FSPMI pursues unpaid wages at motorcycle factory in Indonesia

Almost 300 permanent workers at a motorcycle plant in Indonesia are facing losing wages and their jobs after a major shareholder in the company was charged with fraud and fled the country.

PT Kymco Lippo Motor Indonesia is a joint-venture between 75 per cent majority shareholder Kwang Yang Motor Company (Taiwan) and 25 per cent shareholder PT Lippo (Indonesia). Production at the plant began to drop in September 2008 and stopped completely in October 2008. Management informed the workers, members of IMF-affiliate Federasi Serikat Pekerja Metal Indonesia (FSPMI), the stoppage was due to a problem with the supply of parts.

However, when a parts supplier filed legal proceedings against the company for failure to settle payments due, PT Lippo discovered that the Taiwanese management was mismanaging the company. The High Court in Jakarta later found the Taiwanese partner guilty of fraud and ordered damages for a sum of US$20 million in favour of PT Lippo and, pending the full settlement of the damages, the court ordered that company President Mr. Su Kou Chang be remanded in prison. Before the court order could be executed, the President of the company fled from Indonesia. 

The company’s operation stopped completely in October 2008 and the 300 workers have been locked out since then. The workers continued to receive their wages until April 2009. The workers still demand that the company pay salary to the workers, as well as allowance for Ramadan. The case is now in the labour court. The workers seek solidarity of other labour groups to pressure for resolution of the case.

FSPMI is a labour federation with over 100,000 members. On 8 October, 800 members from around Jakarta held a rally against outsourcing and precarious work, to the President’s palace and to the Parliament. FSPMI also raised the issues of amendment of the Social Security System (Jamsostek) and Special Economic Zones (SEZs). These actions were also taken in Batam and East Java.

Sources: Anita Gardner, IMF website, 30 July 2009 and FSPMI