Publicly listed instant noodle maker PT Indofood Sukses Makmur, owned by the Salim Group, has been accused of underpaying hundreds of workers employed on its Singapore-flagged cargo and tanker vessels, which have been sailing under the flag of convenience (FoC) in an apparent attempt to avoid paying taxes to the Indonesian government.
Unfair labour practices were alleged when the Australian Maritime Union cracked down on the MV Ocean Hiryu in Melbourne Port when it was transporting wheat from Australia to Indonesia recently.
The International Transport Workers' Federation (ITF) in Australia later found out that Indofood had six units of FoC cargo and tanker vessels all with Indonesian crews.
ITF Australia assistant coordinator Matt Purcell said all members of the crew were paid around US$600 (S$745) per month, including extra-time payments and insurance coverage, which was below International Labor Organisation (ILO) and ITF standards.
"The vessels are obliged to pay their crews in accordance with the ILO, ITF or Singaporean standards, although they're registered in Jakarta because they are sailing under FoCs and their operators have never negotiated industrial relations with any unions in Indonesia, Singapore or Australia," Purcell told The Jakarta Post recently.
Besides the MV Ocean Hiryu, Indofood also has the MV Ocean Glory, the MV Ocean Amazing, the MV Ocean Phoenix, the MV Ruby Indian and the MV Emerald Indian, which are operated by Apex Ship Management Pte. Ltd., a shipping agent that was believed to be owned by the Salim Group in Singapore.
The Singapore base also has another two vessels, the Hudong Zhonghua H1677A-9624964 and the Hudong Zhonghua H1678A-9624976, which are currently under construction in China.
In Indonesia, the company has operated a number of Indonesia-flagged ships including the Bogasari Satu, the Bogasari Lima, the Bogasari Tujuh, the Ocean Sun, the Sapphire, the Sri Indra, the Quantum One and seven tug boats.
Purcell said ITF Australia had warned Apex Ship Management several times about improving labour conditions in the vessels in accordance with international standards, but both Indofood and Apex had yet to respond.
The minimum wage in the maritime sector is US$850 according to ILO standards and US$1,150 according to ITF standards. Vessel operators are also obliged to pay extra time and insure all workers in healthcare, occupational accidents and old-age risk schemes.
The Indonesian Seafarers' Association (KPI), the ITF's Indonesian affiliate, confirmed it had coordinated with the maritime workers unions in Singapore and Australia to boycott Indofood's vessels and launch a negative campaign against the firm and all of its units in the two countries and elsewhere.
"The Salim Group, now controlled by the late Sudono Salim's prominent and influential son Anthony Salim, is too greedy. It has enjoyed various facilities and incentives to do business in the country since the New Order era, but it has underpaid its workers and has shown no commitment to making contributions to progress in the country," KPI chairman Hanafi said on Sunday.
Hanafi also accused the Salim Group of evading taxes by using the Singapore flag for its vessels serving international routes.
"This is a serious violation of Presidential Instruction No. 2/2007 on the cabotage principle requiring all Indonesian ships to carry the national flag and pay taxes to the state. Indonesia is not a place for looting and stealing," he said.
Indofood Sukses Makmur spokesman Indrayana denied the accusation.
He said his company had only five cargo vessels and the management had paid the vessels' crews in accordance with Singaporean and Indonesian standards.