How Taiwanese Garment Factories Operate in Indonesia
Aminah (not her real name) felt a pang of pain in her abdominal. Her menstrual cramps that month were much more severe. She needed to take a break from working, but she didn’t know if her supervisor would allow her. Aminah works at a Taiwanese garment factory in Jakarta. If she stopped sewing, the factory line she was working at would also be affected, and the line workers may not meet their production target.
But Aminah was in a lot of pain, and couldn’t endure further. She decided to inform her supervisor that she had to take a day off to go back home to rest. Sweating profusely, she trudged to her supervisor. However, instead of showing concern, he berated her: you are not the only woman working here, and you are not the only woman to have a period! Why can other women go on working through their period cramps, but you cannot?
Clutching her abdomen, Aminah tried to explain. Her supervisor got even angrier and scolded her further. But Aminah was in too much pain. She fainted, and her colleagues had to carry her to the clinic.
At the clinic, the doctor asked Aminah why she did not take her menstrual leave, since she was in pain. That was when Aminah knew for the first time that she was entitled to menstrual leave.
Under Indonesia’s Labour Law, female workers are allowed to take two days of paid leave when they are menstruating. However, in practice, many workplaces show little empathy or understanding of the rights of female workers, and even discriminate against them for taking menstrual leave.
In Taiwan, the Wave Makers show on Netflix sparked its #MeToo Movement last year, which led to stronger anti-sexual harassment laws in Taiwan. In terms of gender equality, Taiwan ranks sixth globally and first in Asia among 179 countries. However, when it comes to the respect of gender rights in other countries where Taiwanese companies operate in, gender discrimination remains a bigger problem.
Low Wages and High Profits
In March this year, the Clean Clothes Campaign met with garment workers in Indonesia’s capital city, Jakarta. Garment factories on the Java island, where Jakarta is located, are mainly owned by Taiwanese and South Korean companies. The workers said they were grateful to have a job at the Taiwanese factory they were working at. However, Taiwanese factory owners can be quite the slave drivers, and push their workers hard to meet targets.
Taiwanese garment manufacturers are among the largest in the world—Taiwan’s Pou Chen states that it is the “largest branded athletic and casual footwear manufacturer in the world”, and produces for “major international brand name companies such as Nike, adidas, Asics, New Balance, Timberland and Salomon”. Taiwan’s textile and apparel industry is the country’s fourth largest foreign exchange earner segment, and Taiwan’s garment manufacturers have been expanding into Indonesia—which have become the fourth largest export market for Taiwan’s textile and apparel sector.
To achieve maximum profits at the lowest costs, Taiwanese factories have been shifting their production to countries with lower wages. Between 2015 and 2022, the share of Pou Chen’s production in China fell from a quarter to 10%, while in Indonesia it rose from about a third to almost of half of Pou Chen’s production. Officially, Pou Chen claims that it is closing factories in Vietnam due to declining orders, but on the other hand it is investing millions of dollars to expand its production in India, where wages are lower than China and Vietnam.
Compared with other garment manufacturing countries, Indonesia’s workers are very lowly-paid. In Western Java where most of the garment factories are located, workers earn the minimum wage of only about Rp2 million, or about NT$4,000 a month. Based on the estimates by The Industry We Want and the WageIndicator Foundation, the living wage needed for a basic standard of living in Indonesia is calculated to be between NT$4.6 million (NT$9,275) and NT$8.4 million (NT$16,910). This means that Indonesia’s workers would need at least double what they are currently earning to meet all their basic needs. But across Indonesia, the bulk of workers earn below minimum wage, which means the majority of workers live in dire poverty.
When we asked the workers how much bonuses they received, they laughed. Workers do not receive bonuses, they said, as these are only reserved for the bosses. Bonuses are a regular feature which Taiwanese workers look forward to every year, but it is not something readily available for many factory workers employed by Taiwan’s garment manufacturers in Indonesia. Workers at Pou Chen factories in Vietnam do receive bonuses however, but when some of them sought higher wages, Pou Chen introduced new methods to calculate their bonuses, which led to lower overall wages.
Taiwan’s garment companies are thus more than able to pay higher wages to their workers in Indonesia, but they do not. For example, Pou Chen earned NT$10.6 billion in net income in 2023, and a higher NT$12.6 billion and NT$14.4 billion the two years before. Ultimately, workers are only paid the minimum wage, and companies operating in Indonesia lobby the government to suppress it.
Other Forms of Harassment and Abuse
After Aminah joined a trade union at her factory, she learned more about her rights to take menstrual leave. Some supervisors still made it difficult for workers to take menstrual leave, but it has become easier to do so. When she first started taking menstrual leave, her colleagues were surprised and asked her how she managed to do it. She told them to not be afraid, because it is their legal right to do so.
But it is an ongoing struggle for workers at Taiwan’s factories to fight for greater worker and gender rights.
In one incident, after Putri (not her real name) took sick leave, her supervisor got angry and summoned her to the middle of the factory floor to scold her: why do you keep getting sick? There is no one to replace you when you are absent! When a union member intervened and told the supervisor that his reaction was inappropriate, he continued to blame the worker and said she shouldn’t be falling sick that often. The union member pointed out that the worker was already unwell and there was no need to scold her, but the supervisor said he wanted to scold her so that it would remind her not to fall sick that often.
Supervisors default to scolding workers when something does not go their way. When a new machine was introduced for sewing shoes, workers needed time to learn how to operate the machine, as it would have new settings and needles for stitching. However, if the workers did not get up to speed fast enough, they would be scolded by the factory line supervisor for not knowing how to operate the machines. Such intimidation and harassment of workers occur regularly, but this demoralizes the workers, Aminah said. It makes them feel they are not treated fairly, and have less motivation to work.
Moreover, Aminah added, the factory should develop a system to replace workers at production lines when they go on leave, instead of chastise workers for doing so. Taiwan’s workers may be familiar with this—in a 1111 Job Bank survey last year, 67% of Taiwan’s workers said their supervisors made things difficult when they tried applying for leave from work, even when 63.1% wanted to do so because they were feeling unwell and 51.3% wanted to see the doctor. 62.7% of supervisors tried blocking the leave of workers claiming a lack of manpower, 25.4% demanded workers to completely devote themselves to work and 21.5% said it would affect the of the department’s output.
Taiwan’s unhealthy work culture is being exported overseas by its overbearing bosses.
Working with Preferred Unions to Undermine Worker Rights
Among each factory in Indonesia, there can be several trade unions representing various groups of workers. When Alya (not her real name) wanted to change to another union, her supervisor transferred her to another factory line.
In the factory she was working at, the factory management has a closer relationship with the union Alya was initially registered under, and the management did not take kindly to it when she wanted to switch to another one. So the supervisor transferred her from one factory line to another, as a way to “punish” her. It occurred so frequently that her colleagues started asking what she did wrong—workers are sometimes transferred to other lines to create the image that they are not up to task in their roles, and have to therefore be transferred out. This led to Alya’s mental health suffering as she faced discrimination from other workers whenever she was “exiled” from one factory line.
Other workers were also subjected to such unjust and humiliating transfers if they made complaints or engaged in activities the factory management disapproved of—this acts as a ‘scare tactic’ to dissuade other workers from doing the same.
Factory management may engage specifically with one union over another, so that it is able to work with a particular union to control the workers. The factory may provide favorable treatment to a specific union, such as allowing it to recruit workers into the union during work hours but prohibit others from doing so; and the factory management may provide only the recruitment forms of their preferred union for new workers during induction. The factory management may also speak first (or only) to their preferred union when discussing new factory guidelines, or release factory memos or updates undersigned only by their preferred unions. Even when policies that benefit workers are advocated for by other non-preferred unions, these unions may be disregarded in factory memos so that workers are not aware of the work done by other unions—such as a recent pay increase that was jointly fought for by all the unions at the factory.
The preferred union becomes emboldened by the management’s support, and may even undermine other unions in order to protect their status at the factory. Workers who do not join the union may be threatened with the non-completion of their trainings which would affect whether they could be permanently hired. Workers who want to leave the preferred union may also receive threats, such as of not receiving the additional allowances on top of their regular wage or with being fired. Such threats hold little water as unions are not involved in hiring decisions or the payment of allowances, so these threats act as another layer of ‘scare tactics’ that management tolerates to keep workers compliant. In the end, workers may sign up with a union not of their preference.
As such, Taiwanese factories may adopt such a divide and conquer strategy so that they do not need to be as responsive to workers’ demands as long as the preferred union is willing to do the bidding of the management.
Protecting Workers Can Be Beneficial for Factories
When we asked the workers how they hoped their factories could better support them, they said they should be paid fairer wages for the cost of living and be allowed to take time off without discrimination, and that there should be greater respect for gender rights and equal treatment between the unions. It was also not necessary to scold workers as it only leads to more resentment, they said, and lower productivity. Instead, if workers feel they are treated more fairly, it would engender greater commitment from them.
In another Japanese factory where Aminah’s union has a presence, she shared that the factory paid higher wages than Indonesia’s minimum wage, all unions were also treated equally which resulted in fewer conflicts, more cooperation and better relations with the factory management, as well as better work conditions. There is less discrimination, and workers are more satisfied.
As a democracy, Taiwan’s companies play a role in highlighting Taiwan’s democratic values to other countries, but when Taiwan’s companies fail to do so, it tarnishes Taiwan’s reputation overseas. When Taiwanese firms behave badly, it thwarts Taiwan’s attempts at gaining more allies and support. A more responsible approach to conducting business can both ensure workers become more satisfied and committed, as well as showcase Taiwan’s respect of human rights.
In April this year, the European Union passed a law which would require European companies to integrate due diligence across their supply chain, such as by improving their business plans or introducing policies which would reduce labor exploitation and respect the human rights of workers in the factories they produce in, and to increase corporate accountability. As a democracy aspiring for stronger integration with other established democracies, implementing a similar due diligence law would require Taiwanese firms enhance their corporate responsibility, while ensuring they play the good stewards in promoting Taiwan’s hard-won democratic values.
