The Ministry of Manpower and Transmigration has published a ruling on temporary workers (PKWT) and outsourcing. Ministry of Manpower and Transmigration issued Letter No. B.31/PHIJSK/I/2012 on the Implementation of the Constitutional Court Decision No. 27/PUU-IX/2011 dated January 17, 2012. Issuance of a letter addressed to the Head of the responsible agency in the field of employment in the whole province of Indonesia is based on testing of Article 59, Article 64, Article 65 and Article 66 of Law Number 13 Year 2003 on Manpower.

The ruling will limit the use of outsourcing, as the decree aims to guarantee outsourced workers the same rights and benefits as permanent employees. Outsourcing refers to the hiring of workers on a contractual basis, often through a provider company. The workers are usually hired on short-term contracts and paid a daily wage without fringe benefits. Under the revision, outsourced workers would have the same benefits and salary as permanent workers.

There are some basic rules described in the circular: The first point mentions that the Employment Agreement for specific time periods (PKWT) as stipulated in Article 59 of Law Number 13 Year 2003 on Manpower remains valid. For the next point, in the event that the company implement the delivery system of most of its work to other companies through the chartering agreement or provision of employment services workers / laborers as provided for in Article 64, Article 65 and Article 66 Law 13 of 2003 on Employment, then there are a range of directives that have to be followed.

If the employment agreement between the recipient company chartering the work or service company workers / laborers with workers / laborers not load requirements of the transfer of rights protection for workers / laborers who object still works there (same), then it must be based on the Working Time Agreement Not Specified (PKWTT). If the employment agreement between the recipient company chartering the work or services companies, workers / labor unions / workers already contains the terms of transfer of rights protection for workers / laborers who object still works there (same), can be based on the Working Time Agreement Specific (PKWT). As for the existence of agreements that have been agreed upon by both parties prior to the issuance of this Constitutional Court decision, then PKWT which is still ongoing at the company chartering the work or service company workers / laborers, remains valid until the expiry of the agreement.

Officials and business representatives from the 10 Asean Member States and the European Union recently met in Siem Reap, Cambodia, to discuss the challenges and opportunities of free trade agreements, as well as ways that Asean would benefit from free trade agreements.Organised by the EU-Asean's "Enhancing Asean FTA Negotiation Capacity Programme", the event focuses on Asean and the European Union (EU) trade policies, as well as on new and emerging trade issues.

Director General of Ministry of Commerce of Cambodia and as Asean SEOM Chairman, Pich Rithi, has expressed his deep appreciation to the EU for providing technical assistance on the Enhancing Asean FTA Negotiating Capacity Programme to government and private sector representatives of the Asean Member States and Asean Secretariat officials. Rithi said free trade was not only essential for economic development and growth in support of competitiveness, consumer welfare and poverty reduction, it brought together people and ideas.

Meanwhile, Head of Economic and Regional Cooperation of the Delegation of the European Union to Asean, Andreas Roettger, said: "Asean and the EU are already keen and important trading partners - the EU being the largest export market for Asean, he continued to say "both regional blocks could only benefit if this partnership prospered further.

ASEAN as a whole represents the EU's 3rd largest trading partner outside Europe, the EU represents ASEAN's largest export partner

Source: Bernama

Every quarter, EuroCham's Executive Board publishes a country report, distributed to EuroCham Members and select third parties, giving a commentary on the political, social, economic and business issues in Indonesia. Main highlights brought forward in the recent Q4 issue include Indonesia's urgent need to prepare for the openness that will come through the implementation of the ASEAN Economic Community 2015, as well as realizing that as a member of G20 and the largest economy in ASEAN the country now has a responsibility to show regional leadership and embrace globalisation. The Government should refrain from becoming more closed to international trade and investment through Non Tariff Measures and other policies.  In a regional comparison in ASEAN on Non-Tariff Measures (NTM) it is clear that the incidence of NTMs is particularly high in Indonesia. Concerns regarding the logistics cost in Indonesia, which already is one of the highest in Asia are significant as it keeps increasing due to a wide range of regulations, making door-to-door services illegal, driving up prices of imported food stuff and creating significant uncertainties for the logistics sector.  EuroCham stressed in the report how every regulation that is passed must have a clear purpose and align with existing regulation, which is not the case today. Positive regulatory developments have also been observed with the issuance of the land acquisition law which will speed up infrastructure development. The key message remains the same: Indonesia is well placed to progress rapidly in the years to come, as long as the growth is supported by pro-business reforms improving the investment climate. The central issue is whether Indonesia's ruling elite will continue to insist on its substantial share of an underdeveloped economy, or will accept a reduced share of a larger, more open and vibrant economy.