Singaporean business players are paying close attention to the dynamics of labour wage determination in Batam, according to a top envoy. Worker groups have urged the Batam administration to set the city's minimum wage at Rp 3.3 million (S$350) in 2015, an increase of around 45 per cent from the current minimum wage.
Indonesian Ambassador to Singapore Andri Hadi said that many business groups in Batam considered so large an increase drastic; however, he, added, Singaporean business players, the majority investors in the electronic manufacturing and shipyard industries in Batam and Riau Islands, did not consider the workers' demands unreasonable.
Andri explained that for many Singaporean companies, maintaining a peaceful investment climate and a healthy work environment free from violent labour protests was crucial.
"As a diplomat, I'm not happy about the so-called 'low minimum wage' for our workers and I can tell you that for Singaporean investors, the most important thing is that relations between investors, workers and the government run well - a situation in which the workers support a good and healthy investment climate and restrain from violent deeds," said Andri in Batam.
He said Singaporean investors were paying close attention to the dynamics of minimum wage determination in Batam and that they hoped that the Batam minimum wage in 2015 would be in line with their financial capacity.
Andri said that neither Singaporean investors nor business groups investing in Batam had as yet conveyed formal responses to the minimum wage proposed by the labour unions.
"They haven't told us what they think about the minimum wage proposal. But in a number of meetings, they have highlighted that the most important thing is to maintain a safe and peaceful investment climate," said Andri.
According to the Batam Free Trade Zone Management Agency (BP-FTZ), 588 foreign investment companies are currently operating in Batam, most of them in the electronic manufacturing sector. Of the total, 410 companies are from Singapore followed by Malaysia with 52, Taiwan with 23 and Korea with 19, while the remainder come from other countries.
The amount of Singaporean investment in Batam reaches S$1 billion, while its joint venture projects are worth S$1.57 billion.