The State and Plantation Workers: Corporatism and Resistance

Kamis, 15 Juni 2006

The State and Plantation Workers: Corporatism and Resistance

Oleh: Luthfi Makhasin(Dosen UNSOED, anggota Forum Lafadl, sedang kuliah di ANU Australia)

This essay attempts to explain modes of labor control and resistance of plantation workers after the New Order focusing exclusively on those employed in state-owned plantations/estates.1 Following the overthrown of the New Order, modes of labor control are becoming more decentralized with companies as the main executor. The modes of labor control are applied by imposing politics of discourse, fear, and threats of violence. In responding to this hostile circumstance and in order to survive, the plantation workers continuously develop “conventional” and “unconventional” resistance to the state and capital.2 However, this resistance meets ideological constraints as well as structural problems.
The emergence of the “world’s third-largest democracy” (Tornquist, 2004: 377), in fact, has not been followed by the establishment of a political regime which accommodates all social classes. Indeed, the overthrown of Suharto’s regime simply replaced persons rather than established a genuine democratic system with the working class as the main constituent. While “politico-bureaucrats”, big bourgeois, and middle-class tightened their grip on political power, the lower classes (peasants and laborers) were simply neglected in the political establishment. Consequently, the lower classes (peasants and laborers) still continue their struggle to voice their grievances and discontent, and to protest.
This essay tries to address the following question, Why does the plantation workers’ struggle still persist following the overthrown of the New Order? I argue that the persistence of the plantation workers’ struggle after the New Order reflects that of oppression and exploitation of the working class under a newly established democratic system in Indonesia. In the process, the plantation workers meet both physically and psychologically oppressive measures, which are systematically prosecuted upon them in order to maintain the vested interests of the state and capital.
To address the question, this essay will divide into six parts. Firstly, I will deal with previous scholarly works on contemporary Indonesia’s labor movement and find out why they are inadequate in understanding the labor movement in general and particularly the plight of plantation workers after the New Order. Secondly, I will explain the historical background of the plantation workers and state-owned estates in Indonesia. Thirdly, I will examine the social stratification of the plantation and its effect in shaping power relations between laborers and the state-capital. Next, I will deal with state corporatism and labor control of the New Order in labor matters. After that, I will explain the Asian economic crisis and its impact on the plantation workers and the state-owned estates. Then, I will talk about the main concerns, structural problems and class-based conflicts the plantation workers have in relations with their employers in particular and generally the state and capital. Next, I will demonstrate ideological constraints and structural problems the plantation workers have to deal with. Finally, I will draw a conclusion based on the discussion.

State and Working Class in Indonesia
The political economy of labor and the labor movement is a marginal subject in modern Indonesian studies. Its popularity as a subject emerged suddenly and coincided with the necessity to understand the economic trajectory Indonesia was following in the 1980s and 1990s. Industrialisation, authoritarianism and their contradictory effects on power relations among different social classes as happened in Indonesia made scholars begin to re-think long established theoretical frameworks in dealing with state and society in Indonesia.3 The subject is becoming increasingly more important as a result of dramatic socio-political changes in the late 1990s.
Unfortunately, recent scholarly works addressing the Indonesian labor movement are still preoccupied with idealisation rather than giving a clear idea of the working class as a historical agent with its own very diverse character. These scholarly works vary enormously from those concerned with the changing relations between state and working class (Hadiz, 1994a: 190-203; 1994b: 64-73; 1997; Kammen, 1997; Ford, 1999: 372-92), the emergence of Indonesian labor unions (Ford, 2001: 101-14; La Botz, 2001) and the political economy of the labor market (Pincus, 1996; Manning, 1998), to those interested in the role of the working class in democracy and democratization (Aspinall, 1999: 2-31; Hadiz, 1998: 109-24; 2002: 249-66; Tornquist, 2004: 377-99)
However, all these works raise further questions rather than provide a comprehensive answer about the labor movement in Indonesia. The point is not whether export-oriented industrialization (EOI) creates political accommodation for laborers (Hadiz, 1997; Kammen, 1997), or if laborers are involved or not in democratization (Aspinall, 1999: 2-31; Tornquist, 2004: 377-99), or if labor unions exist or not (La Botz, 2001; Ford, 2001: 101-14), or if labor surplus has positive or negative effects on the labor movement (Pincus, 1996; Manning, 1998). More important is whether laborers are able to carry out creative adaptation or resistance against unbearable oppression and exploitation of them.
Moreover, all these works assume that only those working in manufacturing industries and living in urban areas can be historical agents of change. If it is the case with all these Marxist-inspired scholarly works, unfortunately it is only partly true in making sense of the current Indonesian political economy in general and the Indonesian labor movement in particular. The capitalist modes of production and labor control are not only a monopoly of those relying for their livelihood on modern economic sectors. These are living realities faced by all people, whether they are working in industry or agricultural employment or living in urban or rural areas. Focusing exclusively on manufacturing workers therefore does not represent the complexity of the working class and the class struggle in Indonesia.
Indeed, manufactures-based industrialisation has been grown significantly since the 1970s. This process was followed by the growing emergence of urban-based new proletariats who are increasingly assertive in voicing their interests. In the meantime, Indonesia maintained its traditional comparative advantages by emphasising natural resources-based industrialisation. Rapid expansion of natural resources-based industries such as mining, forestry, and plantations during the New Order brought much more complicated problems than in urban-based manufacturing industries. The main problem, of course, has to do with a large degree of oppression and exploitation carried out by the state and capital over laborers.
The dynamic relationship (more often conflictual in nature) between state-capital and laborers, as a matter of fact, is much more apparent in state-owned plantations than in any other economic sector. Through its involvement in the plantations, the New Order’s state performs its role as the owner of assets and capital. The state therefore cannot be regarded in a purely instrumentalist way as prescribed by classical Marxism. This is, ironically, absent in the mainstream scholarly works on the Indonesian labor movement written so far. More importantly, the rent-seeking behavior of the state and its client class in Indonesia is more profoundly apparent in natural resources-based industries than manufacture-based ones. As argued by Kammen, “market-exposed industries and state’s rent-seeking behavior can only be maintained at the expense of laborers” (1997: 31). Nevertheless, I disagree with Kammen on the ground that it is not only the manufacturing sector but also the plantation sector in which market-exposure is profound.
Scholarly works of plantations and plantation workers, however, mainly deal with the early development of plantations in Indonesia (Stoler, 1985a; 1985b: 642-58; 1988: 227-47; Pelzer, 1957: 151-59; 1978; Elson, 1986: 139-74; Knight, 1994: 51-76; Brown, 1994: 77-98). While Pelzer and Stoler are particularly interested in plantations and plantation workers in Sumatra’s plantation zones, Elson, Knight and Brown pay attention to sugar cane plantations in Java. Even though very useful as a point of departure for discussion, these works miss very recent development of plantations and how this takes effect over power relations among those involved in plantation production. These works also completely ignore the significance of re-emerging unions among plantation workers and its potential to change the mode of labor control in plantations after the New Order. Nevertheless, from previous works on plantation workers in Indonesia, we also get a detailed account of the mode of labor control and pattern of resistance (Stoler, 1985a), resources-based conflicts (Pelzer, 1957: 151-59; 1978), mode of exploitation in plantations (Knight, 1988) and formation of labor unions in plantations (Brown, 1994: 77-98). However, they fail to provide a big picture outside plantations that currently underpin the existence of the plantation system in Indonesia.
The persistence of plantation workers’ resistance after the New Order is not simply a locally isolated expression directed at an arbitrary state and capital. More importantly, it reflects the plantation workers’ struggle for survival in particular and the determination of the working class to establish a genuine democratic system in general. Moreover, this also has to do with how the plantation workers perceive their objective condition and make it a basis for collective action.
The relationship between class-based struggle and democracy, however, is far from simple. Indeed, many variables and factors must be taken into account in order to develop/generate a comprehensive explanation of this subject matter. Interestingly, of the many scholarly studies on this subject matter, little attention has been paid to the working class and its role in shaping democratic polity. Rueschmeyer’s Capitalist Development and Democracy, however, is an exception.
Rueschmeyer (1992) proposed a quite comprehensive account of the relationship between capitalist development and democracy. According to Rueschmeyer, democracy is a political result of changes in social class relationship, nature of state power, and international influence. In terms of the changes in social class relationship, he emphasized the importance of the working class in the way that democracy is, to a large extent, determined by the balanced and imbalanced relations between the working class and other social classes (1992:8). Once working class defeats a dominant class, popular democracy is likely to emerge. Rueschmeyer’s work affirmed that democracy cannot be understood simply as a result of internal dynamics. Rather, it involves external factors as well.

The Origins of State-owned Estates and Plantation Workers
The development of big plantations in developing countries has closely to do with the history of modern colonialism and capitalism (Kartodirdjo & Suryo, 1991: 3). Indeed, the big plantation system was initially developed as an institutional and economic arrangement to generate profit as much and as quickly as possible for both the colonial state and private capital by exploiting abundant land and cheap labor available in the colonies. In the case of Indonesia, the Dutch colonial rule introduced this system in 1830 following the acute financial problems caused by the Java War (1825-1830).4 However, it was not until 1870 when the colonial state eventually released its monopoly over (?) private capital. The 1870’s liberal economic policy opened up opportunities for private capital to intensify economic exploitation by establishing large-scale plantations in Java and the outer islands. In the 19th century, most private capital invested in the outer islands went to the East Coast of Sumatra, which then formed Sumatra’s so-called cultuurgebied (plantation belt).5 In the meantime, private investments in plantations in Java were concentrated in West, Central and East Java.6
From 1870 to 1942, the plantation system expanded significantly. According to Furnivall, from just 117,000 ha in 1900, Java’s plantation areas increased to 566,000 ha in 1930 (Kartodirdjo & Suryo, 1992: 114). In 1939, Burger estimated the total area of plantation in Sumatra stood at as high as 539,000 ha (Kartodirdjo & Suryo, 1991:114). This dramatic expansion of plantation was underpinned by a legal arrangement of colonial rule that guaranteed concession periods up to 75 years for private capital (Pelzer, 1957: 152).
The big plantation system had radically changed economic conditions in that, for the first time, Indonesia (previously Netherlands East Indies) was fully transformed to become involved in the modern international division of labor with a prior specified role, as raw materials producer. Through the plantation system, the colonial states were basically creating a world economic system in which Indonesia was assigned to perform its specified role of producing raw materials such as sugar, coffee, tea, palm oil, rubber, coconut, tobacco, and cloves for metropolitan states. For instance, prior to the Great Depression of 1929, sugar was the most important commodity producing around 30% of the colonial state’s total revenue or about 75% of Java’s total exports (Knight, 1978: 79).7
Meanwhile, the history of the plantation workers’ movement dated back to the early twentieth century during the mushrooming of the nationalist movement against the Dutch colonialism. It was initiated by the establishment of “Perkumpulan Buruh Onderneming”/PBO (Plantation Workers Union) in 1924 (Tedjasukmana, 1958: 8; Stoler, 1985a: 53). This union actively involved itself in the nationalist movement that was emerging in the 1920s. Protest and resistance, however, had already emerged among plantation workers since the beginning of the plantation system. These grew significantly during the 1920s coinciding with the mushrooming of the nationalist movement (Stoler, 1985a: 54). Interestingly, while Anthony Reid seemed to play down the role of the plantation workers in the nationalist cause (1979: 43), Kahin, on the other hand, pointed out that in the 1920s, the influence of communists among the plantation workers was apparent, especially in Sumatra’s plantation belt (1952: 85).
During the social revolution from 1945 to 1950, the plantations were the main battlefield of class, racial and ethnic-based conflicts with land as the main issue in the conflict (Pelzer, 1978). Squatting on plantation lands by plantation workers and local people living in surrounding areas was common at this time. In Sumatra’s plantation belt for instance, native Batak people and Javanese laborers took part in most of squatting actions (Pelzer, 1957:153).8 In the case of Sumatra’s plantation belt, squatting expressed not purely class-based conflict, but more importantly, expressing the resentment toward Malay elites, as a ruling class, who collaborated with the Dutch colonial rulers (Stoler, 1985a: 113). On the other hand, class-based conflict was much more profound in Java than in the outer islands. This was partly because demographic pressure was stronger because of an abundant labor force being available in Java.
In the 1950s and 1960s, the plantation workers’ movement reached an unprecedented extent of radicalization, militancy and organizational networking. The course of the labor movement was very much influenced by the persistence of foreign capital presence in the plantation sector, a struggle for power among political elites, the cold war climate, and the objective condition of continuing oppression and exploitation of the plantation workers.
Leftist ideas came to ascendancy in inspiring the labor movement in general and particularly in the plantation workers’ movement. SARBUPRI (Indonesia Plantation Workers Union), a communist-related union, was the largest and most organised and militant labor union Indonesia had ever had.9 At the beginning, SARBUPRI was very progressive in promoting a spirit of anti-capitalism and class-based struggles through publications, formal training, and informal discussions. SARBUPRI was also actively involved in orchestrating strikes, sabotage, and mass gatherings. More importantly, SARBUPRI best represented the plantation workers’ interests through its involvement in negotiation over wage and working conditions (Hasibuan, 1968).
However, SARBUPRI then shifted its stance by emphasizing nationalist causes. SARBUPRI played a leading role during the nationalisation campaign between 1958 and 1965.10 In 1958, Indonesia nationalized all Dutch-owned plantations throughout Indonesia following the refusal of the Dutch government to hand over West Papua.11 It was followed by nationalisation of British and American-owned plantations in 1964 and 1965 respectively. Ironically, control of transfer of ownership made fewer changes than SARBUPRI expected.
As the nationalisation process prevailed, the military appropriated all the nationalized-plantations under its control.12 The Army put its officers in charge of this very lucrative sector. In the first wave of nationalisation, the Indonesian government took over around 542 estates that were formerly owned entirely by Dutch private capital investors throughout Indonesia (Mackie, 1961: 338). To run these estates, the government established Perusahaan Perkebunan Negara/PPN (State Plantation Enterprises), which was grouped into several zones of production.13 PPN was headed by a director who was initially responsible to the Minister of Agriculture (Mackie, 1961: 341).
The Army’s control left historical precedents not only for further labor control but also the balance of power among the ruling class and its considerable effects on the working class. Mackie made clear this point by saying,

…[nationalisation] could have long term consequences for the ultimate disposition of political power in Indonesia just as decisive as creation of a new propertied class would have had (1961: 339).

In fact, it did not take a long time to confirm the truth of above statement. Control over nationalised-plantations provided an initial material basis that was very important in the struggle for power, especially for the army. This control also determined further patterns of class alliance in Indonesian politics in which the role of the military was and still is always to collaborate with landlords, foreign capital, and the petty bourgeois. Not surprisingly, SARBUPRI was the sole countervailing force that could challenge the dominance of the military. This fact partly explained why most of victims in the plantations during the 1965 massacre following the failed communist coup14, were SARBUPRI members.15 The exact number of casualties, however, has never been known and is likely to remain so.16 Interestingly, mass killing of communist members and their sympathizers commonly occurred in places where plantations were concentrated, such as East Coast Sumatra’s plantation belt, Central Java, and East Java.17
Despite the government’s commitment to developing manufacturing-based industry, plantations are still a very important sector in Indonesia. Plantation commodities contribute a quite high share of total national economic output. Compared to other commodities, oil palm records the most remarkable increase both in total production and cultivated area. In terms of total area, from just 79,000 ha in 1968 (Kartodirdjo & Suryo, 1991: 184), the state oil palm’s plantations dramatically increase by around 700% within three decades. This figure, however, is far less impressive than in the private sector which grew remarkably by 2500% over the same period..18 Oil Palm plantation forms up to 70% of the total area of large-scale plantations in Indonesia (3,2 million ha).19 North Sumatra and Riau are provinces where palm oil plantations are mostly located numbered 603.247 ha and 573.621 ha respectively.20
Recently, palm oil has become the most important plantation commodity in Indonesia. Indonesia supplies about 30% of total world production. Of this figure, the state estates contribute around 33% of total national production.21 This figure is likely to increase due to continuous expansion of oil palm plantations in Indonesia with 330.000 ha of forest land which is converted to palm oil plantation every year.22 The provincial governments have moved even further by offering land concession up to 30 years for plantation. For instance, Papua’s provincial government offers 3 million ha for oil palm plantation.23 In the near future, Indonesia will outweigh Malaysia as the world’s biggest producer of palm oil.
The rapid expansion of plantations during the New Order was facilitated by a huge amount of capital injected by international donors such as the World Bank and the Asian Development Bank. For instance, the World Bank allocated US$59 million for the plantation industry in North Sumatra within its first loan package for Indonesia after Suharto assumed power in 1967 (Stoler, 1985a: 165). To some extent, the involvement of international donors showed their preoccupation with maintaining Indonesia’s stance as one of the main raw material producers in the world.
Unlike in the colonial period, the New Order’s plantation system developed a new model designed to involve people in the plantation production system. Funding from international donors enabled the government to develop the so-called Nucleus Estates Smallholders scheme (NES).24 This scheme included almost all cash crops such as palm, rubber, tea, and sugar cane. Such a pro-poor policy was basically aimed at mobilizing a labor force on a large scale in order to support further development of plantations. Through the so-called “transmigrasi” (literally means transmigration) scheme, the government encouraged people to move from Java to outer islands such as Sumatra, Kalimantan, Sulawesi, and Papua. No wonder that these islands are also places where most plantations were built during the New Order.
State-owned plantations received considerable incentives from this policy. During the New Order, the state-owned estates doubled their control over cultivated land for plantation. The following table shows the total area controlled by the state-owned plantations in December 2002.

Owned by PTPN
Owned by Farmers
Palm Oil


Sugar Cane




Capital investment and supply of labor force are not the only factors in the expansion of plantation. More importantly, the authoritarian capitalist state enabled appropriation of land that had formerly been owned by poor peasants and “masyarakat adat” (customary community). In Java, the government arbitrarily took over lands from poor peasants, whereas in the outer islands, expropriation of forest which belonged to “tanah adat” (customary land) was common during the New Order. This measure, ironically, was carried out even though, formally, the New Order maintained an agrarian law (Bill No. 5/1960) with obvious land reform stipulations in its hand. The authoritarian capitalist state did so in the name of “national interest” (Lucas & Warren, 2003: 96). This is at the root of agrarian conflicts haunting the state-owned plantations after the New Order.

Social Stratification of Plantations
Since the colonial era, the big plantation system has brought both distinct modes of production and labor control. This was principally a “feudal-capitalistic” system based on high investment in cultivating a particular cash crop for the export market and with a distinct labor arrangement. Within its owned-land concession, a big plantation created not only an industrial complex but also a closed-social compound in which the class-based relationship was clearly manifested in daily life. Yet, the plantation system created an ambiguous working class on the grounds that plantation workers relied greatly on both “subsistence farming” and “wage labor”. Wolf remarked of it as “double lives” in which the plantation workers stand “with one foot in the plantation way of life, while keeping the other foot in the peasant holding” (1959: 143). Rather than a separate system, however, Stoler argued, “…[double lives] are part of a single economic system with multiple ideologies, reflecting the divergent interests of those implementing and contesting labor policy” (1985: 12).
Unlike in Java where private capital-owned plantations found it relatively easy to obtain free wage laborers, at the beginning Sumatra’s plantation belt relied on indentured labor coming from China and Java. The indentured labor force was facilitated by a “penal code” and a “coolie ordinance” which provided a legal basis for employers (private capital) to exploit and repress their employees (Stoler, 1985: 34). In other words, under this legal arrangement, Javanese and Chinese “kuli kontrak” (contract workers) were a legitimate object of oppression and exploitation carried out by their masters/employers. Stoler showed how labor practices in Sumatra’s plantations were mainly characterized by physical repression and sexual harassment (1985a: 25).
Eventually, by the early 20th century, indentured labor was completely abolished and replaced by a free wage labor system. There are two arguments regarding this change. On the one hand, some believe that this reflected the colonial state’s concern for the fate of the plantation workers (Kartodirdjo & Suryo, 1991: 93). However, some others argue that this had to do with the growing resistance and protests of the plantation workers against their employers (Stoler, 1985a).
Nationalisation and control transfer over former Dutch, British and American-owned plantations to indigenous capitalists did not change the major features of social stratification of the plantations. The plantation workers remained and still remain at the lowest rank in the hierarchy. The following diagram describes current social stratification in the state-owned plantations,

According to the diagram, the state-owned estates are a complex bureaucratic chain with a minister and boards of directors as makers of strategic decisions, such as mergers, privatization, investment, and so forth.25 Meanwhile, an administrator is the one taking charge of day-to-day activities in the plantation. The administrator is either a factory director (usually the case in sugarcane plantations) or a director of a plantation unit. He/she is directly responsible for the production process and labor control. His tasks comprise setting up wage rates, hiring or dismissing permanent/temporary workers, promotions, etc. He/she lives in a big house on higher ground separated from the ordinary plantation workers. He/she commonly lives for about 3 or 4 years in a plantation unit before then undergoing a “tour of duty” to another plantation unit in the same PTPN or in different one. He/she is commonly a professional with or without prior knowledge of a particular plantation unit. In many cases, he/she is an outsider without any emotional ties to the workers.
On the other hand, plantation workers are distinguished as those employed as permanent laborers and those who are temporary/casual ones. This distinction is based on the benefits one receives from the plantation. Beside wages, a permanent worker receives benefits such as housing facility, uniforms, work tools, health care, lunch, THR (special bonus for a religious celebration), and subsidized-basic needs,26 whereas temporary/casual workers obtain only a daily or weekly wage. While permanent workers are employed with a KKB (Kesepakatan Kerja Bersama/Working Contract), temporary workers are hired on a seasonal basis by the company through a labor contractor. The temporary workers come from surrounding areas where the plantation is located. They are commonly local peasants who need cash. They commonly work during replanting, harvesting, etc. Through the creation of temporary workers, the state-owned plantations generate considerable profits since labor costs constitute around 30% of total production cost. More importantly, temporary workers make the effort of imposing labor control much easier. This system weakens collective bargaining of the plantation workers because of a latent conflict among workers themselves.

Corporatism and New Order’s Labor Control
The labor policy of the New Order is to achieve two conflicting goals: undermining militant laborers on the one hand and, on the other, creating laborers who fully support capitalist economic development. To achieve these goals, the capitalist authoritarian state developed the so-called corporatist model of state-society relations in which the state allows a sole organization to represent people’s interest in state affairs (Schmitter, 1974). In the case of laborers, the New Order founded FBSI (Federation for Indonesian Labor Unions) in 1974. At the beginning, FBSI comprised sector-based individual unions (Serikat Buruh Lapangan Pekerjaan/SBLP). Afterwards, the government changed its structure to be more military-like to ensure a greater control over its members (Hadiz, 1994: 195). FSBI was a corporatist organization in which the state subordinated the union so that it would not have a chance to oppose any state initiatives in labor affairs.
Yet, the government further institutionalized a dispute settlement body that already existed – P4P at the central level and P4D at the regional one. P4P and P4D were established in the 1950s as a tripartite mechanism involving bureaucratic apparatus, capital and laborers. Rather than favoring laborers’ interests, however, this mechanism became an effective institutional arrangement to undermine laborers due to the unequal position of laborers in negotiations with state and capital. In almost all cases, the bureaucrats took sides with capital at the expense of laborers.
In the realm of ideology, however, the relationship between state-capital and laborers was manifested in a very sophisticated manner. Under the so-called “Hubungan Industrial Pancasila” (Pancasila Industrial Relations), the state prescribed that confrontation in the form of strikes was totally unacceptable. Instead, the state advocated harmonious relations between capital and laborers. Hadiz wrote that “the main concern was to dispel any lingering influence that notions of class conflict might have on industrial relations in Indonesia” (Hadiz, 1994: 194). Through this ideological framework, the state took a lead in denouncing both liberalism and communism as diametrically opposed to a genuine Indonesian culture.

Economic Crisis and the Re-emergence of Plantation Workers’ Unions
The Asian economic crisis hit Indonesia in 1997 changing fundamentally the institutional arrangements of the New Order’s labor control. During and in the aftermath of the crisis, the state and capital were no longer so powerful as to maintain corporatist arrangements in the labor field. It does not mean, however, that the state and capital lost their grip over the course of the labor movement that grew dramatically following the overthrown of the authoritarian regime.
There are two contending views of the economic crisis. Liberal economists regard it as a result of poor governance of respective countries characterized by rampant corruption and lack of transparency. On the other hand, many believe that the crisis was related to the nature of finance capital and global capital mobility (Winters, 1996). It is not my concern here, however, to provide a detailed account of the crisis. The point I want to make is that the crisis brought different consequences for different economic sectors and that these influenced the labor control and power relations between the authoritarian capitalist state and laborers.
Unlike the manufacturing sector that suffered badly during and in the aftermath of the crisis27, plantations survived and were even able to generate profit. This was partly as a result of a considerable devaluation of exchange rate, which in turn caused the price of plantation commodities on the international market to decrease significantly.28 This resulted in a considerable increase of revenue. Undoubtedly, this is what happened in the state-owned plantations. Unfortunately, given the reluctance of state-owned plantations to disclose information, it is very hard to measure exactly the amount of profit received by the state-owned plantations during and after the crisis. Media reports, however, seem to indirectly confirm this. For instance, the Minister for Manpower, Jacob Nuwawea, reportedly said that top management of the state-owned plantations received around 26 items of benefit beyond their official salary.29 Similarly, the House of Representative inquiry into bonuses received by PTPN IV’s board of directors and clerical staff discovered that their official salaries increased by 140 and 90 times respectively..30 These fantastic figures partly indicate the extent of profit the state-owned plantations generated during and in the aftermath of the crisis.
The overthrown of the authoritarian regime brought a democratic breakthrough in the sphere of labor institutional arrangements. As happened in other sectors, the plantation workers also formed the plantation workers’ unions. Of 86 national unions31, there are three unions that specifically gather their members from plantation workers: FSPBUN, FSPM-TG, and FSPPP. In terms of membership, FSPBUN is the largest one with members numbering around 1,6 million. Meanwhile, FSPM-TG claimed 14,000 in its membership. These numbers, unfortunately, do not represent a whole picture of laborers in the plantations since they exclude those with temporary status.32

Class-based Conflicts in the State-Owned Plantations
The overthrown of the New Order’s authoritarian regime on 21 May 1998 resulted in little change in the relationship between state-capital and labor. Indeed, institutional change in the form of the emergence of unions is apparent in the estates. However, this does not fundamentally alter the relationship, which remains exploitative and oppressive in nature. The persistence of strict labor control in the plantations under Indonesia’s democratic government is a paradox due to populist rhetoric of the new democratic regime. The wave of strikes taking place in the plantations following the overthrown of the authoritarian regime should, therefore, be understood as a reaction to this condition.
Indonesia’s ruling class succeeded in hijacking the newly established democratic government at the expense of the working class (Hadiz & Robison, 2002). Keeping laborers politically docile and economically cheap is still favored by the capitalist state, not only for economic recovery but also for the further economic sustainability of the ruling class. As argued by Deyo (1987), this formula had been successfully adopted by East Asian countries (South Korea, Singapore, and Hongkong) as a part of an industrialisation process they underwent in the 1980s. In the Indonesian case, however, this has been carried out to keep Indonesia’s credit worthiness with international creditors rather than to promote industrialisation.33
From 1998 to 2003, there were reportedly 236 strikes and periods of unrest in the plantations spread throughout 15 provinces.34 These strikes and unrest caused about US$300 million in physical damage35, and a few dozen casualties.36 The strikes and unrest in the plantations were commonly triggered by low wages. In fact, statistical data shows that plantation workers received the least wages on average compared to other sectors. On average, plantation workers receive as low as Rp 332,664 per month (around US$33).37 Due to the persistence of low worker wages in the plantations it is unlikely that strikes and unrest will stop in the near future. Of course, conflicts that broke out in the plantations are not only based on class divisions. In a few cases, these are also related to ethnic and racial hatred. In North Sumatra’s plantations for example, conflicts between Javanese and native Batak are apparent.
The establishment of the union certainly overcomes organisational problems faced by the plantation workers in dealing with the state and capital. Ironically, this also creates another problem. Rather than representing the plantation workers’ interests before the state and capital, unions are vulnerable to co-option. With the considerable economic resources the state-owned plantations have to hand, they are likely to be able to buy the allegiance of the unions.
Plantation workers unions split into the so-called “pelat kuning” (literally means yellow) and “pelat merah” (literally means red) unions. The “pelat kuning” union refers to the one that has strong allegiance to the state, whereas “pelat merah” are truly representative of the plantation workers. FSPBUN is identified as “pelat kuning” due to the dominant position of white-collar workers (clerical staff and foremen) in its top-rank. Meanwhile, FSPPP and FSPM-TG represent blue-collar workers with permanent status.
To some extent, fragmentation among the plantation workers as illustrated by the establishment of different unions, disguises and even blurs class-based conflicts in the plantations. Indeed, labor movement in the plantations is far from homogenous if not fragmented in nature. However, it does not necessarily mean that class-based conflicts are completely absent in the state-owned plantations. The state-capital as represented by the “tuan kebun”, clerical staff and foremen remain a target of resentment among the plantation workers.

Resistance and Counter-Resistance
Hidden and open resistance on the part of plantation workers in the form of strikes and unrest directed against the state-capital, however, are confined by ideological constraints and structural problems. Hadiz (1997) argued that the weakness of Indonesia’s labor movement has to do with the failure of the labor movement to overcome its own ideological constraint. Unfortunately, he did not explain to what extent this hampers the labor movement in Indonesia and what the ideological constraint precisely is.
In my opinion, this ideological constraint has to do with the peasant-like mentality of the plantation workers. Subsistence farming compensates for the low wage they receive from their employers, so that they tend to be reluctant to demand wage increases. As argued by Scott (1976), the peasants’ “ethic of subsistence” prevents the plantation workers from totally opposing the state-capital, though they they are subject to an objective condition of exploitation and repression. Yet, village-like compounds with all facilities attached to them for the permanent workers provide communal life, which is very important for social security. To some extent, this kind of life ameliorates the alienation that the plantation workers suffer in the estates. It does not mean, however, that the plantation workers passively accept their “bad luck”. Instead, they accept their condition since they are “rational peasants” calculating the “cost-benefit” of their action (Popkin, 1979).
Meanwhile, structural problems confine the enduring resistance of the plantation workers to the state estates. In fact, the state-capital is not the only “enemy” they have to deal with after the New Order. Squatters and local people threaten their livelihood through their claims over the plantation lands. In West Java for example, squatters and local people claimed 10,000 ha of lands previously owned by PTPN VIII.38 This also occurred in North Sumatra, where squatters and local people claimed and took over 61,000 ha of land that was previously owned by PTPN II. Facing this threat, the plantation workers chose to support their company, otherwise they would have lost their jobs.
A sharp increase in unemployment following the economic crisis also presents another structural problem to the plantation workers. Over-supply of labor undermines the bargaining position of laborers before the employers. Maintaining the job with a low wage is preferable to facing the risk of dismissal. For the state plantations, a labor surplus that continues to persist enables them to maintain low wages on the one hand and keep the plantation politically sterile of the labor movement on the other. Resistance by plantation workers therefore is characterized by its sporadic nature.
Strikes and unrest taking place in the state plantations of course cannot be understood simply as a locally isolated expression of resistance, grievance and protest. The overthrown of the authoritarian regime influences how they perceive their environment and react to change it. The democratic breakthrough brought about by reformasi (reform)39 creates a political euphoria amongst the masses to voice almost every grievance and discontent. Aspinall (1999) argued that Indonesia’s working class plays a pivotal role in pushing ahead of the democratic process through collective actions it displayed in the 1990s. In line with Aspinall’s view, I do believe that strikes and unrest in the state plantations reflect a determination on the part of the plantation workers to drive further towards establishing a true democratic system in Indonesia. For the plantation workers, however, often “democracy” has a much more immediate and practical meaning which is nothing more than whether they can survive and improve their material life.

The plantation workers’ struggle for survival has still a long way to go. The overthrown of the authoritarian regime certainly facilitates this growing emergence of the labor movement in the state plantations. Through the collective actions they carry out, the plantation workers obviously challenge the material basis of the Indonesia’s capitalist state. Nevertheless, consolidation and re-consolidation of power by the ruling classes hinders their struggle. Even under the newly established democratic regime, plantation workers are still an object of oppression and exploitation by both the state and capital.


Batak indigenous people living in North Sumatra

Culturgebeid plantation belt; refers to an area on the east coast of Sumatra where most big plantations are located

FBSI Indonesian National Trade Union designed by the New Order to be a sole representative of laborers’ interests. In 1984, its name changed to FSPSI.

FSPBUN Federation of Plantation Unions, drawing its membership mostly from plantations’ white-collar workers

FSPPP Federation of Agriculture and Plantation Workers, formed by some grass-root labor activists in 1999 to oppose FSPBUN

FSPM-TG Federation of Independent Sugar Cane Workers, founded by labor activists in Lampung’s Gunung Madu Plantation, PTPN IX, X, and XI. Affiliate to IUF (International Unions of Food)

KKB Kontrak Kerja Bersama/Mutual Working Contract, written agreement required for permanent workers in the plantation

Kuli kontrak Indentured laborers hired by the Dutch employers in East Sumatra’s plantations in the 19th century. They come from Sri Lanka (Tamil), India, China, and Java

Masyarakat adat customary society, refers to indigenous people having claim over plantation lands

New Order A political regime in Indonesia from 1966 to 21 May 1998 led by General Suharto

PBO Perkumpulan Buruh Onderneming/Plantation Union, the first plantation union in Indonesia founded in 1924

Pelat Kuning literally means “yellow plat”, refers to the unions which prefer to collaborate with the regime or employers. Yellow is the symbolic color associated with “Golkar”, the ruling party during the New Order era.

Pelat Merah literally means “red plat”, refers to the unions unwilling to cooperate with the state and capital. Red is a symbolic color associated with the communist party

PTPN State Plantation Company, consisting of 14 independent companies (PTPN I-XIV) under the Ministry of State Enterprises

P4P/P4D Panitia Penyelesaian Perselisihan Perburuhan Pusat/Daerah, a special dispute settlement mechanism at the central and regional/local level for labor affairs.

Reformasi literally means reform

SARBUPRI Serikat Buruh Perkebunan Republik Indonesia, a communist-affiliated plantation union, banned in 1966 following the failure of the communist coup

SBLP Serikat Buruh Lapangan Pekerjaan, sector-based unions under FBSI/FSPSI

Tanah Adat customary land

Tuan Kebun Plantation master, top manager in the plantation


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4 Responses to “The State and Plantation Workers: Corporatism and Resistance”

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