Labor Relations in Korean Companies in Indonesia: Focusing on the Early Period

Kyoto Review of Southeast Asia. Issue 11 (March 2011). Southeast Asian Studies in Korea

1. Foreign Investment and Labor Issues

Since the late 1980s, Korean firms have begun to aggressively invest abroad following the process of democratization and the rise of labour activities in Korea. In the past, Korean investments abroad tended to be limited only to the industrial sector, natural resource development, construction and trade. But recently Korean investment has favoured labour-intensive industries, which, when viewed in terms of size, constitute no more than small sized companies with their headquarters located in countries that implement low wage policies and are suppressive in labour affairs. Around 1990, small and medium Korean shoe and garment companies began to move to Southeast Asia and Latin America. However, since the standard of wages began to rise in those places, the companies began to switch to countries that allow lower wages, like China and Vietnam, which have opened their doors to foreign investments.

Korean overseas investment poses several problems caused by the industrial sectors and measures they developed. There are also problems caused by local conditions in those countries where investments are made. The investment in labourintensive and small to medium size industries leads to the condition where local labourers are forced to work in a poor working environment for minimal wages. Furthermore, the investments where headquarters are located in an authoritarian and socialist country has disrupted the formation of peaceful and flexible labour relations.

In the other words, the relationship between labour, Korean businessmen, and the country of the investment recipient (if not counting the nationality of capital and labour) are basically very similar to the relationship between workers, investors, and government in the 1960s and the 1970s in Korea.

This paper intends to show the conditions of labour relations in the Korean companies which invest overseas, including the current changes. This paper has been prepared based on field research in Indonesia. Indonesia was chosen as this country has been placed as a priority destination for Korean investment in labour-intensive industries. Indonesia was also the most popular investment destination country of small and medium sized Korean firms before China took over this position in 1994.

Furthermore, research in Indonesia can be considered very important as the entry of Korean companies into Indonesia has given momentum to the birth of the Indonesian labour movement. The entry of Korean companies in Indonesia by chance occured at the flaring start of the labour movement in Indonesia. Actually, the labour sector under the Suharto regime from 1966 until the mid of 1980s can be said to be in a state of hibernation. But from the late 1980s, the labour sector in Indonesia began to reveal the existence of meaningful changes. At that time, Korean companies, which had only been operating for 2-3 years in Indonesia, were involved in a labour dispute, and this gave the development of the labor movement its momentum. Between 1992 until the first semester of 1994, the mass media in Indonesia were busy covering the incidents of labour conflict occurring in the Korean companies. After that, labour conflicts have often been identified in Korean companies in Indonesia.

Although labour conflicts experienced by Korean companies in Indonesia form an important issue to be studied, academic research and in depth media coverage has so far not been carried out.

This research is based on research interviews conducted by investigators Kim Eun Young and Jeon Je Sung of the Civil Society Association for Democratic Participation, together with Cha Mi Kyong from AMRC (Asia Monitor Resource Center). The study was conducted from July 9, 1995 until July 30, 1995 in Jakarta and Surabaya, where many Korean companies are based. Among the respondents were Indonesian workers, the Korean owners and managers of the companies, labour movement activists, and Koreans who settled in Indonesia.3 In order to obtain objective facts, the authors tried hard to identify dishonesty and avoid unilateral statements of the results of the interviews. For the interview preparation, a number of companies were first selected as the research subject by referring to print media reports and information from workers. After that, interviews were conducted among workers who are working and had worked at these selected companies. Interviews with workers were verified through comparing them with the interviews with Korean owners and managers to ensure the facts.

In the research process, it is known that the assessment of the facts occurring are very different among the labour workers and the Korean managements. The existence of these differences have provided an opportunity for the writer to think about various things. This paper basically is a result of the process of reflection and the writer`s analysis of the differences between the narratives of Indonesian labour workers and the narratives of the Korean managements. In the process of conducting field research, the authors found some very surprising facts, such as Korean-style Management being widely applied to local companies and the discourse of the criticism on how Korea manages the companies being widespread among workers and general public. Actually most Korean managers working in Indonesia – both at the investment firms and corporations in Indonesia, Taiwan, Hongkong and so on – are former engineers or labourers in Korea. In the their task as manager, they use a subversive and authoritarian management way that has been frequently found in Korean labour intensive companies. This way is considered as the Korean way by the Indonesian workers. The author of this paper intends to describe the problems that have arisen both from the Korean capital investments and from the Korean workers in Indonesia as the managers and the supervisers of these companies. In addition, this paper will illustrate the image of Korean-style management in the eyes of people of Indonesia, which forces the workers to work hard in slavery-like conditions and under subversive labour management. Finally, this paper will show the attitude of the Indonesian workers who developed the discourse of criticism as a weapon of the weak to challenge the Koreans and the Korean-style management.

2. Chronological Review on the Introduction of Korean Companies in Indonesia

The history of Korean foreign investment started in Indonesia. The record of the first Korean overseas investment is listed as the NamGang company at the time. This company is engaged in the timber industry. The investment was conducted in 1968 in

Indonesia. NamGang recieved a large fund from the former president, Park Chung Hee, to develop a crude oil field in Madura. After the summer of 1987, Korean companies that were losing their competitiveness in wage-efficient labour-intensive industries caused by the Korean workers` struggle, flocked to Indonesia. Below, the forms of Korean investments will be discussed chronologically as well as the influence of these forms on labour relations.

Korean investments in Indonesia changed as time passed. Beween the 1960s and the late 1970s, investments in Indonesia were based on the expansion of the natural resource industry sector. At this time, Korea desperately needed wood, crude oil, and coal for its domestic economic development. Koreans coming to Indonesia counted only a number of technicians and workers. They worked in Jakarta and in the islands outside Java. Companies like Kodeco and Korindo, which ought to be proud for being successful in the wood industry, initiated their investment during those times. Companies established at that time did not cause many problems with the workers and the local public since the number of the firms was very low. In fact, they were welcomed by local residents as they built roads, schools, mosques and churches in the remote places of their business locations. Meanwhile, Miwon, another Korean company, was also establishing a factory in Indonesia at that time and begun struggling to compete with Ajinomoto and Sasa, who had been operating in Indonesia for a long time. Today, Miwon as a rival business to Ajinomoto has achieved a solid position in the seasoning and processed food industries. Miwon together with Kodeco and Korindo are listed as the three major successful Korean companies in Indonesia.

The second investment phase, between the end of 1970 until the late 1980s, saw the construction industries and trade sector bringing the biggest investements done by Korean companies. Many top companies in construction works and trade which entered the Indonesian market achieved success. Meanwhile, companies which explored natural resources in the past were having a bad fate. Timber companies which achieved success in the old days began to face severe challenges from the late 1970s, when Indonesia began to apply a ban on the log export policy. In 1984, the Indonesian timber export ban policy caused many timber companies to close down or move to the industrial sector, except a small portion of timber companies that had successfully built sales networks in the domestic market or had diversified their business into the plywood sector. Kodeco, the company that received grants from the Korean government for oil exploration, has failed to establish commercial oil fields. The company received criticism from Korean society and was put as a company under government control.

In this second period, there were almost no conflicts between Korean firms and workers in Indonesia. This could be because the investment at that time were centered around industrial, trade and energy development, which usually does not include labour-intensive sectors, and these companies were supported by parent companies which are tycoons in Korea. At this time, it looked like the image of Koreans and the Korean state were quite positive in the eyes of the Indonesians. Hyundai built the first toll road in Indonesia, the Jagorawi toll road which connecting Jakarta and Bogor. The toll road development by Korean companies was memorable for the Indonesians. Another Korean construction company also got working tenders in various regions in Indonesia.

Miwon has been quite successful in competition with Ajinomoto, and thus the products of Korea began to be known by Indonesian consumers. Furthermore, the Korean electronic products also started to enter the Indonesian market in the 1980s and managed to reinforce the image of Korean products in Indonesia. However, during this period, the positive image of Korea that grew in Indonesian society was largely a result of mass media. Mass media reported on the progress of Korea’s thriving economy, and the Asian Games and Olympic Games which were held in Korea. The positive image of Korea at that time did not come from direct contact and experience with Korean elements.

The third investment phase occurred from the late 1980s until the year 1993, when they concentrated on direct investments in labour-intensive industrial sectors. In this phase, the investments were made by small to medium scale investors, who saw the favourable characteristics of the of Indonesian workers, which are meek and with low wage levels.
[quote]Table 1. Foreign investment in Indonesia between 1967 and May, 1995 (Standard approval, number of investment = 1 Million U.S. Dollars)[/quote]

Particularly at the beginning of this phase, around the year 1990, many Korean companies that invest in foreign countries moved to Indonesia. At that time approximately 350 Korean investment companies invested in Indonesia. Among these companies, most of them were labour-intensive manufacturing companies, such as shoes and garments, totaling more than 200 companies. In the terms of the scale of capital investment per project, Korea recorded the smallest average scale compared to other foreign companies (see Table 1). This shows that Korean investments in Indonesia were dominated by Small and Medium Enterprises (SMEs). As already mentioned above, this period is recorded as a time of conflict between Korean investors and Indonesian workers. This paper will also pay more attention to this period, which began in the late 1980s. However, as shown in Table 2, as the 1990s became characterized by the rising of Indonesian labour costs, Korean small-medium businesses were reluctant to enter Indonesia, while larger-scale investment began to arrive.4 Investments for small-medium enterprises during this period almost never took place in Indonesia, prefering China, Vietnam, and Southwest Asia because labour was cheaper there. However, the bad image of the Korean companies did not immediately disappear, but spread more widely into Indonesian society. What caused it? Korean capital investment has enlarged their scale and technology-laden form of capital, but why the bad image remains attached to Korean companies and Korean people?
[quote]Table 2. Korean Investment Fluctuation in Indonesia
(Standard approval, the total of investment in 1 million U.S. dollars)[/quote]

Other authors have considered that Korea’s overseas investment is basically going to have problems in the industrial sector and problems in the scale of investment capital. That is because the high percentage of wages in production costs and the difficulty in making long-term plans to return the invested capital, and smallmedium companies are easily exposed during labour conflicts. Many observers say that for the Korean companies, labour disputes are common incidents if we consider the stages of Korean economic development and overseas investment. Therefore, they predict that the problem will end eventually. However, these authors also consider that the problems arising along with Korean overseas investment are not merely caused by the nature and scale of the invested capital, but also from the implementation of Korean style culture and management in these companies, which come along with the invested capital. During field research this time, the authors directly saw that the major cause of labour conflict at Korean companies is the management style applied at Korean companies in Indonesia.

3. The management System at Korean companies 

During the field research, the authors consistently paid attention to what is really happening at Korean companies, as has been reported in the media. Whether they control their labour and commit actions that violate laws and local rules, such as delaying payment of salaries, do not implement the regional minimum wage policy (UMR), force to work overtime, commit violence and implement corporal punishment, etc. The authors pay attention to these matters since they read the news about the cases of salary payment delays caused by companies’ bad financial conditions. The violations of labour laws is often neglected by local authorities, and acts of violence were perpetrated by Korean managers. However, it turns out these are just prejudices, and in the early stages of the field research these prejudices collapsed immediately.

First, the case of labour conflicts that arise because of delay in the payment of wages are rarely found. The Indonesian government has intensified the monitoring on the implementation of regional minimum wage policy as the result of a workers rally in Medan in April, 1994. Among Korean companies visited by the researchers, there was no company that does not pay salaries beyond the standard minimum wage. Moreover, it turns out that in the same industry sector, investment by Korean companies typically pay higher wages than other foreign companies and Indonesian companies.

Physical violence is not found anymore in the Korean corporate environment. Although the ways of threats, insults and abusive language are still in use, no workers have ever been found who reported being beaten or physically abused. Korean Management has understood very well acts of violence or other similar actions. Further they also understand that touching the head is a form of action that can be categorized as an insult to Indonesians. So when new managers, technicians and workers newly arrive from Korea, the management will always give the sense or inform on those aspects. In addition, according to the author’s observation, it will be impossible for Korean Managements that is totaling two or at most 20-30 people to dare to commit violence against hundreds of thousands of Indonesian workers, even though they are considered to be always obedient to orders from their superiors. Violence in these conditions is not possible because of the large risk of backlash from the workers.

Korean companies that conduct physical tests as part of admission requirements for workers as reported by the media were not found, and there is also no Indonesian workers who testified of getting physical punishments such as pushups, running, and being made to stand for a long time in the hot sun. Maybe such corporal punishment is not being implemented anymore or if there is, it is simply made-up news. Nevertheless, there are still practical examinations of the workers in order to prevent theft. In addition, there are still practices that oblige the workers to stand for hours because of coming late for work.

However, the Korean company’s image in the eyes of Indonesian workers is still unpleasant and the worst among foreign companies. According to Indonesian workers, the Korean firms are the most vicious and ruthless in their corporate management. For them, a Korean company is the most hated workplace while Japanese companies are the most ideal workplace.What caused the Indonesian workers reluctance to work in Korean companies that turned out to pay the highest salaries in the same industry sector? The answer can be seen in one of the interviews conducted by the authors with Indonesian workers. The research team interviewed 20 people from six companies on the night of July 15, 1995 with the help of an NGO engaged in labour issues. Among the interviewees there are several workers from factories that produce artificial flowers. Actually, the factory owners are Chinese citizens, but the managers are Koreans. Therefore, the research team could get their testimony. They said that after the arrival of a Korean manager who moved from the Reebok shoe factories, a number of conflicts occurred in the factory. They complained on the management style and the actions of the manager. However, the manager’s name does not sound like it is Korean, so the author asked again if he was truly a Korean. They said that the bottomline is this main manager was known as Korean. Given the confusing answers, the author told them that according to the name, he was certain that he was not Korean. At that time, there is a worker who threw words that were highly surprising to the research team. The worker said that although the manager was not Korean, he worked in the Reebok factory and he implemented “the Korean ways.” In other words, the Korean style is considered as a source of conflict, even if Koreans do not own and do not manage the factory. How unfair is this statement? From these interviews, the author decided to focus on research aimed at finding the facts on this Korean style and then analyse it.

1) Does Korean style management exist?

Is it true that Korean style management exist?, and if it does, what does it look like? If we summarized the testimony of the Indonesian workers, the Korean style management is a less humane management, where administrators and managers intensify the work of labour to improve productivity. However, as the information gathered from the artifitial flower factory`s workers shows, Indonesian workers consider Korean management is applied in the factory that has no relationship with Korea. What is the basis for these workers’ views?

First, there is a premise that a Korean company, compared to other foreign companies, is more familiar with the ways of controlling the workforce to maximize productivity and profits. They are experienced in export-oriented industrialization based on labour-intensive industries under an authoritarian system. Whether they learned it from Japanese companies or from multi-national companies, this experience was developed in Korea and can also be said to be very well suited to the Korean style.

Second, below will clearly be decribed certain styles that were brought to Indonesia by the Koreans. Despite these styles having spread in the labour-intensive industrial sectors in Indonesia, it were the executives and managers of Korean companies who for the first time applied these styles in Indonesia. For example, what was happening in the Indonesian footwear industry was developed by Korean investors. In the early period after they entered Indonesia, almost all Korean shoe companies were involved in labour issues. Indonesian workers tend to interpret it that the labour conflict occurance is part of the nature of the Korean people, not from the logic of capital. This tendency is very fair and beneficial for the labour movement strategy.

Third, the Korean style management system has something to do with the Korean managers. Most Korean managers are former engineers and workers in Korea. Ironically, after they take up a management function in Indonesia, they repeat the management style in which they had been forced before by their managers in Korea. Through uncertainty about their position as middle managers, their obsession as foreigners, prejudice arises from their limited education, while typical Korean ethnocentrism and racist attitudes escalate towards Indonesian workers to repeat the management system implemented in their previous work in Korea.

Fourth, Symptoms of separation between the Korean capital and Korean management in labour-intensive industrial sectors. For example, in the shoe industry, garment, textile and toys in a small and medium factories, the plant manager, head of operations, andf head of division are usually Korean nationals. In this condition, the figure of the manager faced day-to-day by the workers are Korean, so the company will be considered a Korean company, even if the owner is not Korean. From this fact, the image of Korean style management is being formed.

In fact, for the Korean style management case, it is difficult to say that it only exist at companies owned and run by Koreans. Among those interviewed, especially the Koreans mentioned that the companies managed by Taiwanese, Hong Kong Chinese, and Chinese are more cruel and vicious in their labour affairs. However, this research is limited to Korean companies so we can not be sure on how far Korean style management extends to the local and foreign firms. The important fact is that there is a phenomenon where all allegations center around Korea, without thought about the origins and existence of Korean style management.

Regardless of whether the owners are Korean or only the managers are Korean, both have implications on who is held responsible for all the exploitations that have occurred being directed/blamed on Korean companies. Perhaps because of that, these Indonesian workers say that they are not stupid, but the Korean people are. This statement continued to reverberate in the authors’ ears.

Below will be presented habits that are widely implemented in various companies which are invested in and managed by Koreans. The data were drawn from interviews and media reports.

2) The Wage System

In recent years, there have been many changes in the wage system in Indonesia. The managers of Korean companies simply take advantage of this situation. The main elements that cause changes in the wage system of Korean companies are strict supervision and strict control by the state over the implementation of minimum wage policy by the companies. The Indonesian government considers the increase of labour conflict as an element that threatens political stability. The government implements soft and strict strategies in turn. Soft strategies used by the government to entertain the workers were the guarantee of Minimun Wage Policy implementation and to increase the minimun wage. Within a number of periods, each year the Indonesian government increases the minimum wage at a large scale (see Table 3), and after the year 1994 when the incident in Medan took place, the government created a blacklist of companies that do not apply the minimum wage. Companies listed in this list are monitored and controlled and punished in accordance to the rules.

 Korean investors and managers often consider that the labour policy of the government of Indonesia will be similar to the labour policy of the Park Chung Hee regime, but this assumption is too simplistic and can even endanger their own business. First, the Suharto`s government based their labour policies on Pancasila which will implement all decisions through musyawarah; peaceful consultations among labour-managers/owner-governmental institutions. This relationship is not like the supressive labour policy, which existed in Korea in the past. This relationship is more rhetorical in fact, as the Soeharto regime is more concerned with political stability than economic development.

Suharto’s regime did not want conflict to happen because if laborers were politically organized and labour problems spread to civil society in general, it would pose a threat to the government. Therefore, the Indonesian government prefers to implement a wage rise for the workers, although this policy will eventually decrease foreign investment and lower the rate of economic growth. This condition is created by Indonesia’s economic growth strategy which does not only rely on export-oriented industrialization.

[quote]Table 3. The changes of the Minimum Wage Standard in Jakarta and West Java (currency in Indonesian rupiah)[/quote]

Second, the Korean companies in Korea are domestic companies, but in Indonesia, they are foreign companies. Despite the current liberalization and rationalization of late, Indonesian economic policy is a nationalist policy. Labour conflict in the companies of foreign investors can be considered as a conflict between nations. This can be proved by anti-Japanese riots which occured in January 1974 and anti-China riots that occured in several incidents. For foreign companies, the comfortable condition provided by the Indonesian government is not an unconditional right.

Korean businessman can not simply accept the policy of the wage increase that is performed continuously. Korean firms address these policies in three ways. First, the standardization of wage rates, which eliminates or narrows down the difference in wages determined by the working period of the workers in the company in order to cover the financial burden resulting from the application of the increase in the minimum wage standard. There are companies that implement equal wage regardless of their working period/experience in the company. There are also companies that narrow down the difference in wages according to the laborers working period. Thus, the implementation of such strategies in Korean companies has created the seeds of conflict, and frequently also stimulate strikes against this policy.

Second, by including the money for meals and transportation into the salary to prevent a high increase of salary. Steps like this have become a serious problem of law interpretation. According to the minimun standard wage policy established after 1990, the scheme could be included in the minimum wage allowances amounting to 25% of the minimum wage. If there are companies that count the meal and transportation money as allowances and later include them as part of the minimun wage, although the total of such payment exceeds the nominal of the minimum wage, the policy can not immediately be categorized as a violation of minimum wage. Therefore, many companies include the money for food and transportation allowances as part of the fixed wages, they may increase the total wages and reduce the food and transport allowances or even eliminate them. This action invited a lot of disputes between workers and employers in the 1990s. The labour organizations certainly interpreted and claimed that the meal and transportation allowances must be separate from the calculation of these benefits and are paid as an addition.

Third is the adoption of a wholesale system and a working system that depends on how much of the results are produced. In an effort to increase productivity in the conditions of high wages, a Korean company creates and chooses a variety of ways. One is the implementations is that of the system of wholesale. Korean companies began to apply the principles of competition and the logic of a market system to the worker that requires the implementation of a wholesale system in which the workers are paid according to production regardless of the working hours.

Workers paid according to working hours only get an average of two hundred thousand rupiah per month, this includes the minimum wage and overtime, meanwhile workers who work with the wholesale system receive an average of three hundred thousand rupiah per month. In the wholesale system, the workers of course must work harder. Nevertheless, there is no case of organized resistance found against this exploitative contract system. In fact, the company that does not allow the wholesale system is followed by unfavorable workers, for example, workers who engage in the labour movement, and companies take advantage of this system as a way of punishing the workers.

There is another way of determining the level of productivity, which is by using a working plan and the achievement of results as a measure for workers in providing cash incentives or penalties. In that case, it can incur the possibility of labour exploitation without paying for the work incentives. For example, the productivity plan level is too heavy to be achieved so that even if productivity increases, the worker still does not receive any incentive money at all. Apparently there are also companies that implement this policy. However, this approach does not necessarily guarantee the productivity effects, and in addition, there is a possibility of opposition from the workers. It seems that lately the implementation of penalties has been removed. Thus, this method can support the working plan benchmarks and productivity can be increased more effectively.

Finally, The wage calculation is not clear. The Indonesian workers receive their salaries based on various counts such as the wholesale system, based on the work result system, overtime pay, meal allowance, transportation allowance, holliday allowance or THR, vacation period and others. The unclear character of calculating the salary is the main cause for problems. The complexity in how to calculate the salary is also added to by dishonesty of the businessmen who exploit the unaware workers and this might exacerbate the occurence of conflict. During this research, such a thing has never been recognized by the employers. In addition to the dishonesty of companies, the Korean managers do not take seriously the explaining and communicating on the calculation of salaries. This is also acting as the trigger to the problem. The company`s assurances on honesty and accuracy are less convincing to make the workers believe the foreigners. Sensitivity about money, the complexity of the salary elements, overtime payment applications being different to the wages, and mistrust with the Korean workers, demand a detailed explanation on how the salary is calculated. However, the rigid attitude and language limitations of the Korean managers and supervisors often invite misunderstanding. Linked with the changes in wage systems, the implementation of the wholesale system has important implications. For example, the author witnessed a case occurring in the CJ garment companies in the region KBN, where disputes between the workers and the company firms are often occuring. Frequent labour problems have forced the management to leave the suppesive labour system and try new ways, such as by changing the managers and the intermediate level employees with native workers, except the chief executive position that is also the manager of the factory and the two director positions.

This company is proudly implementing a wholesale system. The wholesale system pays the wages according to the results of the work and not based on the hours of work, so the more work they do the more workers earn. However, the wholesale work at this CJ company could be assessed as less humane. In the same working room, two groups are working together: most of the laborers hold a working contract and only a small portion of laborers hold a contract on the basis of working hours. Female workers who work on a wholesale contract stand sweating operating the knitter machines manually, which is actually work for a male worker in Korea (according to the narrative of the main director); next to them day to day workers are knitting sweaters by hand and finishing the knitting as slow as a sleepy person. The difference in wage between the wholesale workers and the day to day workers is about one hundred thousand Indonesian rupiah. From these company workers, the research team can not see the friendly attitudes and smiles that is usually a feature of the Indonesian people, and can be found at other companies.

In the habits of Indonesian people who love working together, mutual assistance and poverty to be divided among themselves, what does it mean to work in this wholesale contract? Rather than mutual cooperation, it will create competition; and they will work to earn 50% more than the next fellow. This contrasts feels much less humane. The workers’ faces are as Indonesian faces that lost their traditions and culture from the high flow of egalitarianism as a result of capitalism, represented by bulk production.

The Korean response to the change of the wage market and government policy, as illustrated above, is represented in the form of changes in the wage systems. This transformation prefers the complex and deceptive wage system and taking the risk by abusing or violating the governement minimum wage policy, paying low wages, no overtime payment, and delaying the payment of the salaries. However, it is not wise if the management thinks that the workers do not understand what is going on and what the actual wage system adopted by the management is. The workers have understood very well what the new wage system means, which is only for covering financial burdens caused by the increase in minimun wage standards in the midst of the desire to increase the level of intensity and productivity.

3) The Intensity of work and the working hours

The essence of Korean style management lies in the efforts to improve the productivity by increasing work intensity. In the labour-intensive manufacturing sectors which only require a simple skill and use less mechanical tools actually need quantity rather than quality of work. Therefore, a shortcut to improve the productivity is by maximizing the quantity of work in a short time. Almost all the Korean management models apply this method. The efforts to increase the work intensity is seen in various efforts such as by extending the working hours. For example, first, there is a practice referred to by Indonesian workers as “the corruption of time.” Workers were forced to increase the hours before and after the actual working hours, in addition to the seven hours of work. Laborers are told to come to work 15 minutes early and leave five minutes later than the actual working hours and the lunch break is being shortened. There are also companies that steal the overtime by not acknowledging overtime under 30 minutes and that means the company do not need to pay for the overtime.

Second, there are rules to prevent the loss of working hours. Among these, the most commonly found is that workers are not allowed to go to the toilet. To prevent the workers going to the toilet, a Korean company applies a card system to go to the toilet. With this card system, only workers who carry cards are allowed to use the toilet. The problem is that there are a very limited number of cards available. If all cards are in use, it means that if workers need to go to the restroom they have to wait for another colleague to be out of the toilet first. To limit the frequency of workers using the toilet, the number of toilets in the company is limited. K1 Company is a joint venture company of Korean leading tycoons that employs more than five hundred workers and does not implement the card system for the toilet use, but this company only provides six toilet cubicles. Among the six, three chambers are always locked on the pretext of being repaired, so three chambers can be used. Among these three chambers, two are for male and one is for female. As a result, female workers, which account for 90% of the total workers use the men’s room, while the male workers pee on the wall of the building.

An inhumane approach to prevent the workers to go to the toilet is by restricting the using hours of the toilet facilities. After the opening hours, the toilet`s doors are locked. In the K1 factory, toilets are only opened 30 minutes in the early morning, an hour during lunch time and 30 minutes in the afternoon. Other that those hours, the toilets are locked. Not only the time for going to toilet is being limited, the time for praying is even less. The easiest way is by not expanding the prayer room facilities. It seems that it is rare to find a Korean company which is equipped with satisfactory praying facilities.

There were cruel and even dangerous approaches imposed to minimize the loss of working hours, such as locking the door of the factory buildings while working hours are in progress. This policy is said to be very inhuman because it can trap workers in with the danger of fire, high temperatures, dust and toxic substances. Here, it is fair if the Indonesian workers show anger against the practice of this policy.

There are still many Korean factories forcing overtime, causing disputes. Forcing overtime was the main cause of conflict in Korean companies in the early period in Indonesia. Indonesian and Southeast Asian people believe in the great importance of rest and a relaxing life. Therefore, they will show hostility toward working overtime and the corruption of time. Before the 18th century, when the population began to grow, the culture of Southeast Asia was strongly influenced by the abundance of natural resources and limited manpower, this condition has formed a culture that emphasizes leisure time, time to play and conduct religious rituals. The relaxing life gives meaning to the work. In the early stages of the overseas investment, many Koreans were surprised to find an increased number of worker absences after the date of salary payment. Because the Korean people do not understand what it means to live at ease. It will be wrong if the Korean managers and supervisors are forcing working overtime and the corruption of time because they feel the Indonesians are unfamiliar with the concept of being on time, and the Koreans are more concerned with money rather than the leisure life.

In conclusion, the supressing style of management that relies on violence, physical punishment, and threat indeed has disappeared, but the general Korean management that needs to increase productivity by intensifying work remains valid. The changes are only in the implementation style and the outline of the management.

4) The Workers’ Welfare and The Working Environment

It should be recognized that Korean managers are not so concerned about the safety of the working environment, the welfare of the workers, and various facilities that can ensure such values. The reason is probably that they themselves have never recieved such facilities in Korea. They feel such facilities are a luxury compared to the level of Indonesian workers’ life. Lately, the issue of workers` welfare and the working environment has begun to replace the issue of wages as a source of disputes between workers and firms. For example, the demand of safety in the working environment, medical treatment facilities, insurance, dormitories, and meals. Demands for improving the working environment, workers` welfare and facilities mentioned above have become a not unusual reason to strike. Perhaps these new flows are the work of NGOs who have been concerned with labour issues and provide education to the workers about their rights. Recently, PT Sunkyong Keris, which is a collaboration company between Sunkyong, a Korean tycoon, and Batik Keris, a leading textile company in Indonesia, set up a modern factory, with advanced machinery, dormitory, air-conditioned buses to transport the workers, higher salaries, and more humane treatment, that make many workers want to work at this factory, however this working environment and facilities are the exception.

Actually there are quite a lot of manufacturers that set up facilities for the convenience of workers, but in reality the facilities were not fully utilized and can be said to be mere ornaments. Although there are canteens and food provided by the company, the canteens were dirty, and the quality and taste of food was far below standard, and even smelled awful. Besides they also did not provide drinking water. Therefore it is to be expected that the workers complain about the food problem. This is also one of the causes for workers’ protests. It has been described above that the toilet facilities are not satisfactory and restricted. The number of toilet cubicles is insufficient and some of them are even locked on purpose. There was one case in a garment factory, SA, owned by the Chinese, but it has Korean managers. There is a toilet with a leaking roof left unrepaired for months to the extent that the toilet floor is flooded but the roof is still not being repaired. Transportation issues are also becoming a serious problem. When workers want to return home after the overtime ended the factory does not provide a bus for the workers to go home and they even did not get any transportation allowances.

EIF shoe company has experienced a serious labour conflict. This company only operates 40 units of busses with a capacity each of 50 passengers, whereas the number of employees is 6500 people. SPJ furniture factory moved the plant from North Jakarta to Tangerang. This company did not provide dormitories in the new location. Many workers were forced to commute far away from their home to the working place. So they asked for a transportation allowance. However, the company did not accept their request, the company was even firing the workers that created the labour conflict. In addition, this plant is not equipped with dining facilities for lunch, the workers have to walk approximately 30 minutes to have their lunch.

In SA garment factories, about 300 people live in the labour dormitory, but in the dorms, only three bathrooms are available. The laborers are forced to queue every morning. They protested at the company. The company provided solutions by making a public bathroom that could be used to shower by eight people at the same time. For Indonesian people, unlike the Koreans, it is not common to show the naked body to others. Indonesian people are not used to the concept of a public bath, and for instance a changing room will always be based on one cubicle for one persons use. An Indonesian labour activists once said that he was not angry to know of all of this, but instead thought it a pity to see how the Koreans could ask 8 people to shower together in a cramped bathroom.

In Indonesia, there are many companies implementing ASTEK systems (Employment Insurance) to protect workers getting an accident at work, however there are also many companies that do not apply this insurance. The issue of no ASTEK is one of the reasons for labour strikes. Among companies that implement ASTEK, there are still some cases of discrimination. For example some workers were not included in the ASTEK by treating them as temporary workers, trainees that work only for three months or forever. The medical treatment facility provided by the company can not be freely used. The workers need to get a permit letter before getting the treatment. If at the end the workers need to acquire drugs for their illness, the procedure is so complicated that workers are reluctant to use the facilities.

Problems in the working environment, safety and accidents at work, are in fact more serious than the social issues formed by these issues. Issues of accidents at work are not so prominently on the surface because the attitude of the employer as well as the attitude of the worker. If there is an accident at work that resulted in a worker being injured or killed, it appears like Korean companies will not be stingy in treating the worker and providing compensation, as they fear creating a bigger problem. The workers also tend to think the problem is solved if they are given adequate medical treatment and compensation. Therefore, accidents at work recieve less public attention. However, if attention is paid to the issue of the use of old equipment in Korean small and medium-sized enterprises, we can imagine how serious the safety problem is. The medical treatment and compensation could for the time being be a form of consolation, but the victims remain victims. If the company does not provide decent care and compensation for an accident at work, and lets the same accident occur again and again, it will cause serious problems for Korean companies.

5) Labour Management and Illegal Lay offs

Among the various types of management, labour management and worker controls are most typical for Korean companies. Especially in the companies attitudes toward unions and the labour movement. The responses to the unions and labour movements are very similar to what they had once enforced in Korea, so it is difficult to reject the allegations against Korean style management. In Korean companies, the manager will not allow the formation of labour unions and if it has been formed earlier they want to change it so the union tends to put the interests of the company first. It is possible that the rejection of labour unions comes from their previous experience in Korea. Korean small and medium companies were driven to move abroad because of the existence of labour unions and the labour movement. They still remember very well that the reactivation of the labour movement prevented them from freely controlling labour and wages.

However, the activities of the unions and the labour movements is still below the worrying level for the Korean investors. The only labour union in Indonesia, the Indonesian Workers Union (Serikat Pekerja Seluruh Indonesia; SPSI), is strictly controlled by the government. Perhaps more precise is to consider it as a progovernment union. However, only 20% of the companies have branches of SPSI and the number of workers who become members of this union are also very minimal. Lately there are some liberal union organizations, but since there is pressure from the government from the onset, they have not been able to grow. In the 1990s, disputes between workers and companies rose sharply, but if we consider the rapid increase of Indonesian industrialization and its strategy, the number of disputes can not be said to be high (see table 4). The labour movement in Indonesia is not so aggressive. Destruction of companies’ facilities are rare. At most, workers strike and just hang out. Laborers actions are only limited to shouting their demands and slogans. After the company`s security personnels arrives, workers point out representatives and then go away. The elected labour representatives will join the consultations with the company and the officials from the Department of Labour. Physical dispute cases as took place in Korea are very rare.

[quote]Table 4. Statistics on labour strikes in Indonesia after 1980[/quote]

However, the bitter experiences in Korea has made the Korean company managers sensitive to labour issues and makes them act extreme. In other words, illegal and aggressive ways to mobilized against the organized were applied in Indonesia, but is more spontaneous and still considered polite action. The extreme ways of handling the strikes end up raising new problems and aggravating the conditions of strife.

The persons who are considered the leaders of the labour movement will be treated in an oppressive manner or pacified. If any of these ways are not effective, this person will be dismissed unfairly. In this study, the authors obtained a variety of information. Among them there are those who said that the formation of trade unions were prevented by threats, laborers are prohibited to join the unions, and the union executives are chosen from people who would easily accept a bribe. Mass media coverage on the strike occurring in Korean companies after the year 1993, mostly reported workers’ strikes that demanded the recognition of trade union establishment, or the re-activation of the union if there was a union established before. In these cases, the labour union established is a branch of the SPSI, which can be regarded as a formality. From this fact, we can see how strong the refusal of the Korean managers is towards labour unions, even if prohibiting the formation of labour unions is actually a violation of law.

The suppression of labour movements by the Korean manager is a similar response as used in Korea in the 1970s and 1980s. Workers who are considered to unmanageable or suspected to stimulate the labour movement and provoke strikes are transferred to the heavy duty works and the works that do not guarantee overtime payment. If a strike occurs, the company will ask the security personnel to go to the strike location to find the person who provoked the strike. If the security personnel still cannot find the person, the company will find a scape goat. Among workers who got fired from a Korean company, there are a number of workers who do not understand for what reason they were fired. A female worker who was harassed by a Korean manager had been fired from work because of her involvement in the labour movement. The management wanted to fire her, but they needed a valid reason. They sent another worker to start a fight with her. The female worker fought against the abuse. The company called both of them and fired them. This action is possible because the company regulations include an article which mentioned that workers who are fighting in the working place will be given a dismissal punishment. Furthermore, the authors have heard of an issue where the company mobilized thugs to threaten workers.

 PT. Garuda Indawa, a shoe manufaturer of Eagle brand, once committed a lamentable action. Immediately after receiving information about a visit by the Minister of Manpower, the company chose a few workers and gave them training to only give good answers to the Minister’s questions concerning the level of wages and bonuses which were not true. Each worker selected for this training was rewarded with 10 thousand rupiah. After realizing this company’s act, the workers began to conduct a strike. This case was reported by almost all printed mass media daily newspapers and one of them posted this news as a news headline. After the strike happened, the head director of the company was requested to come to the office of the Ministry of Manpower and was given a warning., the workers’ strike still continued for a further week.

A Korean staff member who is in charge of labour affairs at one of the Korean investment companies, which had been quite famous from its involvement in several labour disputes, bluntly started a story about how Koreans handle labour issues. When they started the development of the factory building, the manager of the factory will establish a collaboration with the security personnel as early as possible. The labour recruitment for the company do not accept workers who have experience working in other places in order to avoid intruders to enter as laborers in the company. After labour disputes occurred several times, a SPSI branch was enforced to be recognized. The company appointed an officer to lead the secretariat of the branch so the branch could still be controlled company. According to this Korean staff member, small and medium Korean companies played an important role in the collapse of the Korean image. Therefore, he argued that to eliminate the bad image of Korea, all the shoe factories need to draw back their operation to Korea.

Lately, many companies try to include more and more Indonesian style labour management by placing native Indonesians to manage the laborers. A director in chief of a garment company said that his company has been sending home their Korean employees except for two personnel. The consideration to hire Indonesians that it is cheaper and if there is any dispute between labour and management, it should be able to be resolved among the Indonesians and eliminate the worry for the problem to develop into conflicts between nations. Moreover, if labour management is entrusted to an Indonesian, the conflict will only be “limited” to resolution between Indonesian people and the possible resulting dissmissal would also be an Indonesian to another Indonesian. However, the final decision remains in the hands of the Korean staff so actually the assignment of Indonesian personnel in the labour management sector is merely a temporary strategy. Final accountability lies with the Koreans. Therefore, a serious strategy is still needed to give more of a Indonesian style to the company, which gives more involvement and responsibility to the Indonesian personnel in the decision making process.

6) The Korean Manager`s approach

The approaches of Korean style management mentioned previously can not automatically be said to be of Korean origin. Although the approaches are similar to the experience in Korea in the past and applied in Korean companies in Indonesia run by Koreans, in fact these approaches can also be found in the labour management of foreign companies owned by other authoritarian states, and these can also be found in the military policy of Japan. Moreover, these approaches can easily be widely found in Hong Kong and Taiwan investment companies, or in factories owned by Chinese and native Indonesians. Many even say that the approaches implemented by Hong Kong and Taiwanese companies, as well as Chinese-owned companies are far more cruel and less humane.

As reviewed before, violence, physical punishment and beatings occurred in the early stages of the history of Korean investment in Indonesia. Today such practices have disappeared from the Korean company’s environment. The record of violence in the past remains to contribute to the creation of a negative image of Korean people. Contempt, both in the form of attitude and words when seeing the weakness of the opposition, is an act of violence. This type of action still occurs. Some of the Indonesian workers who were interviewed by the authors mentioned that they hate the dirty words and verbal abuse committed by the Koreans. They said that when the Korean are angry and stressed, they like to curse in Korean, shouting, yelling and screaming. Many workers are familiar with vulgar Korean words, such as “saeki”, “imma”, and “shibalnom”. After making friends with Korean personnel, a female worker once asked him the meaning of those words she knew, and apparently those words were dirty and irritating.

The Koreans admit that among the people who came from various countries to Indonesia to do business, Koreans seem to stand out as very rude. However, please note that in the Indonesian culture, yelling, loud voices and being hasty are very disliked, especially in the Javanese culture. Being rough in the Korean language can be interpreted as being arrogant. However, in the Indonesian language, these words are more negatively distorted, showing lack of education and being low. Koreans are usually considered as rude people. In hot and humid temperatures, Indonesians like to be slow, while the Koreans in the working place like to run here and there, while yelling with bad words. With this kind of attitude, it is impossible for Koreans to give a good impression. No way the Koreans are very good. It is said that the Korean vocabulary being memorized the fastest by workers is “Pali-Pali”, which means quickly. Meanwhile, the Koreans also memorize the fastest the vocabulary that has the same meaning with the word “Pali-Pali.” For example, in Latin America “rapido rapido” and in Bahasa Indonesia, “cepat-cepat”. In the eyes of an Indonesian, hasty behavior, offensive language, and screaming while ordering people around are an attitude for a mentally insane person. Indonesia has a philosophy of Pancasila as the state direction and one of the principals in Pancasila is harmony, which is drawn from traditional values.

Korean people can not perform good dialogue and have difficulty in listening to others. This can cause problems in Indonesia. The thing that often created problems in the early period of the Korean investment history in Indonesia was the physical contact between people. The Koreans do not understand that physical contact is often considered as an insult for the Indonesians. In fact, Indonesian people taught themselves to be patient with this form of humiliation. In a job training center of Binawan Ltd., an employment agency that provides education to prospective workers wanting to work abroad, the instructor pulled the trainee’s ear and hair, slaps the face, or stands two men facing each other and slapping each other as a form of exercise to help the trainees to adapt to the prospective working place. According to a laborer, physical violence has disappeared and Indonesian workers have been able to receive mild physical contact as evidence of good intentions.

 

However, the humiliation is still continuing. The most difficult thing to accept is the behavior of the Koreans using the legs (not hands) to point out an item and assign work. Furthermore, even though the physical punishment has disappeared, there are still punishments such as being assigned to clean the floors or toilets and stand for hours in the corner. Indonesian people who have never undergone an authoritarian education or military life, and are still allied with the Malay culture which can not receive open humiliation, certainly can not accept this attitude and the punishment of the Korean people.

Although physical violence has disappeared as the Korean managers were begining to experience retaliation and reactions, the act of humiliation still continues to occur because the views of the Koreans have not changed. The Koreans hold a differing view on the Indonesian race, the culture of Indonesia and the Indonesian laborers. Other author in his paper once criticized the elitism, racism and nationalism, which is always in the head of Korean people as the main cause of disputes and worsens the conflict between the Korean investors and the workers. This research also observed the biased view of the Koreans being the root of the inhumane nature in Korean style management. Results of the survey analysis of an earlier study on the Korean community in Indonesia by the author together with this research show that the Indonesians are considered as lazy (90.9%), dirty (95.6%), and dishonest (70.6%) by the Koreans. Furthermore, the culture of Indonesia has a lower level than the Korean culture (80.9%) and no discipline (82.1%). Here we can see a hugely biased view of the Koreans about the people of Indonesia.

Sometimes these racist views also emerge in a very unusual form. According to an interviewed worker, there is a manager of a Korean garment company in Surabaya, that likes to do an odd thing. Every day without any exception, 15 minutes before four o`clock, he tosses 200 sheets of working time cards on the floor and enjoys the view of the 200 workers pushing each other as they search for their own cards. At the same company, there was another incident of a Korean manager cutting the strap of a worker`s sandals. The worker was having an injured leg, so he had his leg bandaged and wore new sandals for work at that time. When he saw a worker wearing new sandals, the manager cut the strap of his sandals. The reasoning of the Korean manager for his action was that he considered the worker was swollen with pride since he wore a new pair of sandals. After cutting the strap of the sandals, the managers were throwing money to the worker. From this attitude we see that the nature of the Koreans is just like a poor person that has just gotten rich recently (OKB; Orang Kaya Baru), and think that they can solve everything with money in Indonesia.

It seems that harassment and sexual violence also often occur. This research did not focus on this issue, however most workers interviewed mentioned that they are familiar with at least one case of marriage between a Korean manager and Indonesian female worker in their working environment. Among Korean managers, most are married men. In one study of workers at a foreign shoe factory (mostly owned by Koreans) in Tangerang and Bogor, there was an incident where an Indonesian male worker kissed an Korean female manager as an act of revenge against the sexual harassment by male Korean managers to female Indonesian workers. The bad image of the Koreans in Southeast Asia including in Indonesia, is largely caused by the perception and the drifted sexual behavior of the Korean men.

4. The image of Koreans as an Exploitative Broker: implications in the history of the political economy

Problems occurring in the Korean investment companies abroad are quite serious, but in Korea, these problem are not properly addressed. Thus, Korean society only knows of them as made-up matters or as insignificant. If there are any criticisms, it is only limited to the level of principles and morals. In this research, the authors concluded that labour problems experienced by Korean companies overseas are very complicated and are not the same as what is known in Korean society. The problems arising in the future are also estimated to be more severe than forecast in Korean society.

The need to define the Korean companies overseas should be considered as early as possible. Until now, the Korean company overseas is usually defined as a company whose capital is invested by the Koreans, as a solo investor or in collaboration with local investors. In other words, Korean firms overseas are identical to Korean investors. However, the Korean style management which is criticized by the Indonesians does not only focus on the companies which have Korean shareholders, but also the companies that have foreign investors such as the Indonesian Chinese, Taiwanese, and people from Hong Kong, but have Korean managers. Thus, to find the solution for labour problems overseas, we need to broaden the definition of Korean companies overseat to: not just those companies with Korean investors but also those companies that commissioned the Koreans as managers for operations and administrations.

In the labour-intensive industrial sector, the Koreans play very important roles as plant manager, production supervisor, manager of labour, and administrative personnel. According to Mr. Chung, the Chairman of the Korean Garment Industry Association, there are more than 40 factories that do not belong to the Koreans, but do have people from Korea as factory managers. The Koreans who work as managers and workers in garment factories in Indonesia count about 1,500 people, including 500 who work in factories owned by the Koreans. According to the statistics of the Indonesian Labour Ministry, in July 1995, Korean workers in Indonesia counted some 8000 people, being the largest number. Meanwhile, according to the Korean Foreign Department’s statistics, there were about 50 thousand Koreans living in Indonesia with the number of workers being 6,000 people.

Almost all of Korean shoe factories in Indonesia employ Koreans as managers, supervisors, and technical and production advisers. Among the so-called Korean companies, in most companies only the managers are Koreans, while there Kyoto Review of Southeast Asia Issue 11 (March 2011): Southeast Asian Studies in Korea 20 was also a company that was referred to as a Korean company, even though the manager was Chinese.

How did this happen? The wage increase in Korea has made Korea lose its competitiveness for labour-intensive industries at the international level. Workers in this sector were driven out. When the industry changes, the managers and administrative personnel may move to other types of industries, however for the production supervisors, technicians and low skilled workers, to move to other industries sectors is very difficult as it will need different skills and experiences. If companies want to move overseas the labour could also move along, but if the company had to close down the business and had to moved the different type of industry, those production supervisors and the technicians were forced to find their own place of work. Among the workers who move by themselves, many came to Indonesia. According to Mr. Chung, they come in person to offer themselves.

There are many factors which draw them to Indonesia. Labour-intensive industries such as the footwear industry is a new segment for Indonesian investors. Therefore, Indonesia does not have the knowledge base and experience in management, production, and technology. Indonesia takes advantage of the changing conditions in Korea by inviting the Korean engineers and production supervisors who have the experience but whose positions have been shifted. There are even companies that do not belong to the Koreans who want to bring the Korean supervisors and technicians who were already working in other companies by providing incentives such as a good salary and position.

What makes the Korean manager popular is simply and solely the Korean style management. The Korean style management method is very fascinating in the eyes of investors in the labour-intensive industrial sector. This method can guarantee productivity and rigorous work in the short term with the same wages. Usually the factory produces goods with the original equipment manufacturers (OEM) technique. The company that place the orders with this kind of factory often requests to have the Koreans employed as the factory managers and supervisors. For the buyer or the client, high productivity at low cost within a limited time is a very important element. For the buyers, the Korean style management is not a problem because they can place the orders with another factory for their goods if there are problems with labour in those factories.

The above conditions have caused the former production supervisors, technicians and workers in the area of Busan, Daegu and Masan to move to foreign companies in Indonesia. These people get better positions compared to their previous positions in Korea, such as plant manager, supervisor, and technical adviser. Their job in the new place, as discussed above, is to increase the productivity by improving the intensity, extending the working hours and completing the orders within a limited time. All these tasks involves the management of production and the organization of workers, and requires them to perform their duties in the field and to meet the workers face to face every day. They must be persuading, encouraging and forcing the workers to work to their maximum potential within their physical limitations as a human. The eyes of the Indonesian laborers do not see the foreign investors, instead they only see the Koreans who do their duties as supervisors and are always in front of the workers.

What advantages can be brought by those Korean production supervisors and technicians who work overseas to the Korean community? Of course, there is the effect of reducing Korean unemployment and balancing income from outside the commercial sector. But the foreign exchange earned from only thousands of people abroad does not compare to the damage of the Korean image, which is a public treasure of Korea. The Korean economy is relying on foreign countries, meaning the international community, for more than just employment. The international community, in terms of the economy has different meanings to Korean society: the markets of production goods, the sources of imports, the area of investment, source of labour, and the tourism sites. Therefore, the image of Koreans in the eyes of the international community is much more important than the workplace for thousands of people who generate a little foreign exchange. Moreover, they are just workers. They do not participate in important matters such as decision making, financial management and banking. They can be evicted at any time by reason of management accountability. They are no more than lackey.

Seeing this development, we should note the meaning of the role played by the Koreans as mid-level managers in the Indonesian community. It is noteworthy in terms of Indonesian political-economic history, in which the role of the middleman (broker) is performed by the Chinese people. In the eyes of the natives, the image of Chinese people as the middleman is for exploitation. This time, the Koreans are in a dangerous position. They seem to want to act as the evil brokers.

History of the role of the Chinese middleman can be traced back to the Dutch colonial era. Dutch colonialists passed the role of middleman (broker) between the imperialists and indigenous people to the Chinese people and expected them to exploit the indigenous community. Dutch colonialists categorized the Chinese as Foreign Orientals and handed over legal position as intermediate between Europeans and natives. Dutch colonialists made Chinese work as mediators with the native Dutch to connect them with the producers or consumers in these structures. Thus, as the middleman the Chinese sold European goods to the natives while collecting crops from indigenous people and selling them to the colonialists. Chinese`s profits were determined by how expensive they sold and how cheap they bought from indigenous natives. Furthermore, the colonialists worsened the image of the Chinese by favoring the Chinese to work in the immoral and exploitative fields. For example, the taxation task was entrusted to the Chinese, the monopoly on the manufacturing and trafficking of opium was given to the Chinese, and the pawnshop businesses and loansharks were allowed only among the Chinese. No wonder that in the eyes of natives, the Chinese were accomplices of the colonialist and the indigenous exploiters.

At the end of the colonial era, the Chinese people had improved economically, but did not further have a political patron. After Indonesian independence, the Dutch position as the Chinese political patron was replaced by the military. Suharto and the military regime that held the hegemony in 1965 effectively utilized the Chinese presence. The Suharto regime provided the political protection and economic advantages to the Chinese as well as gave them the task to build the Indonesian economy and provide political money. In addition, the Chinese people working together with cronies contributed significant treasures to the cronies in power. The Indonesians called the Chinese barons (Cukong).

The culture of the Chinese in Indonesia has many elements that do not allow them to mingle with the Indonesian community. Chinese culture has a worldly view of religion, worship of money and materialism, likes to eat pork and drink liquor, and to gamble. All these things are contrary to the teachings of Islam, the majority religion of the Indonesian population. Because of these elements, the Chinese in Indonesia are very slow in adapting to local culture compared to the Chinese in Thailand and the Philippines.

The role and the appearance of the Korean people in Indonesia are not so different from the role and the appearance of the Chinese people. The Korean companies in Indonesia, such as joked by local intellectuals, are fond of approaching the political rulers and looking for collusion relationships. Many Korean tycoons work with the President`s children and Chinese businessmen who have a relationship with the authorities. Korean managers which are hired by the foreign and Chinese companies in Indonesia, in the eyes of the natives, are only capitalist henchmen. The managers at companies mentioned previously just create the image of the middleman that exploits indigenous labour. Moreover, the number of Protestant churches and Catholic churches of the Korean community in Jakarta are eight. Perhaps this aspect also does not please the people of Indonesia that are 90% Muslim. The number of karaoke facilities is about 10 and the drinking culture exacerbates the bad image of the Koreans.

The image of Koreans as middleman is very dangerous. Given the experience of the Chinese and the Japanese in the past, the Koreans are not in a safe position. Chinese people are often under attack of revenge. After being empowered by the colonialist in Indonesia, every time there is an instability in the socio-political situation, Chinese people are always victims of murder and terror. During the last ten years, the differentiation and the violence against the Chinese decreased but the possibility still exists. Suharto`s regime in fact protected the Chinese, but also indicated its nature by taking advantage of anti-Chinese sentiments and making the Chinese into scapegoats to temporary eliminate the natives` complaints and frustrations. In January 1974, there were anti-Japanese riots that lasted for a few days in Jakarta and Bandung. The Indonesians did not like the collusion committed between the Japanese and the Chinese with the authorities. From this Malari case, the Japanese studied and showed a serious attitude to changing the image of Japan in various ways. From the stories like that above, it can not be said that there is no relation to what is happening with the Koreans.

5. The weapons of the weak: the struggle of Indonesian workers discourse

The creation of the bad image of Koreans as middlemen and Korean companies implementing less humane management in a place of business, which is the Korean style, shows a process of discourse formation of the weak who are successfull in protesting against the hegemony of the capitalist. Actually, Korean style management is not just limited to the Korean firms` environment. The oppressive control of labour that was once used on early stage investments in Indonesian history also has been loosened up. A lot of Korean companies are now regarded as the ideal workplace for Indonesian workers. The small-medium investment is also declining in the last two to three years. The role of the Korean as middleman is only found in the shoes, garments, and toys industrial sectors. However, the Korean companies are also widely known as a workplace that is most hated by Indonesian workers because of their cruelty and less human policies. This aspect can be interpreted as a victory discourse of the workers that is being used as a weapon of the weak. The weak struggle through a war of words, such as making up rumors and spreading them, vilifying, and lying. Almost all of the Koreans, especially the managers and the supervisors met the author, they mentioned stories of workers without merit and victimization. The Korean diplomats whose work related to the Korean investments such as the Korean communication attache, labour attache, and the trade attache also showed their disappointment towards the bad image of the Koreans and the bad coverage from the mass media. Another difficulty in this study also comes from the attitude of workers who tell untrue stories and rumors. The Indonesian government implements various policies to invite foreign investors. Over the last ten years, the Indonesian foreign exchange policy led to liberalization. Thus, a large number of foreign investments came to Indonesia. Officials of the Capital Investment Coordinating Board said that they are not worried about the labour problems experienced by the Korean companies. The voice of Muslims and nationalist intellectuals, who criticized the subordinate effects of capitalism and demanded economic independence, is now almost gone and does not appear again. In other words, it can be said that Indonesia at present is dominated by the hegemony of liberal capitalism and an open door policy. If so, why is it that in the Korean companies case the truth is not being recognized and the discourse of the hegemony and capitalism does not apply?

Koreans do not understand that the discourse of workers’ struggle is powerful. For an oppressive state and big capitalists, Indonesian labour is only a weak party and helpless. The Indonesian state has the McCarthyism views that considers the labour sector as potential communist enemies. Therefore, the government’s labour policy at the political level is oppressive. Various policy reforms over the past ten years lie within current neo-liberal globalization being identical with the activation of the capital sector and the weakening of the labour sector. The workers in Indonesia have been weakened and strangled by state conservatism, the unsupportive atmosphere from society, and being unorganized, although there have been labour-intensive industrializations. The weakening labour sector and the failure to organize laborers continues to occur supported by market factors. The number of laborers and the unemployment rate make the Indonesian labour market into a buyers market. In such a weak position, the open and organized struggles of the Indonesian workers were forced to be given up. If so, is it true that Indonesian workers have given up their fight? The answer is no. Indonesian workers are battling against the oppressive state, hegemonic capital, and the weakening of the labour sector, with their very powerful weapons. Their weapons are words. The war of words can defeat the enemy without causing casualties when they engage in an open and organized struggle.

How can the effects of this war of words that those who have been tasting the inhumane management of production and labour as the Korean style management wage can be invalidated, regardless the reality and their origins? The number of workers who work at about 350 Korean companies are at least one hundred thousand people. Their experience and understanding of the Korean companies will spread through their family, relatives, and friends network into Indonesian society. In the process of deployment, the sentiment of the nation and nationalism will add to the power of distribution. Thus, the anti Korea discourse will be more solid. Authors in this study, can see that the struggle of the Indonesian workers against the Korean companies in the form of discourse is extremely effective. Almost all Indonesian workers who met the author can not prove the heinous controlling labour practices such as low wage, violence and forced overtime. The author also received a labour activists` report, but the case was proved to be illusory and just a lie.

If the word of the made up story has been passed to several people, it will be boasted and blown out of porportion. A big gap is always found between the actual experience of the workers in the factories and the stories of people outside the factory. The existence of this distance proves that the struggle against Korean management is not conducted directly and openly in front of the Koreans, but is done indirectly and unorganized. This type of struggle is executed behind the scenes and is addressed to the anonym Korean. The effectiveness of the struggle can be seen from the following: Indonesian workers say that the Korean companies are the most unattractive company to work at; Indonesian society in general also considers the Korean company as a company that forces their laborers; within the mass media coverage about labour issues at Korean companies, there are many made-up reports or lies, and the image of the Koreans in Indonesian eyes is very bad.

From the end of 1993, Korean small and medium scale capital has had to start moving out of Indonesia. Many Korean companies have to close or reduce their production scale. New investment capital for the medium and small scale almost stopped. Meanwhile, the companies that still operate in Indonesia strive to improve productivity through refining its management, such as: change of the wage systems, increase of wages, improvement of workers` infrastructure and facilities, localization of labour management, and automated operation. From the second semester of 1994, labour disputes such as sabotage and strikes decreased drastically in Korean companies. Is it impossible to read this fact as a victory for the struggle for workers’ discourse? Although the victory was considered as a partial victory and not the big victory under hegemony capitalism, for the Koreans – the capitalist, the managers, the supervisors, and Korean society in general, you have to bear in mind that these things are very painful. The Japanese tried to erase the animalism of economic degree for decades. This situation is also the same for the Koreans. To remove the embarrassing image of the Koreans, the people of Korea will take no less time than the Japanese.