Community-Based Agencies as the Entrepreneur's Instruments of Control in Post-Soeharto's Indonesia

Abstract

The shift of power in Indonesia, marked by the fall of the Soeharto regime in 1998, has brought changes to state industrial relations policies. One of these changes has been at the level of military involvement in dispute settlement, which has considerably declined since 1998. Eight years on, the liberty of factory owners to employ military personnel to contain labour activism has been considerably constrained. As a result, entrepreneurs have turned to civilian, community-based institutions and local personalities as an alternative avenue of labour control. Examination is made of evolving structures of extra-firm labour control in Tangerang, an industrial centre in the greater Jakarta area, where many local power-holders also own the lodgings rented by migrant manufacturing workers. It describes how their father–child relationship (a special extension of the patron–client relation in the Indonesian context) with their tenants gives them the persuasive capacity to appease discontented workers. This persuasive quality has proven to be even more effective than the coercive approach exercised by the military in the past. Examination is also made of the implications of these developments for industrial relations in the manufacturing sector.