Indonesia Country Study 2018

The garment industry is a significant contributor to Indonesia’s large economy. In fact, it was the fifth greatest contributor to Indonesia’s non-oil and gas manufacturing export figures from 2014 to 2017, growing at an average of 1.1 % during that period. It is also an important source of employment, accounting for around 26.6 % of jobs in the manufacturing sector. The industry is affected by changes to economic conditions in the US and Europe, the major destinations for its products. It also faces the challenge of competing with other garment-producing countries such as Vietnam and Bangladesh, with costs including labour, affecting competitiveness.

Another challenge for the garment industry lies in meeting international expectations about the treatment of workers. Conditions in garment factories vary considerably. They are generally much worse in medium and small enterprises, which do not attract the kinds of scrutiny that large suppliers to international brands are subjected to. The industry has received a great deal of attention from international and local NGOs and trade unions, but there remains much to be done before the standards embedded in FWF Code of Labour Practice are fully met even in more compliant segments of the sector. In terms of labour rights, Indonesia has signed key international human rights instruments, including the Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW) and all eight core International Labour Organization (ILO) conventions. However, the extent to which these commitments are reflected in Indonesian legislation and in its implementation, varies. Like many countries in the region, it also continues to experience serious problems in terms of the implementation of many aspects of its legal framework. This core problem has led to issues with freedom of association and the right to bargain collectively; working hours and conditions, including the right of women to be free of sexual harassment in the workplace;  occupational health and safety; and the right to a living wage. FWF will continue to provide updated information on Indonesia at www.fairwear.org and will update this country study on a periodic basis in the future.

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