions needed to analyze the labour force and employment structure are included in the census. Before 2000 data collection in the population census was carried out in two parts. First, the so-called a “complete census” that was done to collect basic information such as the names of household members, age, sex and family relationship to household heads as well as housing characteristics and facilities. Its main objective was to produce basic information on the population at the lowest administrative level (villages)

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and to use the information as a frame for sample selection of households that were to be interviewed in the “sample census”. The second part, the “sample census” some detailed questions on each household member were asked. Both parts of the census covered all provinces. Fieldwork of the “complete census” was done in September-October, while that of the “sample census” was conducted in October.9 In the 2000 census the time reference was moved to July in order to improve international comparison, as most countries collect mid-year population in their censuses. In the sample census labour force and employment data are collected, with the sample covering 4-5 percent of households. In 1990, the sample covered approximately 200,000 household. With such a large sample, the information can provide aggregate data down to the regency level. In fact, population censuses are the only source of data which provides employment information for regencies. Detailed tabulations and refined classifications of the data can be provided at higher levels of administrative regions (i.e. provincial and national levels). Such tabulations include the structure of the working age population, characteristics of employment, job seekers, and characteristics of each segment of the labour force, as well as general socio-economic characteristics of the population. The 2000 Population Census is a special case as it was designed to use the limited budget provided by the government optimally in the aftermath of the economic crisis. The budget was not enough to finance the two-stage data collection used in previous censuses. To retain the main objective of the census that is the provision of data for smaller regions, a complete census was necessary otherwise it could not be considered a census. However, funds were inadequate for conducting a reasonable “sample census” for detailed information. A compromise then was formulated whereby selected information were included in the complete census. Therefore, in addition to the basic questions on family structure, the 2000 Census includes one or two questions on fertility, education, migration, labour force and employment.

Inter-censal population survey (SUPAS) SUPAS is conducted regularly halfway between censuses. Its objective is to provide population data which could be linked to those from the censuses. The survey has so far been conducted in 1976, 1985, 1995 and the 2005 SUPAS is underway. The fact is that the Indonesian population changes so rapidly that decennial census will not be able to capture these changes appropriately. However, Indonesia cannot afford to conduct a census every five years, mean while more frequent data are necessary to follow the rapid changes in fertility and mortality as well as migration and labour force characteristics. Thus with this underlying background, SUPAS is to be conducted. Although the sample in SUPAS is large, this is still smaller than the number of households interviewed in a typical “sample census”. However, SUPAS still allows the provision of information for smaller regions which are comparable to those produced by the census. Accordingly, aggregate population trend data are available every five years. To maintain its conformity with census data, SUPAS fieldwork is typically conducted in September-October. Questions in SUPAS are similar to those in the “sample census”. Labour force and employment data collected in SUPAS are also the same as those in the census, thus allowing the measurement of the structure and characteristics of employment and the labour force every five years. In addition, the large sample of households covered in the population census and the inter-censal population survey make them possible in providing employment statistics for smaller administrative regions down to regencies/ municipalities.

National labour force survey (SAKERNAS) SAKERNAS was conducted for the first time in 1976, with the specific purpose of collecting data on labour force and employment. This survey was designed to improve the weaknesses of employment data collected in the 1971 population census. SAKERNAS employed a rigid labour force approach using two reference periods: “current” and “usual”. Since the labour force approach was used for the first time in that year, a comprehensive pilot test by BPS, in close cooperation with MOMT and the ILO, preceded the implementation of the survey. The survey was then conducted once a year in 1977 and 1978, and was designed to obtain serial data to be linked with data from population censuses and SUPAS. It was stopped for a few years and was then resumed annually until 1985. Beginning in 1986, the survey was conducted quarterly to capture the seasonal fluctuations in employment. With the understanding that the Indonesian economy is predominantly agriculture in that employment was most likely to be greatly influenced by 9

20

The census date was October 31 of the relevant year.

agricultural seasons, sectoral employment and other related characteristics would depict the peak and trough seasons in agriculture. SAKERNAS fieldwork is done every year in February, May, August and November. The sample was approximately 20,500 households every quarter in 1992. Quarterly estimates could be merged to produce average information for the year with a total sample of 82,000 households. Quarterly surveys were conducted for 8 years until 1993, but results showed that seasonal fluctuations could not be clearly depicted by the quarterly data, which seemed to be caused by the small size of the sample. With around 20,000 households, only national figures could be produced. With seasons different from region to region, averaging at the national level would produce the same results for every quarter. Without a substantial increase in the sample which would allow the production of regional data, such quarterly surveys would not be useful in describing seasonality at the national level. It was recognized that the construction of average figures for the year that were taken from the quarterly survey was not valuable. This was due to the fact that data did not represent yearly figures with a certain point in time as the reference, but rather an average of four quarterly figures that were not matching with other figures. Another shortcoming of the quarterly version of SAKERNAS was the limited number of questions included that they were only items that are expected to be affected by seasonality. This fact made results difficult to compare with those of other survey. Due to these weaknesses, the quarterly survey was terminated. In 1994 SAKERNAS was conducted yearly with a more detailed questionnaire using a reduced sample size of 65,500 households. Due to budget constraints, in 1998 the sample was again reduced to 49,200 households. In 1999, the SAKERNAS sample was reduced to about 20,000 households and was expected to generate detailed information at only national levels and only aggregate data for provinces. A complete set of labour force and employment data is collected in SAKERNAS. Up to 1999 SAKERNAS was carried out in August on yearly basis. Thus, the survey since then has been done annually. However, starting this year, the implementation for twice a year survey began. The August employment figures from SAKERNAS would be compared to the employment figures from SUSENAS that was conducted in February annually. In this way SUSENAS would manifest employment conditions in the first semester while SAKERNAS would reflect situation in the second semester. Prior to 1998 the working age population was defined as those who were aged 10 years and above. Since 1998 the definition was changed to 15 years and above. The working population is classified into two parts, namely that in the “labour force” and that “not in the labour force”. The labour force consists of those working (“employed”) or looking for work (“unemployed”). For the “employed”, detailed characteristics of their work are collected, including hours worked, branch of economic activity, occupation, status in employment, additional works, wages and salaries, and whether also looking for work. For the “unemployed” the questions include methods and duration of job search, whether looking for part-time or full-time work, whether previously working and terminated from their work during the crisis and for what causes, and whether recently found a job. Socio-demographic data that are collected include age, gender, education and marital status.

National socio economic survey (SUSENAS) SUSENAS is a multi-purpose household survey. The first SUSENAS was designed and launched in 1963 by the Statistical Research and Development Center (StRDC).10 The main objective of SUSENAS was to collect data on demographic and socio-economic household characteristics. After 1963 the survey was conducted regularly in 1964/1965, 1967, 1969 and 1970 with samples between 16,000-24,000 households. In all these surveys, labour force data were collected together with demographic and socio-economic data as well as consumption expenditure. The survey temporarily stopped in 1971 with the termination of StRDC and resumed again in 1976 with the funding from the government. In 1976 SUSENAS was conducted on quarterly basis to collect data on detailed consumption expenditure. To get seasonal consumption fluctuation the survey was implemented in four quarterly rounds. Labour force and employment data were only collected in the fourth quarter of 1976, where the sample was enlarged to 78,000 households compared to only 17,000 households in each of the previous quarters. This quarterly survey was repeated in 1978 with a sample of only 6,300 households per quarter.

10

A United Nations organization created to assist statistical development in BPS

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The 1978 SUSENAS included more topics, including labour force and other demographic, socio-cultural and health data, as well as data on consumption expenditure and income. In 1979 and 1980 the survey was conducted twice each year with samples between 54,000-102,000 households to accommodate new modules. The new modules included fertility, handicraft/cottage industry, agriculture and livestock. Labour force data were only collected in the second semester of 1980. In 1981 SUSENAS was again conducted in quarterly basis using a sample of 15,000 households per quarter and with no questions on the labour force. Labour and employment was incorporated again in 1982 with a separate sample of 60,000 households. Since then the labour force module was taken out of SUSENAS and fully integrated with SAKERNAS. Consequently, the biannual 1998 SUSENAS and the yearly SUSENAS of 1985-87 and 1989-91 did not contain any labour force module. Beginning in 1992, SUSENAS was organized into two questionnaires namely a new core and a module. The design of the new SUSENAS makes it possible to link modules through the core questions. For example, through the labour force and expenditure categories in the core, labour force characteristics in the module could be linked to the structure of expenditure in the module. It was considered important to include selected basic items on expenditure, causes of deaths, health, breast feeding, immunization, education, channels of communication, fertility level, family planning methods, housing materials and facilities, as well as economic activities. The economic activities incorporated basic questions on the labour force and employment. Some limited questions enabling the construction of labour force structure, those working and those looking for work. For the employed the questions asked are hours worked by industry and by status in employment. In 1992 the sample size for the core questions was 65,600 households, which enabled estimation at national and provincial levels. From 1993 until recently it was enlarged to 202,000 households to enable estimation at the regency/municipality levels, while the sample size for the module is 65,600 households all along. With different modules, there must be a frame for sample selection for the module data collection. This is provided by households interviewed with the core questions comprising selected questions from the modules. From this frame a sub-sample of the core households is selected for a particular module. Accordingly, modules can be interconnected through the core questions. Therefore, from SUSENAS of 1992 through 1995 only limited data on employment are available. Despite the benefits obtained from a multipurpose survey, where a very rich information base can be obtained, the system became very complicated. The labour force and employment module tended to be less accurate compared to the specialized labour force survey. Moreover this system made it impossible to design the same questionnaire as the one used in SAKERNAS. After the 1997 economic crisis, SUSENAS was redesigned to simplify its operation. Only three modules were included. The first module, consumption expenditure is collected every three years. The second module, general information for the welfare indicators is conducted every year. The third module that was collected every year covers labour force and employment and is designed to be comparable to the data from SAKERNAS.

Establishment surveys BPS conducts several establishment surveys that contain data on employment. Most of these surveys usually collect data on production cost, input and output structure, capital formation, as well as information on business operation. Employment data are usually collected as part of the information on cost structure. Participation in the government development programs may be asked from small and household establishments. This is because there have been many government programs like credits and technical assistance provided to such establishments. Establishment surveys that are currently conducted and containing employment data include: 1. 2. 3. 4. 5. 6. 7. 8.

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Economic Census (Sensus Ekonomi, SE) Directory of Incorporated Establishment (Direktori Perusahaan Berbadan Hukum, DPBH) Quarterly Establishment Survey (Survai Triwulanan Kegiatan Usaha, STKU) Small and Household Cottage Industry Survey (Survey Industri Kecil dan Kerajinan Rumahtangga, SKKR) Small and Household-Establishment Integrated Survey (Survai Usaha Terintegrasi, SUSI) Large and Medium Manufacturing Survey (Survai Industri Besar-Sedang, SIBS) Hotel Establishment Survey (Survai Hotel, SH) Employee Wage Survey (Survai Upah Buruh, SUB)

Some employment data may be obtained from those surveys above. In the case of economic census, three economic censuses were done so far in 1976, 1986 and most recently in 1996 with the aim to collect data on all economic establishments outside agriculture. Agricultural establishment data are collected separately in the agricultural census and surveys. The 1996 Census was conducted in stages starting in the beginning of 1996 and attempted to integrate all establishment data collections in BPS. A limited set of information was collected from all establishments, including large, medium, small and micro establishments. Like in many other establishment surveys, employment data were collected as part of information normally collected from establishments including: identification and location, main activity, type of product, establishment status, value of assets, value of production, total earnings, and number of workers differentiated between permanent and temporary workers. The unit of enumeration in establishment surveys is an economic establishment.11 The respondent is usually the relevant officers who will fill out the questionnaire. Usually only cost accounting and related economic data referring to the establishment are collected. Although individual information on employees cannot be collected group characteristics of employees may be included in the survey. For example, information on the number of employees classified by gender, education and permanent/temporary workers may be available. Employee data can be related to information on establishment cost, capital and output. These data can be segregated by gender, marital status, age group, education, and occupation group. Relating employment data to other costs of production makes the analysis of cost structure possible in order to see whether labour is fairly paid. In addition data from these surveys can be used to produce more detailed employment data such as in terms of sub sector and job classification. With household surveys on the other hand it may provide full coverage of all sectors but the sub-sectoral breakdown is limited to the 2-digit ISIC level, meanwhile occupation breakdown of the household surveys allows 3-digit ISCO level.12 Several important establishment surveys in relation to employment are presented below.

Large and medium manufacturing survey (SIBS) This survey is conducted every year. This survey is still routinely conducted every year. It collects more information than what is needed for the directory. The survey covers all large and medium manufacturing establishments. Detailed information on the establishment includes production cost, outputs and services performed, power generation, investments, capital and assets. As part of production costs, expenditure for employees is collected in detail, separating between production and non-production workers. Components of expenditures include wages/salaries, pension contributions, insurance and other allowances. Coverage depends a good deal on the completeness of the directory, which is updated regularly to add new establishment and remove those that closed down.13 The survey produces information for smaller sub-sectors of the manufacturing sector, up to the five-digit ISIC level. The response rate is about 85-90 percent. As the survey covers a substantial number of establishments and the long questionnaire to be filled out, publication lags considerably behind.

Hotel establishment survey (SH)14 The hotel establishment surveys are carried out monthly covering all provinces in Indonesia. There are two types of hotel surveys conducted, first the one covering stock taking and the second one concerning room occupancy. The stock taking survey aims at constructing a hotel directory covering all classified and non-classified hotels. This survey has been conducted every year since 1978. Stock taking survey collects data on the number of rooms and beds, room rates, and distance from airport, bus terminals and train

11 12 13 14

Establishment is defined as the smallest economic unit conducting a business activity by financing the production of goods and services and selling them for profit or for earning. However, one should bear in mind that 2 and 3 digit occupation classification data are not very reliable and seldom used. This is because both the interviewers and respondents are not able to interpret appropriately the detailed occupational classification. A new system of directory updating was applied for Java in 1991 and outside Java in 1992. It checks the list of establishments with recent sources from other Ministries, and the unmatched establishments are checked in the field to make sure they exist. Collection of statistics for the hotel sector is based on recommendations of the World Tourism Organization (WTO) which relies on “accommodation statistics.”

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Review on Labour Market Information/Decent Work Indicators in Indonesia

stations, as well as hotel facilities. In the past three years employment data have been grouped into more detailed classifications by gender, citizenship, type and level of education, as well as by status (paid/unpaid). The room occupancy rate survey started in 1980 and covers all classified hotels and a sample of nonclassified hotels with at least 10 rooms. This survey is conducted monthly to collect data on number of rooms, beds, number of rooms occupied, foreign and domestic guests. It is useful to calculate occupation rate, average length of stay, number of foreign and domestic guests and average number of guests per room. Like the large and medium manufacturing survey, these hotel surveys are continuously undertaken, and are also meant to support the updating of the directory of incorporated establishments. All hotels, including the non-classified ones (hotel melati), are included in the directory since the operation of hotels must be legal and licensed by the tourism office of the provincial governments.

Employee Wage Survey (Survai Upah Buruh) The employee wage survey began in 1979 in order to collect detailed information on wage development and structure, including distribution by occupation. However, the coverage in terms of economic sectors is limited. It covers only non-oil and gas mining, manufacturing, hotels and land transportation. It was simplified in 1992 by dropping the question on wage by occupation and dropping the land transportation sub-sector as well. Only average and median wage of workers under the rank of supervisor were collected. The sample size was also reduced. The survey is conducted quarterly to enable to monitor changes in wages. Three provinces (Bengkulu, East-Timor and Central-Sulawesi) were not covered in this survey. Fieldwork was undertaken quarterly in March, June, September and December every year. Only 35 establishments were included in the sample of non-oil and gas mining industry, while for the manufacturing industry 667 large and 342 medium establishments were included. Small establishments were not represented. Wage data collected were the payments to production workers lower than a supervisor. Wages were broken down by establishment size, gender, sub sector and capital ownership whether it is foreign, domestic or government owned.

Community Data Surveys Community data surveys provide village data collected from village officials. Similarly to establishment surveys, employment data in community data surveys are collected indirectly through local informants. These informants provide data for particular small administrative areas (villages or sub-districts) as the units of enumeration. Accordingly detailed household and individual employment cannot be collected. In fact community data are confined to far more aggregated information than those obtained from establishment surveys. Only one survey is conducted regularly by BPS, the “Village Potential Survey”.

Village Potential Survey (Potensi Desa/PODES) PODES was first introduced in 1976. Since 1980 the survey has been regularly conducted as part of a big data collection effort, such as censuses and SUPAS and usually carried out one year prior to the big undertaking. It is more efficient financially to conduct PODES as part of a larger national data collection since during mapping or listing all villages are visited. Nevertheless, in mid 1994 and 1995 Core PODES undertaking was carried out without being integrated in the census. This PODES at that time was intended to determine the backward villages. PODES covers all villages. In 1990, for example, there were 67,515 villages. The 1993 PODES was conducted as part of the agricultural census and in 1996 as part of the economic census. The 2006 PODES was conducted as part of the economic census of 2006, conducted in April 2005. The coverage of 2006 PODES (as the part of the 2006 Economic Census is all villages/kelurahan or similar in Indonesia including transmigration settlement units and backward community settlements Pemukiman Masyarakat Tertinggal (PMT). Respondents of PODES are village heads, staffs assigned for responding to the questionnaire or relevant resource persons. The method of PODES data collection is based on complete enumeration through direct interview by interviewers. Employment data in the PODES however, is very limited. Such employment-related information only includes percentages of households engaged in agriculture, manufacturing, trade, services, and others.

24

Administrative records Another source of employment data is administrative records. The Ministry of Manpower and Transmigration (MOMT) keeps records of employment and labour related data, but usually many of the data are not processed and published. The types of data are usually depending on the function of the working units. For example, “job vacancies” and “job seekers” are data that are reported by the Directorate of Manpower Placement as an effort to facilitate labour market function. The Ministry also keeps records of employment created through government labour intensive projects (public works programs). The records are only kept for internal use. The MOMT keeps records on Indonesian working abroad. Unfortunately as many Indonesian who work overseas are illegal, the MOMT can not provide reliable data on overseas workers. Regarding the registered job openings and people seeking work, the coverage of this segment of the labour market is small, since not all establishments offering job openings register with MOMT. In fact, most of them usually advertise their job vacancies publicly to reach a wider pool of job seekers. Although the law15 stipulates that company should report if there would be any employment change meaning the potential job vacancies with the MOMT, in reality only mass recruitment is usually reported to the Ministry and not all companies comply with the regulation. Another problem with this source of data is that not all documents are processed, limiting further their usefulness for market-wide analysis. Moreover, companies generally shy away from MOMT, because of its complex bureaucracy. Also highly qualified job seekers seldom register with MOMT; they prefer to apply directly to the desired companies. The MOMT has been running different employment-related development programs and by law they are required to maintain the records. Although the degree of availability and consistency of the MOMT such data are not systematically processed to generate regular statistics, if such data are processed, maintained and recorded properly they would be very useful to policy makers and other users.

15

See the Act No. 7 of 1981 on “Obligation of Manpower Reporting in Enterprises”

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2.4. Characteristics of Data Frequency In line with the Indonesian government legislations, Population Census and Inter-censal Population Surveys are conducted every ten years. Other surveys such as SAKERNAS (1976, 1986, to 1993) are held quarterly or SAKERNAS (from 1994 onward) and SUSENAS are on yearly basis. Starting this year, 2005 the SAKERNAS is conducted on semester basis.

Coverage Population censuses (PC) In the 1971 population census the number of household selected for “sample census” were about 3.8 percents of the population. Those who were living in East Timor and isolated areas in Papua were excluded. In 1980 and 1990 the same information were collected from 5 percent of total households or about 2 million households.

Intercensal populaton survey (SUPAS) In the first intercensal population survey which was held in 1976, there were about 60,733 households included covering 26 provinces. The second SUPAS which was held in 1985 covered about 125,400 households. The third SUPAS which was held in 1995 covered about 206,848 households from all geographical areas in Indonesia.

National labour force survey (SAKERNAS) The SAKERNAS began in 1976. As the first labour force survey conducted by BPS, this survey was a baseline, especially in questionnaire design which was mostly used for another similar surveys. The following SAKERNAS were conducted in 1977, 1978, and 1986 to 1994. East Timor was excluded from the first two surveys. The number of households which were covered in each period of the survey varied as follows: Š Š Š Š Š Š Š

1976 1977 1986 1994 1997 1998 1999

covered about 95,400 households and 1978 SAKERNAS covered about 71,550 households to 1993 SAKERNAS covered about 65,490 households SAKERNAS covered about 65,524 households SAKERNAS covered about 65,664 households SAKERNAS covered about 49,248 households SAKERNAS covered about 48.576 household

National socio-economic survey (SUSENAS) SUSENAS basically aims to collect data on socio-economic condition of people in Indonesia. However, the information regarding labour force were also collected, especially in the 1982 SUSENAS when labour force was intended to be the main module. In 1982 SUSENAS were conducted in all provinces (27) and covered 60,400 households. Started from 1992 onward (at least until 1995) the number of households selected was enlarged to 206,076 in the hope that from this large survey, parameters for smaller areas (regency instead of province) can be estimated.

Timeliness As SAKERNAS is the most important survey for employment and labour data, it is clear that the timeliness of this survey is very crucial. The time lag between data collection and publication of the SAKERNAS survey is about six months, sometimes beyond this duration.

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To monitor the dynamic of employment and particularly unemployment, timeliness and frequency of data generation are necessary. This is the reason that this year BPS begins to conduct SAKERNAS on semester basis. It is also important for BPS to shorten this time lag in order to make use the best of it.

Variables Table 2.2. provides information of the variables collected in the census or survey. Despite the richness of the variables gathered in the surveys or censuses, tabulations by age and sex are limited. Table 2.2. Variables Collected in Population Census, Inter-censal Population Census, National Labour Force Survey and National Social Economic Survey VARIABLE

POP CENSUS

SUPAS

SAKERNAS

SUSENAS

Sex Marital status Relation to household head Educational attainment Main activity status during previous week Working at least one hour during previous week Temporarily not working during previous week Has ever worked Workdays/work hours of all jobs Occupation of the main job Industrial class of the main job Employment status of the main job Work hours of the main job Work hours of the main job Workdays of the main job Average wages/salaries Seeking work Availability for work Steps taken in seeking work Length of time in seeking work Type of job sought (part/full time) Additional jobs Workdays/work hours of all additional job Industrial class of the main additional job Reason for not seeking work Has worked during the previous year Industrial class of job during previous year

+ + + + +

+ + + + +

+ + +* + +

+ + + + +

+

+

+

+

+

+

+

+

+ + + + + + + + + -

+ + + + + + + + + + + + + +

+ + +* + + + + + + + + + + + +* -

+ + + + + -

+

+

-

-

+ +

+ +

-

-

+

+

-

-

Note : *). Not Covered Before NLFS 1994 (Quarterly NLFS) Source: www.bps.go.id

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2.5. Dissemination Generally, BPS publishes the results of their undertaking and the publications will be sent to relevant agencies particularly to government ministries. Nonetheless, the time period between data collection and dissemination is rather lengthy. It would have been much more useful if this period can be shortened. Public may access to the BPS publications from the library or purchase publications from the BPS book store. Limited tabulations are also presented in the BPS website www.bps.go.id. Special tabulation may be obtained by request with fee. The Centre of Manpower Data and Information of the MOMT maintains a website www.nakertrans.go.id that allows people who needs data and information to access them. Apart from that, the MOMT has issued several publications such as the following. Š Š Š

Profile of Human Resource in Indonesia (annual) Employment Situation in Indonesia (annual) Brief Information on Indonesia’s Labour Market

Although the Centre has produced the annual booklets that cover most of the administrative records kept in the MOMT, somehow on ad hoc basis different working units in the MOMT also produces their own publications. The distribution of the MOMT publications is usually limited for other government offices, but by request other agencies may obtain their publication.

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CHAPTER 3

DECENT WORK INDICATORS: DATA QUALITY AND DATA AVAILABILITY This chapter reviews the quality of employment and labour data in Indonesia as well as the availability of data particularly on decent work indicators. To assess such issues one needs to look at data quality in terms of consistency, comparability, availability and timelyness as well as its advantages and disadvantages. The last part presents the implications of decentralization on data collection and dissemination.

3.1. Consistency and Comparability16 Different sources of employment data might result in generating data that are lack of comparability. Using the same sources of data certainly will be more beneficial in the sense that consistency and comparability of the statistics may be maintained. Comparisons of employment statistics sourced from different sources usually lead to more problems. For instance, employment data from household surveys cannot be associated directly with those from establishment surveys. The most determining factor is that the definition of work is different in those two types of surveys. In household surveys a person is considered “working” if he works for at least one hour in a week. Thus a person who works for at least one hour prior to the enumeration may be categorized as an employed person. While in establishment surveys “employed person” is of a person that is not only defined as working in the company but also that person is on the list of company’s payroll for a certain period of time. One should bear in mind that establishment surveys only cover persons working in establishment. Therefore, those who are working in non-establishments would not be captured in establishment surveys, yet they are captured in household surveys. Apart from that, economic sectors in establishment surveys are determined based on what are the types of product/output. In household surveys on the other hand, economic sectors depend on how the respondents perceive it. Thus sectoral employment levels in household surveys are generally higher than their corresponding sectors in establishment surveys. Moreover, a person who works in more than one establishment may be registered more than once in an establishment survey. Meanwhile, an employed person in household surveys is determined by his/her main job. Despite the above conceptual differences, it is not impossible to reconcile data from these sources. The best way if one of wishes to reconcile, one should start from the beginning at the planning stage. Improvement and simplification of the methodology used in both household and establishment surveys, is needed to produce directly linkable data. It is worthwhile to look at this aspect of data consistency to make the data more useful and applicable.

16

This section is mainly based on Hananto Sigit, 2000. Employment Data in Indonesia.

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3.2. Advantages and Disadvantages Establishment household, and community data surveys have different characteristics among others in terms of type of respondents and type of information collected. Consequently such surveys have their own advantages and disadvantages. In establishment surveys information is provided by the person(s) assigned by the establishment to response to the questionnaire. The answers are mainly based on establishment records. Therefore, the concepts and definitions used in this type of survey should match to those already applied in the establishments. Hence, in this type of survey one cannot ask questions directly related to individual workers. In establishment surveys one should not comply with the definitions and concepts of the “labour force approach”. This is different from household surveys, where specific employment questions are intended to individual household members based on the “labour force approach”. Establishment surveys contain limited data on employees that may be linked to information on establishments’ cost, capital and output. The advantages of these surveys are that they can be utilized to produce more detailed sub-sectoral employment and job classifications. By merging employment data from establishment surveys with those from household surveys one most likely can obtain more detailed subsectoral and occupational classifications. Detailed individual data and worker’s household are available in household surveys. Changing methodology and scope causes a serious disadvantage of both establishment and establishment and household survey that they may not be used for short term comparison. Nevertheless, maintaining consistency of the questionnaire and methodology and if necessary adjustment be made so that the data should be comparable is one way to overcome the problem. These would certainly improve the results for making serial analysis. Last but not least, administrative records are very helpful and indispensable in providing quick indicators for some aspects of the labour market that are not provided by the above surveys. Even though these types of data frequently are incomplete, they remain useful.

3.3. Decent Work Indicators: Data Gaps As we may understand that the DWIs are constructed from the available employment and labour data. Table 3.1 below demonstrates the source and repository of the data for the Decent Work Indicators. Seven out of the 24 indicators are obtained from the MOMT that are originated from government records such as insurance records, or industrial relations reports within the MOMT. The rest, 17 of the Decent Work Indicators are obtained from the BPS mainly from the Population Census, SAKERNAS and to a little extent from SUSENAS (Table 3.1.). It should be noted that as long as it available the indicators are expressed by age and sex.

Table 3.1. Source and Repository of DWI No. DWI-1

DWI-2

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Agency Responsible for Data Collection and Dissemination

Year

Title of Indicators and Information Repository

1990 1999 2003 2004

Non School Participation Rate of Children 7-15 Not available National Socio-economic Survey National Socio-economic Survey National Socio-economic Survey

BPS BPS BPS

1990

Female Share of Employment in ISCO-2 Population Census

BPS

No.

DWI-3

DWI-4

DWI-5

DWI-6

DWI-7

DWI-8

DWI-9

DWI-10

Year

Title of Indicators and Information Repository

Agency Responsible for Data Collection and Dissemination

1999 2003 2004

National Labour Force Survey National Labour Force Survey National Labour Force Survey

BPS BPS BPS

1990 1999 2003 2004

Cases brought to labour court Administrative records Administrative records Administrative records Administrative records

MOMT MOMT MOMT MOMT

1990 1999 2003 2004

Labour Force Participation Rate Population Census National Labour Force Survey National Labour Force Survey National Labour Force Survey

BPS BPS BPS BPS

1990 1999 2003 2004

Employment-Population Ratio Population Census National Labour Force Survey National Labour Force Survey National Labour Force Survey

BPS BPS BPS BPS

1990 1999 2003 2004

Informal Employment Population Census National Labour Force Survey National Labour Force Survey National Labour Force Survey

BPS BPS BPS BPS

1990 1999 2003 2004

Number and Wage of Casual/Daily Workers National Labour Force Survey National Labour Force Survey National Labour Force Survey National Labour Force Survey

BPS BPS BPS BPS

1990 1999 2003 2004

Youth Unemployment Rate Population Census National Labour Force Survey National Labour Force Survey National Labour Force Survey

BPS BPS BPS BPS

1990 1999 2003 2004

Youth Non-activity Rate Population Census National Labour Force Survey National Labour Force Survey National Labour Force Survey

BPS BPS BPS BPS

1990 1999 2003 2004

Unemployment Rate Population Census National Labour Force Survey National Labour Force Survey National Labour Force Survey

BPS BPS BPS BPS

1990 1999

Employment by status in employment and branch of activity Population Census National Labour Force Survey

BPS BPS

DWI-11

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No.

Year

DWI-14

DWI-15

DWI-16

DWI-17

DWI-18

DWI-19

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Agency Responsible for Data Collection and Dissemination

2003 2004

National Labour Force Survey National Labour Force Survey

BPS BPS

1990 1999 2003 2004

Share of female wage employment in agriculture, industry & service Population Census National Labour Force Survey National Labour Force Survey National Labour Force Survey

BPS BPS BPS BPS

1990 1999 2003 2004

Labour Productivity Population Census & National National Labour Force Survey National Labour Force Survey National Labour Force Survey

BPS BPS BPS BPS

1990 1999 2003 2004

Per Capita Earnings National Accounts National Accounts National Accounts National Accounts

1990 1999 2003 2004

Social Security Coverage Insurance records Insurance records Insurance records Insurance records

1990 1993 1999 2000 2003 2004 2005

% Social Assistance to GDP Not available Government Record Not available Government Record Not available Not available Government Record

1990 1999 2003 2004

Occupational Injuries Administrative records Administrative records Administrative records Administrative records

1990 1999 2003 2004

Excessive Weekly Hours of work (>45 hrs) Population Census National Labour Force Survey National Labour Force Survey National Labour Force Survey

BPS BPS BPS BPS

1990 1999 2003 2004

Low pay rate Not available National Labour Force Survey National Labour Force Survey National Labour Force Survey

BPS BPS BPS BPS

DWI-12

DWI-13

Title of Indicators and Information Repository

Accounts & National Accounts & National Accounts & National Accounts

BPS BPS BPS BPS MOMT MOMT MOMT MOMT

Ministry of Finance Ministry of Finance Ministry of Finance MOMT MOMT MOMT MOMT

No. DWI-20

Year

Title of Indicators and Information Repository

1990 1999 2003 2004

Trade Union Membership Administrative reports Administrative reports Administrative reports Administrative reports

MOMT MOMT MOMT MOMT

1990 1999 2003 2004

Number of enterprise belonging to employer organization Administrative records Administrative records Administrative records Administrative records

MOMT MOMT MOMT MOMT

1990 1999 2003 2004

Collective bargaining coverage rate Administrative records Administrative records Administrative records Administrative records

MOMT MOMT MOMT MOMT

1990 1999 2003 2004

Strikes and lockouts Administrative records Administrative records Administrative records Administrative records

MOMT MOMT MOMT MOMT

1990 1999 2003 2004

Economic Growth National Accounts National Accounts National Accounts National Accounts

DWI-21

DWI-22

DWI-23

DWI-24

Agency Responsible for Data Collection and Dissemination

BPS BPS BPS BPS

Ideally there should be a balance between data needs and available resources. Yet, this is not always the case. Data must be thoroughly selected to serve the most urgent needs. Data must be produced in efficient manner in order to come up with the most relevant statistics to meet as required.

3.3.1. Employment Employment and its aspects have long concerned the government of Indonesia, particularly with the launching of the Decent Work National Action Plan in 2003. As mentioned in the previous chapter, decent work covers not only employment creation, but also the components such as rights at work, social protection and social dialogue. This is the reason why decent work indicators are critical to be maintained and up dated in order to monitor the progress of decent work.

3.3.1.1. Structural changes As dictated by the DW agenda, employment, as one of the four pillars of decent work, is a very important component. Therefore, one would agree that data on employment must be able to support the needs to monitor its structural changes aside from its other characteristics. Monitoring structural change is most useful particularly during the periods of economic turmoil. Employment data are also necessary to reflect short-term fluctuations. The experience of Indonesia during the 1997 economic downturn demonstrated

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that having reliable data was crucial. This is because reliable data is the basis of developing good development program. Using reliable employment data series one can see the change in employment structure, the shift from one branch of economic activity to another. Also it may answer the question whether modern sector sufficiently growing to absorb enough workers in order to reduce underemployment in both formal and informal sector. The success of employment creation in the future is expected to drastically change the composition of employment status and occupation. With this in mind, it is obvious that the need for structural employment statistics will become higher in the future. Employment statistics need to depict at least these structural changes, namely in terms of branch of activity, occupation, and status in employment. In brief, employment data must therefore be maintained with further development and improvement in sustainable manner.

3.3.1.2. Short-term trends As the Indonesia’s economy is dominated by agriculture, employment statistics also need to reflect seasonal movements in such sector. Some policy questions should be answered such as is work intensity in agriculture different during peak and low seasons; does agricultural employment decline during low seasons; what sectors can absorb agricultural workers; what is the composition of formal/informal employment; are seasonal patterns different by gender, education and other characteristics of individual workers and what aspects of employment are influenced by seasonal movements. Employment data are necessary to monitor closely the impacts of economic upheavals. It has become urgent to monitor the employment situation to get the answer of the level of work intensity and productivity; real wages; movement of workers from the more affected urban areas to rural areas to settle for employment within the family; what sectors were hardest hit; how do households and communities respond to employment deterioration. During economic recoveries, such indicators are needed to address questions in the opposite direction, such as how many people gained new employment, do people go back to same economic activity.

3.3.1.3. Unemployment and underemployment With the labour force approach one may classify working age population18 into employed, unemployed and not in the labour force. The latter is then to be grouped into those still in education, households care takers and others. In Indonesia the unemployed persons are classified into first time job seekers and those who are already in employment but looking for work. Increasing unemployment level may reflect the impacts of economic crises as many people lost their jobs. Likewise, in such economic turmoil may be manifested in increasing underemployment. Open unemployment is an important indicator to look at particularly in developed economy. In developing economies like Indonesia apart from open unemployment, the measure of underemployment is critical as it shows that although people having jobs but the jobs might not be productive. Tracking demand and supply of labour in the modern sector is useful in understanding the mechanism of wage determination in the modern sector, which in turn influences earning levels in the informal sector. The labour market for the whole economy cannot be understood without knowing the modern labour demand and supply. Data on unemployment are presented in unemployment rates by age group and sex, both for general and youth. In addition to that, data on employment to population ratio is also provided. This is due to the fact that in many countries like Indonesia it is a much better measure of employment slack. Expressing youth unemployment rate only to illustrate unemployment among youth is not sufficient. Youth unemployment rate should be accompanied by the ratio of youth to adult, youth share in employment and youth non-activity rate to give a better picture of youth employment. Youth non-activity rate shows the level of youth that are not active in the labour force. It means that the percentage of those in the age group of 15 to 24, who are either still in school, keeping households or doing others not classified by the first two activities to the total youth population are classified as youth non-activity rate.

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3.3.1.4. Informal sector The importance of the informal sector in providing employment for the excess supply of labour in Indonesia can not be denied. The sector is believed to provide a “safety net” for employment by absorbing agricultural workers who migrate to urban areas or by providing jobs for those who could not find jobs in the formal sector. The informal sector has been a main part of the Indonesian economy for a long time and it seems will remain the same for a long time to come. In fact, it is difficult to measure the informal sector over time. One should keep in mind that the indicator might be fluctuating over time. In addition, one should bear in mind that when it comes to decent work, informal is not always a negative sign. Something can be informal and decent while something formal can be indecent. Currently two sources of data are available to measure informal sector employment. The first is from household employment surveys such as SAKERNAS and SUPAS. The second comes from establishment surveys. Estimates of informal employment in household surveys can be approached through status in employment as proxy. Self employed (except professionals), own account, casual workers and unpaid workers are considered as informal sector workers, meanwhile employers and employees (except agricultural labourers) are grouped as formal workers.

3.3.1.5. Wages and remuneration Remuneration is the aspect of working conditions that has the most direct impact on the day-to-day lives of workers. Since its early days, the question of decent wage levels and fair labour remuneration practices have been at the centre of the ILO’s action and the ILO has advocated labour standards seeking to guarantee and protect workers’ right in respect of wages. Already its original Constitution (1919) referred to the “provision of an adequate living wage” as one of the most urgently required reforms. Wages have obviously very different implications for employers and workers. Wages are mainly a cost to employers but also a way of motivating workers. To workers, wages represent their standard of living, an incentive to acquire skills and finally a source of work satisfaction. Collective bargaining at enterprise level and branch level, combined with national tripartite social dialogue are the best way of determining wages and solving potential conflicts. Coordinated wage bargaining is therefore an important tool to achieve low inflation, combined with high employment and competitiveness. Social dialogue on wages is envisaged in various ILO instruments special attention being paid to the role of social partners in fixing of minimum wage. Minimum Wage Fixing Convention (No. 131) and Recommendation (No. 135) provide for extensive participation of employers and workers both in the determination of the groups of wage earners to be covered by the minimum wage fixing system and in the establishment, operation and modification of the minimum wage fixing machinery. ILO instruments also deal with the issue of wage protection: Protection of Wages Convention (No. 95) and Recommendation (No. 85). They also deal with protection of workers’ claims in case of their employer’s bankruptcy or judicial liquidation: Protection of Workers’ Claims (Employer’s Insolvency) Convention (No. 173) and Recommendation (No. 180). Naturally, effective functioning of protective measure based on these instruments can be hardly imagined without social partners’ involvement. Wage/salary/income data is important to be collected as wage/income reflects one’s welfare. Wage data may be obtained from establishment surveys or household surveys. As establishment surveys in Indonesia only covers selected branches of economic sectors and only includes certain occupations of formal workers, the level of wage originated from such surveys would not reflect the general picture of workers’ income. Wage/salary/income originated from household surveys reflects more of the real situation of wage level in the country. This is because the coverage of SAKERNAS, as a household survey is bigger. It includes working household members in the sample, although it also covers unpaid workers. Wage rate is considered as one of the indicators of decent work. Ideally, data on wages should reflect its sufficiency relative to workers’ living cost. It actually should be interpreted as “…what is the distribution of workers by wage rate?. What is the percentage of workers that receive low average wage...?”. Two indicators on wages are presented. First, the number and wages of casual workers and secondly, the distribution of workers that receives lowly pay rate. The recent data enables one to distinguish between those casual workers employed in agriculture and those casual workers employed in non agricultural activities.

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3.3.1.6. Hours worked Hours worked may reflect whether workers work normal hours or not. Excessive hours worked surely is not acceptable without health concerns or overtime rewards. Hours worked could also be of time related underemployment as well. The data are expressed in number of workers by hours worked. The latter is broken down into 12 categories of hours worked, namely 1-4, 5-9, 10-14, 15-19, 20-24, 25-34, 35-44, 4554, 55-59, 60-74 and 75+. These categories hopefully may serve ones’ purposes for employment analysis. As normal working hours in Indonesia is in the range of 40 to 45 hours per week, therefore those who work for more than 45 hours per week are considered employed with excessive working hours.

3.3.2. Social Protection Data on social protection is essential in monitoring the DW condition. DWI on social protection is reflected in the coverage of social security and the percentage of public social assistance to the Gross Domestic Product (GDP).

3.3.2.1. Coverage of social security This indicator is obtained from the MOMT that collects the information from the workers’ insurance records that is under the jurisdiction of JAMSOSTEK, state-owned manpower insurance. However, in the last few years the flow of this information has not been very smooth. The data available in the MOMT is usually presented in the number of firms participated in the social security scheme and coverage of workers in the scheme. As the scheme only covers formal workers only, the inclusion of those working in the informal sector can not be represented.

3.3.2.2. Percentage of social assistance to the GDP This type of indicator may be obtained from the Ministry of Finance’s reports. Unfortunately this information is not always available for public. There were three points of years where this information was available in the expected form. The unavailability of such information in the past stemmed from the fact that the budget expenditure on “social assistance” was combined with other expenditure. It was only in the 2005 APBN that expenditure on “social assistance” was separated, which allows one to obtain the data on percentage of social assistance to the GDP. As this indicator is imperative, it is wise if this format of government budget expenditure can be maintained.

3.3.3. Social Dialogue The component of social dialogue to be represented in four indicators, namely membership of trade unions, number of enterprises belongs to employers’ association, coverage of company regulations and CLA, and strikes and lockouts. These four indicators are deemed sufficient to reflect the extent of social dialogue in the work place.

3.3.3.1. Membership of trade union This type of data may be obtained from the MOMT as the Ministry compiles the reports from trade unions. During the old regime under Suharto, the government only acknowledged one trade union, namely, “All Indonesian Trade Unions” (Serikat Pekerja Seluruh Indonesia/SPSI). The Indonesian government then ratified the ILO Convention No. 87 concerning Freedom of Association and Protection of the Right to Organize in 1998. Since then the number of trade unions has been on the increase. This indicator manifests not only freedom of workers but also representing the extent of social dialogue at work.

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The compilation of the membership of trade union is relatively new in Indonesia. In response to the rapid increase of number of trade unions the government (MOMT) until now is still verifying their validity. Therefore the use of trade union membership as one of the indicators on social dialogue at work should be interpreted with caution.

3.3.3.2. Number of enterprises belongs to employers’ association ILO Convention No. 87 not only concerns with freedom of association of employees/labourers but also that of employers. There are two main employers’ organization in Indonesia, KADIN and APINDO. The latter is more a reflection of employers’ organization as it concerns more with interests of employers and labour. The data is compiled by the MOMT which is based on the reports from employers’ organization. However, the data is presented in the form of accumulated number of enterprises. The reason is there is hardly any change in the figure of membership from year to year.

3.3.3.3. Coverage of company regulations and collective labour agreements This data is obtained from the MOMT that is based on the reports from companies. The Indonesian Manpower Act No. 13 of 2003 obliges enterprise to formulate company regulation. However, enterprise that has participated in collective labour agreement (CLA) is not required to have company regulation. Such company regulation and agreements are essential to protect both workers’ and employers’ rights. Therefore continuity and consistency in the collection of such data are very important to be maintained in order to monitor decent work status in Indonesia.

3.3.3.4. Strikes and lockouts The MOMT collects data on strikes and lockouts (there is no separation between strikes and lockouts). There is an obligation for enterprise to report to the MOMT if they wish to conduct strike. The data are maintained by the DG of Industrial Relations of the MOMT and regularity is well maintained.

3.3.4. Rights at Work There are three DWI under the rights at work, namely non-school participation of children aged 7-15 years old, percentage of women working in ISCO-2, and cases brought to labour court.

3.3.4.1. Non-school participation of children aged 7-15 The official schooling age in Indonesia is seven years old. The government has been introducing nine years compulsory education in Indonesia that applies to children aged 7 to 15. Even though it is not entirely true, children of this age bracket that do not participate in education school are considered to be in the labour force. Such assumption gives the rough level of the extent of child labour. Non-school participation of children may be obtained from the SUSENAS. The SUSENAS, a national social economic survey conducted each year, asks in its survey a question regarding education aimed at population aged 5 and above. Children aged 7-15 if they are still in school would equal to those pupils in primary and junior high school.

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3.3.4.2. Percentage of women working in ISCO-2 (ISCO-1968)17 Women in developing countries are generally working in feminine types and lower ranked occupations. This is particularly true in Indonesia. The proportion of women working in occupational major group such as “administrative and managerial workers” is usually very low. If one assumes that low proportion of women in such occupation as an indicator of women being denied to access to high level employment and not having fair treatment, this indicator is useful to monitor the rights at work of women. The second major group in the International Standard Classification of Occupations of 1968 refers to “administrative and managerial workers”. This major group includes (1) legislative officials and government administrators, and (2) managers. The data may be obtained from SAKERNAS, population census, even from SUSENAS. The share of women working in ISCO-2 (ISCO-rev.2, 1968) would provide an indicator of inequality at work.

3.3.4.3. Cases brought to the committee of labour dispute settlement When dispute occurs and mutual agreement is not to be reached, a case can be brought to labour court. As labour court does not yet exist in Indonesia, labour disputes are brought to committee for labour settlements. Such a committee is called “National Committee for Labour Dispute Settlement (P4) at national level, while in the regions such committee is called the Regional Committee for Labour Dispute Settlement (P4D). In the past during centralized governance, the flow of information was relatively good, as there was an obligation for the regions to report to its central office. This included the number of cases brought to labour dispute committee in the region. Since the decentralization, the flow of data has been very lagging, if none at all. Some regions might not send the reports to the central MOMT. The data on this indicator is presented in the number of dispute case (also referred to as dismissal case) and the number of workers dismissed (as decided by the committee). It should be kept in mind that number of cases is not a good measure. It could be viewed as positive if case can be brought likewise few cases brought forward could indicate tight control and not a positive sign. To maintain the series of good DWI, one needs to ensure that regional committees report regularly to the central office in that way consistency and continuity of data could be obtained.

3.4. Implications of Regional Autonomy on Data Collection Since the implementation of the Act on Regional Autonomy No. 22 of 1999, which then revised by the Act No. 32 of 2004, regions have the rights to carry out their own activities, except in certain fields.18 Technical ministries including the MOMT therefore no longer have vertical coordination with their related offices in the regions. The management of regional offices was transferred to the regional governments. Although regional autonomy might bring betterment to the regions, but to a certain extents some activities will suffer. For example, maintaining the continuity and consistency of data flow particularly regarding administrative records that are entirely dependent on the regions’ willingness to regularly sending the information is very crucial. As DWI is originated from censuses, surveys and administrative records, the discussion will highlight such impacts.

17 18

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Similar major group of occupation in ISCO-1988 would be group ISCO-1 that includes legislator, manager and other high ranking occupations. These fields cover foreign politics, defense, security, justice, monetary and national fiscal as well as religion (see the Act No. 32 of 2004).

Labour Market Information at Regional Level Ideally BPS should also be able to provide labour market information at regional levels. The publications of the results of censuses, intercensal population surveys, SAKERNAS and SUSENAS provide employment information tables at the provincial level, unfortunately not at the district level. Regional offices except that of BPS generally do not yet have the expertise to produce similar tables at the district level. They lack readily available labour market information that may help them negotiate minimum wage levels, assess skill shortage and surpluses in their region, and feed basic labour market information to employers and job seekers as well as to education and training providers. It is therefore very crucial that the BPS and employment-concerned government agencies should make attempts to focus on producing estimates at the provincial and district level. Apart from that, in the aftermath of the financial crisis and, followed with the implementation of regional autonomy, the budget of CBS and thus the sample size of the SAKERNAS survey were drastically reduced. Beginning in 2000, BPS was not able to produce its usual tables even at the provincial level. Tabulations for provinces were replaced by those tables of the island level. With the improving economic situation of the country, the sample size returns to normal. An attempt to obtain labour market information data at district levels was pursued by the MOMT in 1990. The MOMT allocated part of its budget on a pilot basis for labour force survey to several provinces in three or four of its district offices to produce a district level of information. Such labour force survey was referred to as SAKERDA (regional labour force survey). A ccollaboration with BAPPENAS as well as BPS was done, although the major player was the MOMT. This initiative was discontinued due to budget constraint apart from lack of technical expertise. The MOMT should concentrate on data analysis, and should leave data production, processing and publication to the competent authority that is BPS district office, under the supervision and coordination of the national BPS.

Data Collection through Censuses and Surveys Until now, the production of statistics is still highly centralized. BPS still continues to produce national and regional statistics. As SAKERNAS is the only source of employment data that maintain its continuity and consistency, its undertaking should always be maintained if not improved. However, because the number of sample applied in SAKERNAS is relatively small, employment data could not be used for lower administrative levels such as district levels. With regional autonomy is taking place the needs of regional employment data particularly in order to monitor DWI seems very substantial. Data at both provincial and district levels could be relied on if the surveys are based on larger sample. It is recommended that the government needs to consider expanding the SAKERNAS to the extent that it may capture the labour market down to district levels. The availability of regional data would be very useful to the regional government in planning and implementing its various development programs.

Data Collected through Administrative Records Administrative records are maintained by the technical ministries. Data on employment and labour are maintained by the MOMT. In the past the flow of data from the regions to the MOMT was relatively smooth even though timeliness sometimes could not be maintained, particularly for outer islands. Since the regional autonomy took place, some technical ministries such as MOMT no longer have its regional offices. Employment and labour related issues are taken care by the Office of Employment under the auspices of the regional government. In many cases this employment office does not send their data or information to the central MOMT as they are not obliged to do so. Apart from that some of the Manpower Offices in the regions are being managed by person that do not have employment and labour background. Thus it is not surprising that the officials do not have good knowledge of importance of employment and labour-related data. Lack of awareness of data value and no obligation to send data to the central are the challenges that one has to face in attempting to establish good and reliable DWI.

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Conclusion So far the chapter has reviewed data consistency, comparability, and data gap to formulate DWI. There is a need to increase awareness on the importance of data particularly to the regional government levels. In this way even though regional government is not obliged to send their information data to central office, with increasing awareness they would do it voluntarily. The availability of rich data collected by the BPS should also be combined with the strength of the BPS and the MOMT in terms of analytical capacity. It seems that analysis is rather weak in both institutions. There is a need to be an increase focus on regular and routine analysis.

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CHAPTER 4

EXISTING MECHANISM OF COORDINATION FOR LABOUR MARKET INFORMATION/DECENT WORK INDICATORS

The current chapter reviews the mechanism of coordination for data collection and dissemination within the MOMT as well as outside the MOMT. The MOMT is the technical government ministry responsible for employment and labour including decent work indicators. To understand the existing mechanism of coordination for the LMI including DWI in the MOMT, one needs to understand the locale of the working unit responsible for the LMI within the MOMT, to identify who are the main partners of the MOMT in data collection, types of data collected and the main users. Then it is followed by reviewing the internal linkage between different working units within the ministry and the external linkage concerning labour market including decent work indicators.

4.1. Existing Mechanism of Coordination of LMI/DWI in the MOMT This section presents the locale of the agency responsible for the data collection, working partners, type of data collected, main users and the existing both internal and external linkages of the MOMT.

4.1.1. Locale of the Responsible Agency for DWI in the MOMT Under its jurisdiction, the MOMT has responsibilities that are reflected in the existence of its nine (9) first echelon working units. One of these first echelon working units in the MOMT is the Board of Research, Development and Information. According to the Presidential Decree this Board is assigned to conducting applied research and development and to manage data and information on manpower and transmigration (see Chapter 2 for the detailed function). The Minister of Manpower’s Instruction No. 1 of 2001 stipulates that the Board of Research, Development and Information is the agency that manages the Ministry’s website: www.nakertrans.go.id. There are two centres of information within this Board, one is the centre of manpower information and the other one is the centre of transmigration information. As labour market information vis-à-vis decent work indicators is mainly related to employment and labour-related issues, therefore by legislation the agency responsible for management and dissemination of manpower information is the Centre of Manpower Information.

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4.1.2. Main Users of LMI and DWI Main users There are four main users of LMI including DWI namely (1) job seekers (2) employers (3) trade unions and (4) policy makers and labour market analysts. All users of LMI have something in common. They need information on labour market including decent work condition. However, the types of information users are interested in, might be different from one user to another. The table below briefly show the types of data required by users.

Information needs of DWI users The table below briefly shows users have different needs of information. Job seekers might have interests on job vacancies and occupation perspective, while employers might be more interested in looking at legislated minimum wage, or collective labour agreements.

Table 4.1: Type of Information Needed by Users USERS

INFORMATION NEEDS

Job Seekers

Vacancies for job seekers by Occupation and experience required, Industry and location Salary and other benefits and career prospects. Employment opportunities in other regions and abroad Career guidance and counselling for students Promising occupations: length of education and training, level of difficulty, salary, career prospects. Special training e. g. computer skills and language

Employers

Economic performance Minimum wages Skills Labour Market Market wage for unskilled, semi skilled and skilled labour Minimum wage and workers cost of living Collective bargaining Company regulations

Trade Unions

Minimum Wages Average wages Membership of trade unions Company regulations and Collective labour agreements (CLA) Strikes (location, frequency, duration, working hours lost, material loss)

Policy makers and labour market analysts

Trend of labour market Trend of DWI Employment Opportunities Unemployment, and Other employment and labour-related information

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4.2. Linkages 4.2.1. Internal Linkage To achieve its objective, which is to manage the MOMT’s data collection and dissemination, the Centre of Manpower Information maintains a strong and close linkage with other working units within the Ministry. The main working partners of the Centre of Manpower Information within the MOMT are all working units involved in data/information. Structurally, each first echelon working unit such as Directorate General or Board has an organic structure termed as the PEP (Program, Evaluasi dan Pelaporan). This PEP is obliged to compile data and records from that can be from the regions (provinces/districts) or administrative reports from its constituents.19 In the past PEP received administrative data from provincial levels that acquired such administrative data from district levels. Those administrative data and information compiled by PEP would then be delivered to the Centre of Manpower Information. The latter will manage and process those data and information into presentable format. To re-affirm the mandate of the Centre of Manpower Information, the MOMT has also established “Team of Information Management” chaired by the Chairman of Board of Research, Development and Information (BALITFO), with the membership from all the secretariats (normally represented by the PEP) of each first level echelon. The team has a mandate to implement the tasks through a decree issued by the Chairman of the Board of Research and Information. The Centre of Manpower Information is not only in charge of data management in the MOMT. Its mandate includes data management for the MOMT’s website. Although in the past data were not systematically generated, such data still contained consistency and regularity. With the implementation of the regional autonomy, however, the regions do not have the obligation to send data and information to the central government. In summary, the MOMT is no longer receiving regular data from the regions. This has been a disadvantage as the MOMT could not monitor the DWI in regular and consistent manner and data reliability is also questionable.

Types of data compiled by the Centre of Manpower Information The types of data compiled by the Centre of Manpower Information reflect the tasks and functions of each directorate generals within the MOMT. It is understood that each directorate general has its specific functions and tasks. Consequently, the data and information gathered by each directorate general would reflect its responsibility. For example, data on manpower placement and employment service are compiled by the directorate general of domestic manpower placement. Meanwhile, data on strikes and lockouts are drawn together by the directorate general of industrial relations (Table 4.2.).

19

PEP should write the reports of all the implementation of programme and activities of its respective first echelon working unit. The PEP thus acts as the liaison point with the Centre of Manpower Information.

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Table 4.2: Types of Employment and Labour-Related Data Collected by the Directorate Generals within the Ministry of Manpower and Transmigration DIRECTORATE GENERAL

TYPES OF DATA

ORIGIN OF DATA

DG of Domestic Placement

Registered Job seekers

Companies’ report based on Act No. 7 of 1981

DG of Labour Standards

Registered job vacancies Registered job placement Foreign workers Work Accidents Provincial Minimum wage

Report from labour inspector Report from the respective directorate

DG of Industrial Relations

Minimum wage Minimum Living Needs Coverage of Social Security Company regulation and CLA Strikes and lockouts Number of Trade Unions and membership Employers’ organization and number of employers belong to employers’ association

Report from the respective directorate Report from the respective directorate

DG of Overseas Placement

Number of people working overseas by destination and by place of origin Remittance of workers

Report from the respective directorate

DG of Training and Productivity

Job seeker training *

Report from the respective directorate By trade

Apprenticeship training Number of instructors

By province

Note: * Since the regional autonomy took place most of the vocational training centres were transferred to the regional governments.

Method of data/information delivery The method of data/information delivery from each directorate general to the Centre of Manpower Information may vary. The delivery can be done through email, office courier, or data might be presented in the forms of either quarterly or annual reports. Occasionally however, staffs of the Centre of Manpower Information may pick up the data themselves, for instance data on remittance of the Indonesian working abroad. The frequency of data collection by the Centre of Manpower Information is normally on quarterly and yearly basis.

4.2.2. External Linkage In carrying out its tasks and function, the centre of manpower information establishes a strong and close relationship with the BPS. This stems from the fact that by legislation the BPS is the only agency in the country that collects and disseminates basic and general data and information including of those of labour and employment. When the MOMT is to conduct survey it has to coordinate with the BPS for its expertise and legality. Likewise, when the BPS conducts its undertakings such as censuses or surveys, BPS will seek views and

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feed back from the relevant technical ministries through meetings and discussions. Such meetings and discussions may range the formulation of questionnaire, types of variables to be included and presentation of the results and others. In the case of labour force surveys the most relevant ministry to be sought for inputs would be the MOMT. Normally some representatives from the MOMT will attend the meetings and raise their views and suggestion on the relevant issues for the usefulness of the surveys/censuses to users. A collaboration work is also established between the Centre of Manpower Information and the BPS based on the Minister of Manpower and Transmigration’s decree. Such collaboration includes the MOMT’s publication namely “Employment Information Brief” and the “Profile of Indonesian Human Resource”. Aside from the linkage with BPS, relationships with other government ministries/agencies are also maintained although mostly in ad-hoc manner. For example, the Centre of Manpower Information builds cooperation with Bank of Indonesia. Besides this, external linkages are also present through a number of working teams or committees. For example, several working teams or committees that currently exist are the Manpower Planning Team, the Wage Council, Training Commission and others. These teams or working committees normally comprise of representatives of tripartite plus, and to a certain extent also include relevant technical agencies, and exist at the national and regional levels. For instance, the so-called “Regional Manpower Planning Team” is supposed to exist in every provincial and district levels. The team normally led by representative of manpower office in the region, and comprises of representatives of regional development agency, statistic office, other relevant technical offices (industry, trade, agriculture and others) as well as employers and trade unions. With the existence of several working committee on labour and employment-related issues might be an advantage as they may be used as the means of data collection and updating. The Manpower Planning Team is particularly very relevant to be considered.

Existing linkages to the ILO for data reports The MOMT also maintains an external linkage. It is generated by its obligation for data reporting to the ILO. The existing reporting system to the ILO is based on the mandate of each working unit in the organization of the MOMT. According to the legislation on the MOMT organization structure, the Centre of Administration for Foreign Relations20 is the agency that is supposed to conduct foreign relation (bilateral or multilateral). Because of its mandate, this centre by regulation is responsible for providing data or information required by international agency such as the ILO. To provide data reports to the ILO thus far is carried out through coordination of the Centre of Administration for Foreign Relation with other relevant working units in the MOMT. The report to the ILO is usually submitted every year.

4.3. Challenges The previous chapter (Chapter 3, Section 3.4.) touches upon the MOMT’s challenges in sustaining data collection in reliable manner particularly after the regional autonomy took place. What should one do to overcome this challenge? With the decentralization policy, the agency in the regions that is responsible for employment and labour matters is the Office of Manpower. This office is under the auspices of the respective regional government. Unfortunately, the organization structure of manpower office differs from one region to another. In some regions the portfolio of employment and labour matters is managed at the office level (dinas), in some other regions its portfolio is only managed at the lower level, sub-dinas. There is no standardized organization structure of manpower office in each region. The office that manages solely labour and employment matters means that the office has its own portfolio and a higher authority level. In other cases, the labour and employment portfolio is merged with others thus downgrading the importance of labour and 20

This centre of administration of foreign relations is under the supervision of the Secretariat General of the MOMT

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employment issues. Along with the process of decentralization the re-structuring regional government organization has also taken place. This included re-structuring its government personnel. It was fortunate, if officials were relocated to similar fields of responsibility. Unfortunately this was not always the case. For example, some former manpower officials were relocated to different fields or different ministries. Likewise, some officials with no background of labour and employment technical skills were relocated to manpower offices. As a consequence, a number of the current manpower offices are being managed by officials who do not have any employment and labour-related background. Such circumstance to a certain extent has caused adverse impacts on the operation of the office as well on the implementation of their tasks and functions. During the centralized government the central manpower offices, like other technical ministries, had invested in human development substantially. The regular provision of technical skills for officials in the central offices was regularly conducted in order to enhance the working performance of the implementing officials. Similarly, regular and frequent skill training for officials in the regions was also carried out by the central offices. Socialization on various issues and policies on labour and employment was regularly conducted in order to reach similar perceptions and standard level of competency. Considering the current situation it seems that the obvious challenge concerning the updating of labour market information vis-à-vis decent work indicator is the needs of improving the skills. Thus, to raise the awareness of the manpower officials not only with regard to labour and employment problems but the ultimate knowledge of the importance of data is indeed imperative. From there on, knowledge of the importance of LMI and DWI as well as the need of monitoring such indicators should well be introduced, which then technical skills could also be delivered.

Conclusion Although structurally the working unit that has the mandate of data collection and dissemination in the MOMT is well placed, some problems seem to appear. Such problems are particularly related to the consequences of the implementation of regional autonomy, as regional governments do not oblige to report to the central offices. Some remedies need to be taken up in order to sustain the information flow. Such steps may cover awareness raisings, capacity building and strengthening the existing regional councils or committees. Recommendation of the mechanism of coordination in particular related to the labour market information and decent work indicators is presented in separate chapter.

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CHAPTER 5

CONCLUSION AND RECOMMENDATION 5. 1. Conclusion Labour market information is involved with data on labour supply and demand as well as the characteristics of employment and unemployment. Decent work indicators, on the other hand cover more than labour market information, as DW includes other labour related information that are not usually covered in LMI such as social dialogue, social protection and rights at work. Decent work is the ultimate goals of the ILO. Thus, to large extent, DWI reflects more employment and labour issues than LMI. The MOMT is the technical ministry that is responsible for producing LMI and DWI, the relevant agency for this is the Centre of Manpower Information. The Centre is by function is responsible for data collection and dissemination. The existing system of coordination of data collection for potential LMI and DWI data base is relatively good. Although the existing system is well established, the skills of regional officials in charge are lacking. Thus, efforts are required to enhance their skills. The establishment of a set of 24 DWI in Indonesia is feasible. Some indicators are easily established while some indicators require extra efforts. DW indicators are obtained from census, surveys as well as administrative records that originated from the BPS and from the technical ministry particularly the MOMT. Since the implementation of regional autonomy the flow of data from the regions is not as smooth as it was in the past. Consequently, the sustainability of maintaining DWI particularly those data that are drawn from administrative records suffers. There should be attempts to recover this situation.

5.2. Recommendation As the existing mechanism of the coordination is structurally well placed, what seem lacking are sufficient skills of those who manage data collection and dissemination particularly in the regions. Thus, to sustain the coordination system from the relevant working unit or agencies to the MOMT concerning data collection of LMI and DWI may be undertaken through the following agenda. Š

Š

Š

Capacity building of the relevant officials should be put as a high priority. This is particularly true with the new organization structure of the regional offices. There is also high possibility that some officials are lacking technical expertise in labour and employment field, thus the needs of skills upgrading in maintaining LMI and DWI data base are critical. Skills are needed in the area of management of LMI and DWI database. Technical skills in methodology covering concept and definition, methods of data collection, labour market analysis and formulation of decent work indicators and other technical knowledge are also important. In this regard, technical assistance from the ILO as a UN agency specialized in labour, employment and social issues would be very beneficial. Technical assistance from the ILO would be useful in order to support the development of labour force survey that allows employment analysis down to lower government administrative levels such as kabupaten and kecamatan. Good quality and large sample would be very valuable as the basis for making sound and good employment policies.

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Š Š

Š

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Strengthening the working relationship between manpower office, regional planning agency (BAPPEDA) and the statistics office in the region should be attempted. A regional working team needs to be considered. Such a team should discus and work on employment and labour issues including LMI and DWI. Its membership may cover representatives of the main working partners namely manpower office, regional development planning agency and statistic office as well as other representatives from the technical offices (industry, agriculture, trade and others) and university. There is a possibility that some regions have already had a Regional Manpower Planning Team (Tim Perencanaan Tenaga Kerja Daerah/PTKD). As the PTKD team normally consists of the suggested representatives, therefore the region might consider including LMI and DWI management in the agenda of the PTKD team.

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