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16 July, 2015Having up-to-date financial company information is crucial for unions to negotiate the best terms for employees. But many businesses block access to their accounts weakening unions’ bargaining power.
In Indonesia, companies are particularly reluctant to disclose their annual financial reports under the guise of ‘confidentiality’, and workers have little idea of how to get hold them.
IndustriALL’s Union Building Project is helping plant-level unions, affiliated to IndustriALL through its 11 affiliates in Indonesia, to obtain and use financial data as part of effective preparations for wage negotiation.
Epson, Indonesia
Epson, a Japanese electronics company, is one of the world’s biggest manufacturers of computer printers. The Indonesia Epson Industry union, affiliated to IndustriALL through FSPMI, represents 8000 workers at its Cikarang plant in Bekasi, West Java.
The union at Indonesia Epson had been trying to get hold of the company’s financial reports, after taking part in collective bargaining training by IndustriALL in 2013.
Abdul Bais, Indonesia Epson Industry union chair, revealed:
In the last few years, when it came to bonus negotiation, the employer always told us that the company wasn’t making any profit and performance was poor. But we refused to accept their baseless argument without receiving the company’s financial report to see the facts for ourselves.
The union wrote to the employer and the Ministry of Trade five times throughout the course of 2013, demanding that Epson provide its financial report to the union.
Enforcing national legislation
After neither the company nor the ministry responded, the union together with FSPMI leaders, turned up the pressure on the government to act by pointing out that Epson was breaking national regulations. They succeeded in compelling the government to send a warning letter to Epson for non-compliance to government regulation number 24/1998 concerning the information on company annual financial reports. All companies operating in Indonesia are obliged to submit their annual financial report to the Ministry of Trade - which Epson had not done.
Pushing international standards
At the same time, the union reminded Epson that, based on chapter three of OECD Guidelines, a multinational company should ensure timely and accurate disclosure of information, including financial reports.
The pressure worked. After a three-year struggle, a series of warning letters from the government and strong support from the federation FSPMI, the union was finally able to get the annual financial reports of the company on 10 April 2015.
Indonesia Epson Industry wrote to the local union, saying:
The company management would like to apologize to the union that, due to certain reasons, we have been so late to respond to union demands made since 2013...We have submitted our financial reports to the Indonesian government on 19 March 2015, for the 2012 and 2013 fiscal years.
Understanding financial reports
Newly armed with the annual reports, the local union of Epson Indonesia attended IndustriALL’s one-day workshop with a certified accountant on “how to read company finance” held in Jakarta on 19 April 2015 with other 45 factory-level unionists.
Edi Zaldi, a participant from Indonesia Epson Industry Union, said: “The company financial report is a very important way for trade unions to have an exact idea of a company’s situation. It acts as a basis for meaningful dialogue and negotiation, and helps lead to a mutual-trust based relationship.”
Sjaiful Patombong, IndustriALL Indonesian Council Chair, said, “Access to annual reports is a basic right for workers and unions to enable sound and constructive collective bargaining. Information is power and IndustriALL’s training on company finance has contributed to strengthening union power, especially in the workplace.”
In August 2015, Indonesia Epson Industry Union will enter into bonus talks with the company. They expect to receive the financial report for 2014 in September.