Local Government and Good Emigration Governance

Every year, hundreds of thousands of Indonesians go overseas to work. The National Agency of Placement and Protection of Indonesian Migrant Workers (BNP2TKI) recorded that in 2009 748,825 people went overseas to work, three quarters of them women.

The massive flow has shaped emigration over the last 15 years. Compared to 1994, the 2009 figure represents a 300 percent increase, a magnitude that is extremely difficult to manage. In terms of stock, moderate figures of Indonesian overseas workers amount to between 4.5 million and 6 million people.

A dramatic increase of migrant flow and stock following the 1997 economic crisis will unavoidably augment the likelihood of problems. Migrant workers are inherently vulnerable.

They are prone to danger even if they migrate legally, let alone if they migrate illegally/irregularly. The International Labor Organization estimated that Indonesian illegal/irregular migrations outnumbered legal ones by 2 to 4 times in 2009 (Tirtosudarmo, 2009).

Due to the complex nature of emigration, good governance is a must. For one thing, we are sending a huge number of female laborers to do the “3 Ds” (dirty, difficult, dangerous) types of work.

For another thing, Malaysia and Saudi Arabia are the two biggest destination countries of Indonesian workers; both are not open in terms of handling human rights issues and with them the government has not been able to draft a bilateral agreement.

Without good governance, Indonesia can fall into the trap of endorsing forced labor or people trafficking.

The question is who should be held responsible for emigration governance in the context of a decentralized Indonesia. Indeed, policy and institutional framework seems to be inconclusive in the division of labor between central and local governments.

It is particularly inconclusive because overseas employment lies in the area of employment as well as foreign affairs. Law No. 32/2004 on regional development stipulates that employment is a decentralized matter whether foreign or not.

On the other hand, those in favor of centralized governance argue that Law No. 13/2003 on employment (articles 33 and 34) clearly differentiates between domestic and overseas employment; the latter being regulated by different law (Naekma and Pageh, 2009). Consequently, the migrant worker issues which are not regulated by Law No. 13/2003 are also the issues that are not decentralized.

One year after the passing of the employment law, the migrant law was approved by the House of Representatives, i.e. Law No. 39/2004 on the Placement and Protection of Migrant Workers.

The law mandates the establishment of the BNP2TKI: A body with service centers in 15 provinces (BP3TKI), and four service posts at the district level (BP4TKI). Indirectly, the formation of the BNP2TKI reinforces that from the perspective of the government, overseas employment is more of a centralist matter.

However, a series of interviews I held with NGOs — including the National Commission on Violence Against Women (Komnas Perempuan), Ecosoc Rights, Unifem, Migrant Care — demonstrated strong support for decentralization in emigration governance. Although overseas employment has foreign affairs elements, the centralist management will be unable to handle the micro-level problems.

Compared to violence and abuse by employers in the destination countries, problems such as identity fraud, cheat, systematic extortion, detention, etc. which occur in Indonesia make up 80 percent of the problems faced by migrants.

Problems that actually happen at the local level can be more effectively handled by the local government.

This is in line with Law No. 32/2004 (article 14), which requires local governments to provide service and protection for the workers in their local jurisdiction.

One should not forget that it is in the interest of the local government to pursue good emigration governance. The most tangible gain from emigration — the remittance — is more influential at the local rather than national level. In 2009 Blitar District recorded Rp 117 billion in remittances, equal to 10 percent of the regional budget (APBD).

Meanwhile, the remittances of West Lombok reached Rp 395 billion or 10 times more than its total local revenue (PAD).

At the same time, the pain of emigration is also more significant locally. Problems of violence, abuse and other social costs end up being problems for the local governments to solve. It is therefore in the interest of the local governments to pursue good emigration governance to maximize the advantages and minimize the disadvantages of emigration.

The context of decentralization has given room to local governments’ initiative to fill in the existing policy gaps.

For example, protection mechanisms have been missing from national policy frameworks and hence can be the area where the local governments intervene.

Good practices in emigration governance have been demonstrated by some regions. West Lombok and Blitar regencies are among a few regions that have broken new ground by establishing the migrant protection commission (the forthcoming SMERU). These local initiatives need to be learned by other migrant-source regions.

However, not all local governments are ready to intervene. Although, Law No. 32/2004 sufficiently encourages them to take active roles, the majority of regional governments lack the capacity to perform additional emigration tasks.

More importantly, they lack the budget to conduct these tasks. In other words, local governments do potentially have power, but in general they still lack necessary authorities.

It is therefore about time that the new migrant workers’ law empowers local governments by giving them more authority, enhancing their capacity, and allocating for them a sufficient budget so that they can execute these tasks.

Emigration is such a complex issue that the central government alone cannot manage it. Yet, that is just fine because the central government can empower the local governments and divide the work with them.


The writer is a researcher at the SMERU Research Institute and is working on a study funded by the International Development Research Center on international migration and decentralization. The opinions expressed here are hers.

Palmira Permata Bachtiar, Jakarta | Thu, 12/23/2010 10:25 AM | Opinion
http://www.thejakartapost.com/news/2010/12/23/local-govts-key-emigration-governance.html

Law revision is key to protecting workers

Does the state sufficiently protect migrant workers? To answer this, one should refer to the Law on the Placement and Protection of Indonesian Migrant Workers.

To begin with, the spirit of the law is purely commercial and designed to promote sending as many workers overseas as possible. Its focus on protection is far from adequate. Out of the law’s 109 articles, only eight deal with protection.

The law shows inconsistency in addressing migrant worker rights. Articles 7(a) and 8(b) stipulate that the state guarantees rights, including the right for correct and reliable information about the overseas labor market and placement procedures. But then it simply hands over information provision to private recruitment agencies.

No one would be surprised if the latter did not pass on correct information and other important facts that might go against their vested interests. For example, recruitment agencies might not inform workers about their rights in industrial relations fearing that this would spoil their reputation in supplying obedient workers.

Or the agencies might not reveal true information about working conditions that might make prospective workers lose interest. The issue then is who will guarantee that these profit-oriented entities convey accurate information? If they violate the rules, what will the sanctions be?

Article 7(e) of the law maintains that the state must provide protection to migrant workers prior to, during and after employment. Article 82, however, stipulates that private recruitment agencies are responsible for protecting migrant workers according to placement contracts. Aside from this inconsistency, how can we ensure that the agencies are doing what the law mandates and what are the sanctions if they do not?

The law is unclear about how to protect workers from extortion and exploitation. Although article 39 instructs the private recruitment agencies to bear all costs except as otherwise stated, article 76 (1) and (2) allow private recruitment agencies to pass on to workers the costs of processing identity documents, health and psychological tests, job training and professional certificates and others items as further specified by the government.

Further, article 43 of a Manpower and Transmigration Ministry regulation says that other chargeable costs, such as visas, food and accommodation during training, airfare and airport taxes, local transportation, insurance and, last but not least, agency service fees be paid for by employees.

According to article 76 (3), these costs must be transparent. However who will assure that these commercial organizations do not overcharging workers.

Supervision is crucial for legal enforcement. The law is ambiguous in the matter. On the one hand, article 92 (1) denotes that government agencies, including those at the provincial and district levels, are responsible for supervision. On the other hand, article 95 (2) says that supervision is the task of BNP2TKI (National Board for the Placement and Protection of Indonesian Overseas Workers). The relationship between BNP2TKI and local governments remains blurred.

More seriously, six years after the law came into effect, both the supervision mechanism (article 92 [3]) and the reporting mechanism of supervision (article 93 [2]) have still not been implemented by government or ministerial regulation. Without such regulation, supervision will be very difficult.

In regard to disputes between workers and agencies, the law suggests that both parties seek common ground informally and peacefully (article 85 [1]). Court solutions are only a last resort if parties fail to meet half way (article 85 [2]). At the same time, the stipulated punishment of offenses is lenient. Article 100 of the law imposes only administrative sanctions on errant agencies, ranging from issuing written warnings to revoking business licenses. The law is weak not only in terms of prevention but also in terms of enforcement.

The state exists to ensure protection of workers’ human rights. However, the state, at the very least, cannot even protect the workers’ consumer rights. The migrants are the clients of the agencies. They are also the clients of insurance companies. Each of them pay a premium of Rp 400.000 (US$44.40) under article 68 of the law and article 12 of the ministerial regulation.

In addition, the state levies a charge of $15 on each worker under the so-called Assistance and Protection Program. This is exactly in line with the law’s general idea: Protection should come from the migrants themselves.

It is high time to consider the adoption of international standards for effective protection and good emigration governance. Indonesia has ratified eight ILO Core Conventions in relation to workers’ rights and has signed the UN Convention on Protection of Migrant Workers and Their Families. Indonesian law must be revised to comply with these conventions. Consequently, it has to acknowledge the gender dimension in overseas employment. It also has to recognize the presence of irregular migrants — the unregistered ones and those without legal documents — and to make sure the fulfillment of their basic human rights.

The revised law needs to ensure that the recruitment process occurs in a professional, transparent, and accountable manner. It should envisage effective mechanism for monitoring and supervision of the private recruitment agencies as well as the migrant workers.

Legal revision is necessary condition, but it is not sufficient. It has to be followed with the drafting of a domestic workers law and finally the ratification of the UN Convention on Migrant Workers and Their Families.

Legislators have promised to revise the law by the end of this year. With less than one month to go, no one knows exactly what the progress is. Does this mean that legal protection is the last concern of the state?

The writer is a researcher at the SMERU Research Institute and is working on a study funded by the International Development Research Center on international migration and decentralization. The opinions expressed here are the writer’s.

Palmira Bachtiar, Jakarta | Mon, 12/13/2010 9:21 AM | Opinion
http://www.thejakartapost.com/news/2010/12/13/law-revision-key-protecting-workers.html

ACFTA and the threat of internal trade barriers

Early this month, the governments of Indonesia and China decided to proceed with the full implementation of the ACFTA. Renegotiation was considered much more costly because in addition to compensation, Indonesia will have to renegotiate with China and also with other ASEAN countries.

Instead, China offers technical assistance in improving competitiveness of Indonesia’s SMEs in terms of machinery, logistics, and promotion (The Jakarta Post, April 13, 2010).

Without underestimating that effort, this article intends to discuss the already weak competitiveness of Indonesian products. The reason is straightforward: trade barriers imposed by local governments.

The weird phenomenon is that government liberalizes trade with other countries at the national level, yet the opposite happens at the regional level where trade barriers are still imposed to our local producers.

Although no regional governments deny the importance of trade and investment on employment generation and poverty reduction, very few would set aside the distraction of local revenue at the cost of the long-term business climate.

Coupled with the decentralized authority, most local government would end up exercising their power by issuing regional regulations (Perdas) to extract tax and levies. Trade barriers are applied to regulated (read: restricted) commodities, particularly agricultural and forestry products.

As an example, one truck of tamarind from Kabupaten (regency) Timor Tengah Utara (TTU) will have to complete the so-called certificate of origin that lasts only for 2 days.

The certificate charges certain prices to pay for each kilogram of tamarind exported out of the district.

Tamarind is assumed, either to be collected in government forest or be the harvest of government distributed seeds. Heaven knows who invented this logic!

To add to the complication, the certificate is issued only after verification by the Forestry Agency. With this transportation document in hand, a trader has to rush to reach Kupang Port before the certificate expires.

Else, they must complete the whole process again in TTU.

Meanwhile bad road condition delays the transportation time twice as much.

Worse, along the long and winding road, it has to pass 10 posts, each costs it not less than Rp 15.000 (US$1.6). Thus, even with the complete transportation document, the trader just cannot avoid the illegal fees.

Once arrives in Kupang, the certificate has to be replaced with the one issued by Agriculture Agency in Kupang.

Everything has to hasten to ensure the goods do not miss the ship to Java.

In theory, exchange of TTU certificate to Kupang’s cost zero, but in reality nothing seems to be a free lunch when one has to be proceeded hastily.

In general, this illustrates what happens to agricultural and forestry commodities in Indonesia: trade barriers — be it tariff and non-tariff barriers (which practically also cost money) or legal and illegal ones – which massively inflate the cost and time of transportation.

This is understandable if consumers in Java would choose cheaper imported agricultural products than local ones. If the local producers could not win the game in their own field, how could we expect them to compete in international market?

Historically, regional regulations on trade (and investment) barriers, the so-called problematic perdas, have been repressively eliminated through Law No. 18/1999 as the implementation of the Letter of Intent with the IMF in 1998. Its amendment (Law No. 34/2000), however, terminated the deregulation process allowing the problematic perdas to mushroom again.

The newly passed Law No. 28/2009 will be the only hope in putting the free internal trade back to track.

Theoretically, under the “close system”, the legalization of such perdas will be out of question.

There are two things that arise concerning this expectation. First, SMERU (2009) found that the anti-trade element might not be stipulated in the perdas, but in the lower bylaws, for example the decree of the governor, mayor or district head.

Second, under a 2009 law, the Home Ministry no longer has the power to cancel the problematic perdas. They can only be annulled by a Presidential Regulation, which will take ages, on the account of already piling up burdern of the president.

Meanwhile, the barrier to cancel perdas is rooted in the legal framework that divides the interpretation into two groups.

One group has the opinion that perda is part of national policy framework and therefore the central government has the authority to annul perdas that are against the higher laws.

The other group believes that perda is the product of autonomous regional parliament. Hence, it can only be invalidated by the regional court.

In both cancellation cases — be it through the presidential regulation or the local court — uncertainty increases and business climate deteriorates.

One breakthrough might be to consider inter-regional trade as one of the national affairs (Hadi Soesastro, 2001). He argued that this had been the case in many other countries where distribution of goods and services was kept free and becomes part of the national economic management.

Only then the gains from trade can be captured by both national and regional governments.

Back to the issue of the ACFTA implementation. The Chinese government promised technical assistance to improve our competitiveness. Yet, we cannot expect fruitful outcomes without fixing those problematic perdas.

The government has to do something, at least not let the local producers fight alone and struggle to survive against the red tape.

To end, many would consider the ACFTA a threat. The real threat, however, is the internal trade barrier as it violates the principle of Indonesia as one unity of the free economic zone (Hadi Susastro, 2001).

Trade barriers weaken our product competitiveness, but more dangerously it threatens our national integrity.

We cannot expect fruitful outcomes without fixing those problematic perdas.


The writer is a SMERU researcher. This article expresses her personal opinion.

Palmira Permata Bachtiar, Jakarta | Wed, 04/28/2010 9:01 AM | Opinion
http://www.thejakartapost.com/news/2010/04/28/acfta-and-threat-internal-trade-barriers.html