TEMPO.CO, Jakarta - The chair of the Indonesia Employers’ Association (Apindo), Shinta Widjaja Kamdani, responded to President Prabowo Subianto's plan to eliminate the outsourcing system. She believes that the plan needs to be thoroughly studied.
The government must first explain whether the abolition is only applicable to certain types of work, forms of employment relationship, or the entire outsourcing practice. Additionally, she asserted that outsourcing is not solely a matter of labor, but part of a business strategy commonly applied globally.
Shinta said many large companies carry out core functions with permanent workers and outsource supporting work to third parties. "Outsourcing maintains the flexibility and competitiveness of companies in the global market," said Shinta when contacted on Sunday, May 4, 2025.
She warned that the wholesale abolition of this system could have adverse effects on labor-intensive industries such as manufacturing, logistics, and services. She mentioned that ASEAN countries such as Vietnam, Thailand, Malaysia, and the Philippines are actually strengthening their outsourcing systems with better governance.
"Indonesia should indeed improve its outsourcing practices, but not necessarily eliminate them entirely," she said.
Shinta requested that labor policies continue to follow global practices and support national competitiveness. She suggested that the government focus on improving governance, rather than eliminating the system.
"Employers are ready to assist the government to study the policy. Any decision must consider the protection of workers, business sustainability, investment climate, and national competitiveness," she said. She also emphasized the importance of discussions based on technical and legal studies, and fairly taking into account the interests of all relevant parties.
Previously, President Prabowo responded to labor demands for the elimination of outsourcing during the Labor Day commemoration at Monas square on May 1, 2025. Prabowo acknowledged the demands but asked all parties to be realistic.
"I will ask the National Workers Welfare Council to study the best way to eliminate outsourcing. But we also have to be realistic," said Prabowo.
According to Prabowo, the protection of labor and guarantees for investors must work in tandem. "If there is no investment, there are no factories. If there are no factories, workers also cannot work," he said. The elimination of outsourcing is one of the six main demands of the labor force conveyed during this year's May Day commemoration.
Dani Aswara contributed to the writing of this article.
Editor’s Choice: Jakarta May Day: Prabowo Addresses Challenges in Phasing Out Outsourcing
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