2 April 2003,

Dear Friends,
The ABGTeks garment union in Indonesia has contacted the Clean Clothes Campaign to request action in the case of PT MGSU-Pabuaran, where workers producing for a major U.S. retailer have been experiencing delays in getting their wages paid in full and on time since January. The union has demanded an end to these delays and recognition of the union by management. Meanwhile, management is also pressuring workers by threatening to close the factory and reopen with contract workers. For more information on this case, see the report from ABGteks below. Then take a few minutes to send a letter of concern to PT MGSU-Pabuaran management (a sample letter is included below). Please note that at this time, the union does NOT want protest letters to be sent to the U.S. retailer, therefore we have deleted all references to this company. However, since negotiations with factory management have not yielded any positive results thus far, the union is considering if a strategy targetting the U.S. retailer and the associated risks that the retailer will cut and run from the factory is worthwhile. We will keep you posted of any new developments in this case.

source: ABGTeks, Indonesia
March 20, 2003

Dear Friends

With this letter we are requesting colleagues to send letters of protest from your organisation to the garment company where we have some 300 workers as members and where all our attempts to negotiate with the management have fallen on deaf ears, as have the demands which we recently put forward.

To give you some background information for issuing your protest letters, we are attaching a short chronology of the problems we are facing at this factory. We can only hope that your protest letters will bring more pressure so that the company will be willing to negotiate with us, the leadership of ABGTeks.

Please note: the Government of Indonesia (Department of Manpower and Transmigration) is not yet involved in this dispute. This is because we have previously experienced a similar case which merely became an opportunity for the Department to enter into collusion with the Management. In that case, the factory where our members were employed was closed down so that the company could absolve itself of responsibility, with the full agreement of the Department. We are still in the process of taking legal action against this illegal factory closure. This is why, in this current case, we are not yet willing to involve the Department, for fear that our members will be seriously disadvantaged by any collusion between the company and the Department.

We therefore hope that you will be able to respond to our letter of request for solidarity support, with our grateful thanks for your support and collaboration.

Yours sincerely,

Emelia Yanti
President
ABGteks

and

Misrifah
General Secretary
ABGteks

CHRONOLOGY

Withholding of Wages

PT Mitra Guna Sahabat Utama (Indonesia)

2003

Background

The company PT Mitra Guna Sahabat Utama is a garment company producing finished clothing under various U.S. brand name companies. The owner of the firm is a local entrepreneur called Yohanes Marjohan, using his own capital and bank loans.

The company began operating in 1988 with one factory and by 1998 it had increased production by setting up various branch factories in Cibinong, Bogor, Jakarta, Pabuaran and Serpong (all in the Jakarta and West Java region), where each plant uses the same company name. The current case where wages are being withheld is occurring in its Pabuaran branch, which has been in operation since 1999. Here is a chronology of the case.

9 January 2003 -- According to company rules and usual practice, the 300 workers should have received their wages on this date. However, without any prior meeting with the plant-level Garment Workers' Union (SBG) that exists in the factory, the company withheld a portion of the wages to the value of Rp.200,000, out of the total sum that should have been paid i.e. Rp.500,400. According to the company, the rest would be paid on 14 January 2003.

14 January 2003 -- As according to the unilateral decision of the company, on this day the workers received the remaining unpaid portion of their wages.

9 February 2003 -- Once again the management, without involving the trade union in the factory, took a unilateral decision to withhold wage payments and undertook to pay them on 14 February 2003.

13 February 2003 -- The Central Committee of ABGTeks (Association of Garment and Textile Workers) sent a protest letter to the company and demanded a meeting between the company and the Central Committee of ABGTeks. The company did not reply to this letter but instead, via the plant-level trade union leaders, managers announced that the company would be closing down the factory because it is experiencing serious difficulties and it would prefer to employ contract labour if the factory was to re-open.

14 February 2003 -- The leadership of the plant-level trade union requested the company to pay the workers' wages, as previously promised by the company. However, through the Personnel Manager, management said that the wages could not yet be paid, but perhaps could be on 21 February 2003. So as to muffle protests and strikes, the company's Finance Officer made loans to each worker to the value of Rp.100,000 as something to have while waiting for their wages. The moment that the trade union leaders requested the company to put their promise in writing, the company refused and disparaged the leaders for not believing the company.

21 February 2003 -- As according to the verbal promise given by the company the week previously (14 February 2003), the company paid the workers wages to the value of Rp.500,400 while overtime for the month and other allowances would be paid on 28 February 2003. It could also be seen that the company had removed all raw materials from PT MGSU in Pabuaran to its branch factory in Cibinong on the grounds that the Pabuaran branch would be closed down.

24 February 2003 -- Once again, the Central Leadership of the ABGTeks sent a protest letter to the company, saying that the company was giving the impression that they did not consider the plant-level garment workers' union (SBG) as a trade union which must be involved in all declarations and policies issued by the company.

26 February 2003 -- Two days after the ABGTeks sent their protest letter to the Managing Director, the situation at the factory changed, that is to say raw materials arrived and production resumed, and indeed the Production Manager in a meeting with the trade union said that the PT Mitra Guna Sahabat Utama and all its branches would be producing for [a major U.S. retailer]. Also, because of the size of the order from this retailer, a part of the production on other garments would be handed over to another company.

28 February 2003 -- As arranged by the management, the workers finally got the rest of their wages.

9 March 2003 -- Once again the company repeated the same mistake, i.e. on the day that the workers should have been paid their wages this did not happen. The company, represented by the Personnel Manager, stated that the company had not yet received payment from the Buyer. The company said that wages would be paid on 14 March but perhaps not in full. When the trade union requested this promise in writing from the company, including interest for the intervening period as provided for under Government Regulation on the Protection of Wages No.8 1981, it was clear that the company was not willing to respond to the trade union's request.

Important Notes:

… Among the five branches owned by PT Mitra Guna Sahabat Utama, only the Pabuaran branch is experiencing this delay in wage payments.

… According to the scenario which the company is trying to promote, it is suffering a financial crisis or bankruptcy; however, the evidence is that the company is still stable. The company's plan is to close down its Pabuaran branch with mass redundancies, and at a later date reopen with contract labour. This already happened at its Cibinong branch where all workers are contract workers with wages below minimum standard and there is no protection of other rights such as Labour Force Social Insurance.

… All factories (buildings) are owned by PT Mitra Guna Sahabat Utama itself and not contracted in, as happens with many other firms.

… The five branch factories owned by Yohanes Marjohan only differ in their Director or Production Manager whereas the entire production from all of them is managed by the Managing Director who is the majority shareholder, i.e. Yohanes Marjohan.

… The plant-level trade union has existed in this factory since January 2001 but during these two years the company has never recognised its existence. Indeed, requests to the company to achieve a Collective Bargaining Agreement have not received any response whatsoever. What is more, until now the company has never made open the contents of its Company Regulations, even though these regulations are always being used as a tool to regulate and bring pressure on the workers.

… Since January 2003 and until now, this company (including its branches) have only been producing for one major U.S. retailer.

ACTION REQUEST

Please send protest letters to:

Mr. Yohanes Marjohan
Managing Director
PT Mitra Guna Sahabat Utama
Jalan Meruya Hilir, Taman Kebun Jeruk Blok AX/11-12
P.O. Box 4650 Jakarta 11630
Indonesia
Tel: +62-21 584 5468, 584 1889
Fax: +62-21 584 1896

In order to ensure that Marjohan receives your letters of concern as quickly as possible. Please fax him at the PT MGSU head office, listed above, and at the following branches of his company since he is not always at the head office.

PT MGSU Branches

Bogor: Tel/Fax: +62-251 501128, 503163
Cibinong: Tel/Fax: +62-21 875 2193 875
4680 Pabuaran:
Tel/Fax: +62-21 876 4028

Please send copies of your protest letters to:

1. Central Committee, ABGTeks, Jakarta. Tel/Fax: +62-21 786 4203

2. Central Committee, GSBI, Jakarta. Tel/Fax: +62-21 786 4203

3. Central Committee, Perbupas, Jakarta. Tel/Fax: +62-21 786 4203

4. Legal Aid Institute, Jakarta. Tel/Fax: +62-21 314 5518

Sample Letter:

Please adapt the following sample letter or write your own and fax it today.

Dear Mr. Marjohan,

I am contacting you to express my concern regarding reports that since January workers at PT MGSU-Pabuaran have had to endure wage delays. I understand that for months workers have regularly only been paid a portion of their wages and have had to engage in a time-consuming and unneccessary process to demand full payment of their wages.

According to union reports, workers at your factory have not received all that they are owed for hours worked producing for a major U.S. retailer, particularly overtime hours. I understand that the union has attempted to resolve this ongoing problem but you have been unwilling to take steps to pay your employees the money they are owed in full on time. Instead you have regularly delayed payments and threatened to close down the factory. This is not a socially-responsible manner in which to operate.

I urge you to pay the workers the money they are owed promptly and in full. I also believe that you must enter into a more meaningful dialogue with the SBG union. As you know, consumers and retailers (including the U.S. retailer you are currently producing garments for) are concerned that their garments are produced in good working conditions, including prompt payment of wages in full and freedom of association. Therefore, please take steps to come in compliance with such internationally-recognized standards in your workplace.

Please inform me of any action you take to address these concerns.

Sincerely,

[insert your name/organization here]