Proposal for a Measurement Agency in the Draft Bill on Manpower

Employers have proposed strengthening the institutional framework for wage determination through the establishment of a national productivity institution in the deliberations on the Draft Bill on Manpower (“ Draft Bill ”). The Deputy Chair for Manpower Affairs of the Indonesian Chamber of Commerce and Industry (“ KADIN ”), Subchan Gatot, stated that the Draft Bill on Manpower should regulate an institution focused on measuring national productivity.

“I hope that Commission IX will support Indonesia having something like an Indonesia Productivity Center. Such institutions exist in almost all countries,” Subchan said.

Subchan cited Japan as an example, which has the Japan Productivity Center as a platform for multi-stakeholder collaboration. The institution comprises representatives from labor unions, employers, and academics, without direct involvement from the government.

According to Subchan, the establishment of a national productivity institution is directly linked to the wage-setting process across various sectors and regions.

So far, in the absence of measurable productivity parameters, wage determination has often become a point of contention between workers and employers.

He argued that the establishment of an Indonesia Productivity Center would help calculate productivity levels more accurately at the company, sectoral, regional, and national levels. With measurable productivity data, wage policy is expected to become more objective and transparent.