Indonesia- some ongoing bilateral issues with its smaller neighbours

Updated On: Jun 29, 2007

The case of Ceriyati, an Indonesian maid working in Malaysiahas been a spotlight in the media of both countries in the past two weeks.

Ceriyati Dapin, 33, made headlines after she used a makeshift rope of knotted pieces of cloth to flee the 15th storey apartment where she worked after allegedly being beaten and having threats made to her life by her employers, reports said last week.

Malaysian police have arrested her employer and Malaysian authorities suspended 20 maid agencies and blacklisted 85 employers after pressure and complaints of cheating, breaching of contract and unpaid wages.

The people in Indonesia are very angry with the situation and consider this matter as very sensitive. This case, although not the first one, has again triggered strong reactions; among those are critics from NGOs and political observers who want the Indonesian government to be more attentive and provide protection to its people abroad. Lawmakers blamed poor coordination between the manpower and foreign ministries for this. The Indonesian government responded by asking the receiving country to improve working conditions and treatment.

Detiknews online portal reported that more than 1,000 Indonesian migrant workers were abandoned by their employers in Malaysia. Head of Task Force of Protection and Service of Indonesian nationals at the Indonesian Embassy to Malaysia, Tatang Razak confirmed that among 1,000 who ran away and reported to the embassy, most complained about unpaid salaries and mistreatment including sexual abuse.

Indonesia's efforts to tackle the problem are mostly reactive and still seem to be far from the people's expectation. The newly founded National Agency for Replacement and Protection of Indonesian Migrant Workers (BNP2) is expected to improve the situation. Antara also reported that he Indonesian government will soon set up integrated services abroad to handle problems effecting Indonesian citizens. However, the general perception is that Indonesian government has not done much yet to protect its people who work overseas.

Jakarta and Kuala Lumpur have signed a memorandum on migrant workers in 2004. But the issue of migrant workers continues to be sensitive and delicate in the relation of both countries.

Meanwhile, Indonesia's relation with its other neighbour Singapore is still going through a hard time. Last Monday, the meeting between the House of Representative Commission I (for defence and foreign affairs) and the Foreign Minister Hassan Wirayuda was marked by heated debate. As the legislators previously have expressed their views over the Defence Cooperation Agreement between Indonesia andSingapore, they called for the agreement's abrogation. The House decided to rebuff the DCA in its current form or in other words would accept it if only there are revisions. The government has not submitted the DCA yet to the House for ratification, so some observers think it is too early for them to refuse it. Three Implementation Arrangements (IAs) are still being discussed between the two parties. Wirayuda said he would try to improve the substance of the agreement when the two governments discussed the Implementation Arrangements (IA) and said that the government and the House had not agreed on rejecting the DCA.

Another issue is the Indonesia's Business Competition Supervisory Commission (KPPU)'s allegation that ST Telemedia has violated the Anti-Monopoly Law in its Indosat investment. ST Telemedia denied the allegations and said it has complied with Indonesia's laws and regulations. Temasek's wholly owned ST Telemedia owns 39.96 percent of IndosatIndonesia's second largest mobile phone operator . Temasek also owns 56 percent of Singapore Telecommunications, which has a 35 percent stake in Indonesia's largest cellular operator, unlisted PT Telkomsel.

According to the statement from ST Telemedia released this week, “The acquisition was approved by the government of Indonesia, including Indonesia's People's Representative Council, and its relevant regulatory authorities.” STT said in its statement that these anti-competitive allegations have 'no merit' as Indosat 'competes vigorously' with other mobile phone operators, such as state-owned PT Telkom, PT Telkomsel and PT Excelcomindo.

'We are committed not only to the good performance of the company, as evident in recent results, but also to its good corporate governance practices.'

SingTel Group owns 35 percent of Telkomsel and the rest 65 percent is still owned by Indonesian government. STT, a wholly-owned subsidiary of Temasek, indirectly owns 31.4 percent of Indosat through its own subsidiary Asia Mobile Holdings (AMH). AMH, which has a total 41.94 percent stake in Indosat, is 75 percent owned by STT and 25 percent by Qatar Telecom. The state holds a 14.6 percent stake in Indosat, with the investing public owning the remaining 43.4 percent.

A recent study by the Universityof Indonesia referred to the possibility of Telkomsel and Indosat, which controls more than 80 percent of Indonesia's mobile telecoms market, establishing a price cartel inIndonesia.

A CSIS researcher in her op-ed at Jakarta Post however argued that since the Indonesian government still controls 65 percent of Telkomsel and owns 14.29 percent of Indosat -- and the investing public has 44 percent of Indosat -- it is difficult to determine if Telkomsel and Indosat have colluded in a price cartel. After all, the interests of the controlling share holders are quite different.

The case arose hard on the heels of the recent resurfacing of nationalistic demands for a buy-back of STT's stake in Indosat, amid reported interest in Indosat on the part of businessman Setiawan Djody, and prior to that, from a Russian company.

The view of economic nationalism seems to be dominant in Indonesia's response to globalization. Interestingly, Indonesia's mobile telephone sector has been penetrated by foreign investment, not only fromSingapore. Khazanah Malaysiaowns 16.81 percent (direct) and 59.67 percent (via Telekom Malaysia) of Excelcomindo, the third largest mobile operator. Saudi Telecom has bought 51 percent share of Natrindo (Lippo Telecom) from Maxis Malaysia and Qatar Telecom has 25% share in AMH together with STT.

Leong Keng Thai from Singapore Infocomm Development Authority (IDA) denied the monopoly allegation and explained the practice of market liberalization in Singapore's telecommunication industry. Prices for international calls have fallen by 90 percent, while the international leased line rates have been knocked down by up to 95 percent since the government launched its full liberalization policy in 2000.

Last but not least, Timor Leste, that used to be Indonesia's youngest province, is entering a new era as an independent nation, with the parliamentary election coming up on 30 June. Indonesiais credited for playing a critical role in helping the young Timor Leste achieve welfare and stability. This has been reflected in Presidet Ramos Horta's first official visit abroad to Indonesia.

Dr. Atul Khare, the UN Secretary General`s Special Representative for Timor Leste and head of the UN Integrated Mission in Timor Leste (UNMIT) appealed for greater assistance from Indonesia for its small neighbour. He was quoted by Antara saying, “Indonesia has been assisting Timor Leste all along but greater assistance is expected for the tiny country, especially in the development of human resources capacity and police training. …. And as a non-permanent member of the UN Security Council Indonesiacan assist UNMIT when discussions on Timor Leste take place in the Council.” In addition, Dr Khare also called on Indonesia to ensure the functioning of a “credible Indonesia-East Timor truth commission” to look into the carnage of 1999 when majority of East Timorese voted for independence fromIndonesia. (28 June 2007)


Indonesia wants action on Malaysian maids abuse cases : Envoy (Antara, 25 June 2007)

1000 Indonesian migrant workers in Malaysia abandoned by employers (Detiknews.com, 26 Jun. 07)

National Agency for Placement and Protection of Indonesian Migrant Workers (BNP2) far from ideal (Detiknews.com, 23 Jun.07)

KL suspends maid agencies, blacklists employers after complaints (Jakarta Post, 22 June 2007)

Lawmakers slam labor, foreign ministries for migrant worker woes (Jakarta Post, 26 June 2007)

Our maids in Malaysia(Jakarta Post, 21 June 2007)

Maid's abuse saddens Yudhoyono (Jakarta Post, 21 June 2007)

Govt to set up integrated services to help Indonesians abroad (Antara, 26 June 2007)

ST Telemedia denies wrongdoing in Indosat investment (Straits Times, 22 June 2007)

INDOSAT STAKE ST Telemedia denies anti-competitive claims (Straits Times, 23 June 2007)

STT denies monopoly allegations (Jakarta Post, 23 June 2007)

With growth likely, STT sees no reason to sell stake in Indosat (Jakarta Post, 22 June 2007)

Competition brings best out of S'pore's telecom sector: IDA (Jakarta Post, 25 June 2007)

Is competition absent in RI telecom industry? (JakartaPost, 8 June 2007)

UN envoy: TimorLeste needs greater assistance from Indonesia(Antara, 26 June 2007)

UN envory seeks credible Indonesia-East Timor truth Commission (Antara, 27 June 2007)