Indonesia is still opened for foreign investment. The government keeps trying to improve and simplify various regulations in order to strengthen the comparative advantage amongst the developing countries in this region. Efforts have been made to implement proper regulations in order to attract foreign investors to put their investment in Indonesia, In the past i.e. during the New Order era, Industrial Relations function had been a priority for the authorities, eg Manpower Dept. to look after because the Government was very much concerned in maintaining a peaceful working condition in the industry.
For over 30 years, the industry in general was in good condition, people working relatively peaceful in the factories. But, when the New Order was no longer in power, the Industrial Relations condition changed much. The new Government seemed having difficulties in controlling the labor movement. So many strikes or labor unrest occurred in many areas in Indonesia. This condition made certain PMA (Foreign Investment) companies felt uncomfortable, unable to cope with the situation. Certain investors moved overseas. That should not happen if the Top Management could handle that unfavorable condition.
It is so important for the expatriate executives working in Indonesia to understand the present Industrial Relations condition, bearing in mind that from time to time the Manpower Laws might have changed, while business must go on as usual and the company ought to comply with all the regulations.
In the labor intensive industry dealing with work force need certain technique and strategy in order to manage the labor properly. It is most important that the HRD officers are in the same track with the Expatriate Executives. They should have a similar point of view in looking at the Industrial Relations matters and together safeguard the company’s operation.