TRADE : Indonesia’s Labor and Human Rights Practices Fray U.S. Ties

Relations between the United States and this country, traditionally one of Washington’s staunchest allies in Southeast Asia, are at a frosty low ebb over human rights and labor practices.

A team of officials from the office of U.S. Trade Representative Mickey Kantor is winding up a five-day fact-finding tour in Jakarta today aimed at assessing whether Indonesia should lose trade benefits under the Generalized System of Preferences (GSP), which affects about $640 million worth of goods, about 14% of total Indonesian exports to America.

Indonesia was placed on a watch list in June following complaints from labor and human rights groups that Jakarta denies workers the right to organize by banning all but one state-approved union. It was also accused of using the military in labor disputes and permitting child and forced labor.

A decision is due in February on whether to continue Indonesia’s GSP benefits.

The government has split the one permitted union into 13 separate unions by industry. But they will still be under a state-controlled umbrella group. An independent trade union was also banned from holding a congress.

“It will affect trade to some extent,” Payaman Simanjuntak, director general of the Manpower Ministry, said of the threatened cutoff. “But for Indonesia, what is more important is the effect on our national dignity and pride.”

Far more controversial than the labor dispute, however, are moves by the United States to impose limits on arms sales to Indonesia because of the country’s record on human rights issues.

Last month, the Clinton Administration banned the sale of U.S.-built F-5 jet fighters from Jordan to Indonesia, citing human rights concerns. The Senate Foreign Relations Committee passed an amendment to the foreign aid bill this month linking further arms sales to an improvement in Indonesia’s human rights situation.

Most of the criticism of Indonesia’s human rights record stems from the country’s troubled relationship with the former Portuguese colony of East Timor, annexed by Jakarta in 1976.

While most governments had forgotten the annexation issue, Indonesia’s treatment of East Timor hit the headlines in 1991 when dozens of demonstrators were killed by army troops while taking part in a peaceful protest at a cemetery. The United States responded by suspending military training programs for Indonesian officers last year and blocking the sale of fighters last month.

Passage of the Senate amendment caused an uproar in Indonesia, with a number of top ministers threatening to end the country’s long reliance on U.S. weapons manufacturers in favor of European arms suppliers.

“We are a free and sovereign state, and the government of Indonesia will probe the possibility of buying aircraft from other nations in line with our needs,” said State Secretary Murdiono, who like many residents of the island of Java uses only one name. “The purchase of weapons will also not depend on a single country but can also be from other countries which understand our problems and still trust us.”

Indonesian officials say privately that they are striving to improve the country’s human rights picture, noting that high-ranking army officers were punished for the 1991 shootings. Earlier this month, the government announced that combat troops had been removed from the island of Timor, saying only troops with a development mission would remain.

Foreign Minister Ali Alatas announced that visits to the territory by human rights organizations will be facilitated after the International Committee of the Red Cross complained that it had not been allowed free access to prisoners.

Still, the downturn in relations threatens to send a chill over a range of bilateral ties at a time when President Clinton is courting President Suharto to attend the proposed summit meeting of the Asian Pacific Economic Cooperation forum in Seattle later this year.

Australian Prime Minister Paul Keating even suggested during a recent meeting with Clinton that Washington tone down its criticism of Jakarta or risk upsetting progress on a regionwide economic group.