BUSINESS ETHICS MG363Y

FINAL MINI RESEARCH

“THE ROLE OF LABOR LAW IN REDUCING CHILD LABOR IN
INDONESIA”

By:
Gabriella Anggita Dea Christin 212016511
Verina Cornelia 212016514
Vicka Nancy Onthoni 212016516
Asahi Matsumoto 122018901

ICMAP MANAGEMENT
FACULTY OF ECONOMICS AND BUSINESS
SATYA WACANA CHRISTIAN UNIVERSITY
SALATIGA
2018/2019
 THE ROLE OF LABOR LAW IN REDUCING CHILD LABOR IN INDONESIA

Gabriella Anggita Dea Christin

Faculty of Economics and Business, Satya Wacana Christian University
212016511@student.uksw.edu

Verina Cornelia
Faculty of Economics and Business, Satya Wacana Christian University
212016514@student.uksw.edu

Vicka Nancy Onthoni

Faculty of Economics and Business, Satya Wacana Christian University
212016516@student.uksw.edu

Asahi Matsumoto
Faculty of Economics and Business, Satya Wacana Christian University
122018901@student.uksw.edu

ABSTRACT

Child labor has been a topic to be concerned especially in relation with business ethics,
labor law, poverty, and education. Although Indonesia has made progress in its endeavors to
reduce child labor, occurrence of child labor still exists. With the existing legal basis, the
government are expected to carry through the effort efficiently. However, their progress is still
considered as slow. This research focuses on exploring the law experts’ perspectives on the
labor law effectiveness by using qualitative method. Due to time constraints, the respondents
are limited those who have profound understanding regarding the issues. From the in-depth
interview, the researchers discovered that, surprisingly, the main issue is not within the legal
basis, but within the implementation of the law. The lack of education and poverty are the main
drivers of those of parents sending their children to work. In addition, counterfeit identity issue
remains difficult to be controlled from the company’s perspectives. Pressure on production
targets also induce companies to hire child labor. In other words, the labor law is sufficient to
protect the rights of workers and children in Indonesia. Factors behind the misconduct are the
primary cause of child labor and further efforts should be focused on improving the education
and economy.

Keywords:
Child labor, labor law
INTRODUCTION
For decades, child labor has been an important global issue associated with inadequate
educational opportunities, poverty and gender inequality (Journal of Public Health, 2018). The
problem of child labor has moved from a matter of regional and national concern to one of
international debate and possible global persuasion and policy intervention (Basu & Tzannatos,
2003). Child labor refers to the work that holds back children from their childhood, potential,
and dignity as well as work that can jeopardize both of the child’s mental and physical
development (ILO, n.d.). Another source defines child labor as a violation of international law
and national legislation in which a work that damage and hazard the child is conducted (UN,
n.d.). These works are harmful to the child and should therefore be eliminated. (Md.
Kamruzzaman, 2015). Driven by lack of decent work opportunities for adolescents and adults,
emergencies, and migration, child labor is still prevailing worldwide. It is also a consequence
of discrimination that results in social inequities, where children from lower tiers have low
access to education and prone to dropping out of school to help supporting the family through
work, as well as migrant children’s susceptibility to illicit labor (UNICEF, 2017). Child labor
is also a result of poverty as shown by case studies, stating that, the reason behind impoverished
parents sending their children to work is to survive from poverty (Grootaert & Kanbur, 1995).
According to ILO estimation in 2012, over 167 million children are engaged in some form
of child labor and over 85 million are engaged in hazardous work. Although the number has
declined in 2016, Asia and the Pacific Region still on the second rank after Africa on the
number of children in employment with more than 90 million children involved. Indonesia as
a country where 27.3 percent of its total population (260 million people) is under the age of 15
(CIA World Factbook), where 6.9 percent of them are working children and 1.76 million are
child labors as reported on Indonesian Child Workers survey by BPS - ILO/IPEC in 2009.
Despite regulation and law has been made to prevent the unethical business practice on child
labor, there are still some issues on its implementation.
Child labor has become a global issue as well as national problem in Indonesia that requires
immediate actions and sustainable commitments to put it to an end. The immediate actions to
realize Indonesia’s commitment to be free of child labor is part of the agenda to implement the
Global Roadmap as well as the National Action Plan (NAP) for Achieving the Elimination of
the Worst Forms of Child Labor (WFCL) in 2016. The International Labour Office (ILO)
shows their support under the motto of “Future without Child Labor” as a global effort and
movement to eliminate the child labor and this commitment to implement the roadmap
becomes a strategic agenda for all parties around the world.
 In 2017, Indonesia made a progress in eradicating worst forms of child labor. The
government enhance human trafficking protections through ratifying the Association of
Southeast Asian Nations Convention Against Trafficking in Persons. The Ministry of
Manpower removed 18,401 children in 7 provinces and 46 regencies from garbage scavenging
and street work. The Indonesian National Police cooperated with Interpol and the US Federal
Bureau of Investigation to apprehend online child pornography group (ILO, 2012). However,
child labor conduct still happens in Indonesia. Largest occurrence of child labor in agricultural
sectors can be found in North Sumatra with 155,196 children, Central Java with 204,406, and
East Java with 224,075 (FactsofIndonesia.com, 2017).
Our research will encourage governments and companies to commit themselves to the
ethical decision and behavior. As for the benefit of this research, by understanding the reason
behind the slow progress of reducing child labor, government can solve problems from factors
which impede the efforts. For instance, by ensuring the high education rate which will bring
benefit to the country in the future. For the company, they can prevent the damage of scandals
related in child labor which brings huge damage and loss to the company. Also, company will
obtain a good brand image by ethical entrepreneurship. Finally, the readers will also be able to
comprehend the connection between child labor and labor law from an in-depth perspective of
law experts.

Objectives
The aim of this study is to explore the shortcoming of current labor law on the fight against
child labor. In addition, the researchers want to see the issue from the perspective of experts in
the law and education areas who have profound understanding on Indonesia’s current legal
basis and reasoning of how the law enforcement contribute to the slow progress of child labor
eradication. Findings uncovered in this research will, therefore, provide suggestion and
consideration to legislator and government in improving the law enforcement or creating policy
on the child protection against child labor.

Research Gap
Previous study conducted by Nina Triningsih and Masaru Ichihashi in 2010 analyzed the
impact of poverty and educational policy on child labor in Indonesia. The research was
conducted by using only secondary data from Indonesia Family Life Survey (IFLS) to conclude
that education policy can reduce the child labor in rural areas. In response to the slow progress
of child labor eradication, differently, this research will focus on discovering the shortcoming
of existing legal basis from law experts, such as professor in field of law and attorney, in order
to provide profound understanding about shortcomings which cause the slow progress of child
labor eradication in a more general context, Indonesia.

Research Problem
The government has, indeed, make progress in eradicating child labor. Still, despite the
availability of sturdy legal basis, the progress is still considered as slow (Equaltimes, 2018). In
response, the researchers want to comprehend the experts’ perspectives on the shortcoming of
current labor law likewise the suggested way to implement the legal basis on the means to
fasten the process of eradicating child labor.

Research Questions
1. Is there any shortcoming on current legal basis to fight against child labor?
2. How should government implement labor law to fasten the eradication of child labor?

LITERATURE REVIEW
Child Labor
The term ‘child labor’ has several definitions that should be addressed prior to discussion
about the issue. It is important to realize that we cannot classify every work done by children
as child labor. It is described as work that does not provide children of their childhood, potential
and dignity that is harmful to physical and mental development according to International
Labor Organization (ILO). Specifically, it involves work that mentally, socially. morally, or
physically threatening to children, meddles with their education by hindering them from
attending school, force them to leave school ahead of time, or demand them to combine school
with excessive work. A child can be classified as a laborer if he/she is economically active or
gainfully employed, meaning, his/her work is resulting in output for the market and is
compensated (Basu, 1999).
Child labor in Indonesia is defined as employed children under 15 years old. Various news
sources state that child labor in Indonesia with the age of 7-14 years old has reached between
2 million to 5 million child workers. Children are forced to work willingly and unwillingly to
support their family in the poverty situation. Moreover, companies incredibly high benchmark
of result creates a situation where parents ask their child to accompany them into their daily
work to reach certain quotas (Siddqi & Patrinos).
 By 2009, 3 million children in Indonesia were estimated to be in employment, ranging
from age 7-15 years old or 7.9% of the total children population in this age group, followed by
age 7-12 and 13-15 at 4.9% and 13.6%, respectively. Not all of the work done by children are
categorized as child labor. According to the law, with minimum age of 15, those regarded as
child labor are children in the 5-14 age group. Many young children in Indonesia are found
working with almost 536,000 children under 10 years old were already at work by 2008. In
regards to gender, employment rate of boys is higher compared to girls. In other words, male
child labor in Indonesia accounts for 55% of the total population. Notice that children engaging
in work force are more prevalent in rural areas compared in urban areas. Within the sector of
activity, agricultural activities in rural areas are of dominance at 64.2%, followed by services
sectors in urban areas at 45.5%. On average, these working children spend 15.6 hours per week
in employment as, mostly, unpaid family workers at 85.7% of the total children in employment
(ILO, 2012).

Labor Law
With the purpose to eliminate child labor, various policies and programs are designed to
tackle the issue and protect the children. The worldwide basis for child protection is in the
International Labour Organization (ILO) which includes Convention No. 138 concerning
minimum age for admission to employment which ranges from 14 to 16 years old (ILO, 1973)
and Recommendation No. 146 (1973); ILO Convention No. 182 concerning the prohibition
and immediate action for the elimination of the worst forms of child labor and
Recommendation No. 190 (1999); and the United Nations Convention on the Rights of the
Child (UNICEF, 2017). The types of the worst form are specified in Article 3 point (a) to (d)
with types of work referred under Article 3(d), or work that by its nature harm the health, safety,
or morals of children, shall be determined by national laws (ILO, 1999). Three categories are
given to differentiate child labor that is banned under international law. The first category is
unconditional worst forms which includes slavery, trafficking, debt enslavement, forced labor,
force recruitment of children for armed conflict purpose, prostitution and pornography, and
illegal activities. The second category is labor performed by under-aged children which will
likely hinder the child from education and full development. The last category is labor that,
either due to its nature or conditions in which it is carried out, harm the physical, mental, or
moral well-being of the child (UN, n.d.). This fundamental basis has strengthened the global
general agreement on child labor eradication and provide entry point to tackle the common
child labor problem. The increasing globalization also stimulate awareness on the issue. For
instance, with international labor standards as the basis, a country can ban products with child
labor inputs and customers can boycott them.
To support the implementation of ILO Convention No. 138 year 1973 and ILO Convention
No. 182 with Law No. 20 year 1999, National Action Committee (NAC) for the Elimination
of the Worst Forms of Child Labor (WFCL) was established under the Presidential Decree No.
12 year 2001, followed by Presidential Decree Number 59 in 2002 that was issued to endorse
National Action Plan (NAP). With regards to NAP, Ministerial Decree Number 235 in 2003
was developed alongside to define harmful occupations in which children can’t work. It lists
the conditions of work where under 18 years old children should not be employed. Child
Protection Act 23/2002 with basic principles in the Convention on the Rights of the Child was
issued to provide establishment of Commission for the protection of Indonesian Children. It
includes penalties for those proven guilty of exploiting children. It also includes government’s
responsibility to provide all children with free of charge birth certificate and nine years basic
education (ILO, 2012).

RESEARCH METHOD
Population and Sampling
This research will use purposive sampling of qualitative method which will use
predetermined criteria for the respondents according to the research question. The specific type
of purposeful sampling will be expert sampling as it will put focus into a certain expertise
despite limited time, lack of empirical evidence in an area and high levels of uncertainty in the
issue. The targeted population includes professionals in Central Java.

Data Collection
This study will be based on primary data collected through experts in the legal field. Using
in-depth interview, the researchers will create a framework of questions that is deemed suitable
for the topic through available literature. Through interview, the researchers will be able to
collect information based on previous experience and perspective on the current topic (Family
Health International). By using in-depth interview, the researcher will ask, listen, and record
answers from an individual on a structured format questions in an in-depth manner. The type
of questions in this interview vary from hypothetical to interpretative.

Methodological Choice
 This study has applied a mono-method choice based on qualitative data collection and
analysis in order to obtain rich and deep answers from the respondents. The method of
exploratory research allows to highlight new issues that is previously not highlighted in
previous research.

Technique analysis
In this study, the researchers will use narrative analysis where the core activity is to
reformulate stories presented by people in different contexts and based on the different
experiences of the respondents.

ANALYSIS AND DISCUSSION

Child labor in Indonesia is difficult to monitor, as the regions have their own image on
how workers are employed to fulfill the production quotas. There are several reasons as to the
child laborers such as helping their parent’s production quota, gain experience, dire financial
needs, and more. The implementation of the law on child labor in Indonesia is weak in
comparison to the laws that have concrete and clear explanation on the execution process. It is
important to be aware on the lack of education in different parts of the region. The suburb
regions of Indonesia require financial stability that children also get into the industry to get
enough money to fulfill their daily needs.
According to the respondent, from a normative perspective, the law in Indonesia already
determined the set of qualifications for a company or the third party as the provider of job as
well as the people who are the workers or the job seekers. The normative aspect can take its
proper effect depending on the situation of the society in Indonesia, especially on the economy
factor and the culture of the society. In other words, an educated society with a proper economy
situation will support the implementation of the labor law itself, while most uneducated society
in Indonesia works for survival reason only. It also becomes the reason on why the less or
uneducated society only think about how to get paid on a daily basis rather than the rules or
laws that set qualification for them to work properly.
Geographic factor also plays an important role to determine the needs for the society to
understand about the implication against the law. In Indonesia, each region has its own ‘brand’
regarding the labor type, i.e. Batang regency in central Java has been known for its good
worker, so a company prefer to have them as their worker. Moreover, a company tend to build
its factory to a region with a cheap labor like Java so that they can keep the production cost at
a lower cost and fulfill their target.
In regards to the same topic, if we analyze different regions in Indonesia then the result
will be too contrast depending on the characteristic of each territory. Law No. 13 year 2003
regarding employment has particular section for child to be categorized as a labor along with
other explanations from Article 68 to Article 75. On the Article 68, it is clearly stated that
“employers are prohibited from employing children”. But, based on the respondent’s
experience, most of the companies already tried to obey the labor law of Indonesia because
they do not want to have any problem on legal issues. In practice, most of the underaged
workers create a counterfeit identity to qualify for the job. According to Article 70 paragraph
2, the children refers to whoever at least fourteen years old. As an addition, it also points out
on the type of work which prohibited for children along with some detail explanations on the
situations on those articles.
In worst cases, sometimes their parents give full support to their children because they
want them to get an experience of working or support the family’s needs. Manufacturing
industry usually needs a big number of worker and the system for worker allows the third party
to outsource the worker from outside the company in terms of production. It gives a chance for
using a child labor since the company needs a big number of productive workers for a particular
time. Giving that situation, deep investigation on the validity of each person personal data
would not be sufficient in a short period of time. It is recommended by the respondent to have
a database of each workers related with the company to avoid child labour.
From the company perspective as the job provider, the intentional misconduct relatively
happens due to the competition factors with companies in the same industry. As a result, the
company pushes its production by using child labor to fulfill the target. The consideration on
using child labor is because they are physically ready to work but unqualified on age factor by
law. Another reason is productivity, because the child laborers have better stamina to work for
a longer period. By doing so, the company can press its labor cost to the minimum and generate
higher value on their sales.
Minimum production cost usually leads to minimum control on the safety on the labor
side, especially healthy risk on the long term. Indeed, it requires time to support the
implementation of the protection of child labor. As the purpose of the child labor to work in
Indonesia is to increase the family’s social economic condition, full support from the company
is needed to give information or education toward the parents so that it can boost the awareness
on risks and consequences for their children as a labor in the future. Based on the experience
of the respondent, while handling oil palm plantations belonging to Prabowo and Ruhut
Panjaitan in Penajam Paser, Kalimantan, the parents bring home their works so that they can
ask their children to do it together without getting discovered by the company or even breaking
the law.
Another respondent also agrees in accordance with the shortage of implementation on the
labor law in Indonesia. Perhaps what needs to be considered is related to direct and strict
supervision from the company before they allow the worker get into the workplace. It can start
from the personal data collection, where they can recheck and rematch the data of each
employee in a company to prevent the existence of underage children employed by their
company.
The respondents declare the feasibility of labor law in Indonesia is adequate to support the
right of the children to be treated as a worker. Both of them acknowledge Indonesia Law No.
13 year 2003 regarding employment as adequate to support the rights of worker in Indonesia,
especially child labor. Thus, the main problem is not on the law but on the implementation of
the law itself. There are some factors that done on purpose or unintentionally by the job seeker
or the job provider and caused misconduct on the implementation of the law itself.

LIMITATION & SUGGESTION

The limitations of this study are prominent in the scope of respondents due to time
constraints and the limited resources of the area. It is recommended to broaden the area of
research to receive various perspectives on the child labor issue and categorize the issues with
each regional area. The researchers further suggest to identify specific issues on child labor in
the perspective of the laborers or employers, as this study focuses more into the availability of
the law to regulate the child labor. As for the research it is suggested to continue with the in-
depth interview method as it is proven to give a broad scope for the information on the topic
with optional questions during interview. Although there are some other weaknesses and
shortcoming on the completion of this mini research paper, the researchers hope it might
contribute to determine the impact of child labor law to the workforce. Thus, the researchers
are expecting more constructive feedback and suggestion for future research.
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