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OPINION: Pay-to-play, pay-to-stay: the high cost of Indonesian apparel jobs

by Tim Sandler | Transparentem
Tuesday, 29 September 2020 11:51 GMT

A worker is seen in a garment production house in this undated handout photo from Transparentem via Thomson Reuters Foundation

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* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.

Nobody should have to pay for work. The workers who are the lifeblood of the industry deserve nothing less

By Tim Sandler, Vice President of Investigations at Transparentem, a nonprofit organization that investigates environmental and human rights abuses in global supply chains.

When Susi,* a 25-year-old sewing operator in Indonesia, found work at a garment manufacturer in West Java, she paid one month’s wages upfront to a middleman to secure her job. She quit the strenuous job within one week, but received no refund. To secure her next position, Susi repeatedly paid around a month’s wages for successive three-month contracts until she left for another job—when she again paid a broker who approached her in front of the factory.

Susi is not alone. Over several months interviewing workers at apparel factories in Indonesia, investigators for Transparentem uncovered evidence of an alarming, widespread practice: workers paying middlemen substantial sums to secure jobs with suppliers of international brands. Often, these middlemen repeatedly demand extortionate fees, in a racket that harms vulnerable workers and their families.

Like Susi, apparel workers in Indonesia are often hired by manufacturers on temporary contracts. When contracts are renewed, or workers are laid off and seek employment elsewhere, they face the prospect of paying these middlemen again and again.

Our research identified numerous unofficial actors charging workers for their jobs, including security guards, unauthorized agents, and local gang members. Some brokers approach job seekers near factory gates to offer their assistance, for a fee. We found no evidence that these payments are formally orchestrated by manufacturers, although we were sometimes told about connections to factories’ human resources staff, who reportedly get a cut.

Payments to unsanctioned middlemen are not covered by many companies’ internal social responsibility policies or standards governing contractual relationships with suppliers, and do not appear to be addressed by the International Labour Organization’s (ILO’s) Better Work program in Indonesia. Fearing repercussions, workers rarely speak openly about the payments, limiting scrutiny into the practice. But many workers know that these unofficial payments, although exploitative, are their only hope of securing jobs.

Interviewees, including activists and labor union members, said many workers paid up to a few months’ wages for short-term contracts. Some workers told investigators they paid up to five or six months’ wages to secure longer, two-to-three-year contracts, including one worker who paid $1,000 for a job at a major supplier of international brands. He said it took him a year to partially repay the lender $475, a substantial burden in a country where per capita income was $4,050 in 2019.

Several workers said the price for these largely minimum-wage jobs had doubled in just a few years, exacerbating their financial stress. Fear that they might be fired, or that their contracts will not be renewed before they repay middleman debts, compounds that stress and increases workers’ exploitation. Workers said they refrained from calling in sick or rejecting overtime to meet high output targets. They expressed fear about appearing expendable to factory management; getting fired could throw them back into the expensive process of finding a new job.

The COVID-19 pandemic has made Indonesian apparel workers even more vulnerable. Thousands of workers in the industry, including Susi, have been laid off. With no steady income for the foreseeable future, they know they will again need to pay for their jobs once production orders increase. COVID-19-related layoffs will be a boon for black-market recruiters profiting from the desperation of unemployed workers.

The pandemic’s disruption to the Indonesian apparel industry presents an opportunity for brands, manufacturers, the Indonesian government, and the ILO to take action to address this disturbing practice.

As a first step, brands should communicate clearly to their suppliers that no worker should pay for a job—including through unofficial fees. Brands should ask workers directly about these issues during their social audits, using reputable third parties to interview workers away from their factories to determine the extent of the problem. Collaboration between brands and suppliers is essential to finding solutions to reimburse workers and avoid these pay-to-play and pay-to-stay schemes. Brands need to insist that suppliers never employ full-time workers on repeated short-term contracts. Finally, suppliers must be more diligent in their hiring practices and root out possible internal corruption in a concerted effort to cut out the middlemen.

The workers who are the lifeblood of the industry deserve nothing less. Nobody should have to pay for work.

* - Susi is a pseudonym used to protect the worker’s identity.