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Cablegate: Child Labor Participation in North Sumatra,S Prawn

VZCZCXRO3738
PP RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHJA #1248/01 1781032
ZNR UUUUU ZZH
P 261032Z JUN 08
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC PRIORITY 9396
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUEHBY/AMEMBASSY CANBERRA 2690
RUEHWL/AMEMBASSY WELLINGTON 2783
RUEHKO/AMEMBASSY TOKYO 2149
RUEHUL/AMEMBASSY SEOUL 4694
RUEHBJ/AMEMBASSY BEIJING 5164
RUEHKA/AMEMBASSY DHAKA 1040
RUEHLM/AMEMBASSY COLOMBO 1079
RUEHPB/AMEMBASSY PORT MORESBY 3859
RUEHPT/AMCONSUL PERTH 0915
RUEHHK/AMCONSUL HONG KONG 2769
RHEHNSC/NSC WASHDC
RUEAIIA/CIA WASHDC

UNCLAS SECTION 01 OF 03 JAKARTA 001248

SIPDIS

DEPT FOR FOR DRL/ILCSR (MMITTELHAUSER), G/TIP FOR STEVE
STEINER, EAP/MTS, EAP/MLS
DOL FOR ILAB (RRIGBY, BSASSER)

E.O. 12958: N/A
TAGS: ELAB EIND ETRD PHUM PGOV ID
SUBJECT: CHILD LABOR PARTICIPATION IN NORTH SUMATRA,S PRAWN
INDUSTRY DRIVEN BY SCHOOL FEES

REF: A. JAKARTA 1097
B. JAKARTA 1057

JAKARTA 00001248 001.2 OF 003


1. This cable was coordinated with Embassy Jakarta.

2. (SBU) Summary: Child labor is a persistent feature of
North Sumatra's prawn industry. While the low level of
economic development is one component of the problem, the
sharp difference between junior high and senior high school
fees - and the inability of many families to pay the higher
rates - is a key factor determining when youth enter the
labor market and a driving force in child labor. Mission is
working with NGOs and the International Labor Organization
(ILO) to address this issue. End Summary.

Background
-----------

3. (U) Located on Medan's northern edge astride the Deli
River, the districts of Marelan and Amperan Perak were among
the first large-scale plantation districts in Sumatra.
Beginning in the latter half of the 19th century, investors
there cleared the jungle and established vast tobacco and
sugar cane and later rubber and oil palm estates. Built on
uninhabited land, these early plantations were powered by
imported labor from Java and, to a lesser extent, China and
India. Plantations like these fueled North Sumatra's early
growth, and the then-world renowned "Deli" tobacco made the
region a household name among cigar aficionados in the first
half of the 20th century. To this day, the region's
plantations are among the country's most profitable and
productive, and Deli tobacco wraps some of the world's
priciest cigars and is ground up for use in American snuff
and chew.

4. (U) Throughout much of the 20th century, new and expanding
plantations absorbed the region's growing population. By the
1980s, however, the land for new plantations was gone, new
job opportunities dried up, unemployment rose, and incomes
fell. More and more workers from this area sought jobs in
Medan's industrial parks while others, as their ancestors did
a century before, signed up with labor brokers hoping to
obtain work abroad. According to local inhabitants, after the
plantations, work in the industrial parks - particularly the
prawn processing plants -- is the most important source of
employment.

Labor Conditions
---------------------

5. (U) On June 19, Medan Principal Officer traveled to
Amperan Perak and Marelan to investigate reports of
exploitive child labor in the prawn processing industry. He
interviewed more than three dozen workers, including a dozen
child and former child workers, as well as the parents of
several current and former child workers. The visit was
coordinated by the influential child advocacy and anti
trafficking NGO Yayasan Pondok Rakyat Kreatif (YPRK). This
report is based on those interviews.

6. (U) Every morning at 6:00 am, at least 30 large busses
carry approximately 1000 workers from Amperan Perak to the
prawn factories in the Medan industrial estate. The estate
is home to 5 major prawn factories (two also processing crab
and cuttlefish); each employs 500 to 1000 workers. Output
from the factories is exported to Singapore, Hong Kong,
China, and Japan.

7. (U) The vast majority of workers in these factories are
female. They work seven days per week starting at 7:30 a.m.,
though actual work hours are determined by the volume of
product to be processed. Most days, workers finish up by
around 4:30 p.m., board the buses, and return to their
villages by 6 p.m. Several weeks per year, however, the
volume of prawns to process is so great that employees may be

JAKARTA 00001248 002.2 OF 003


required to work until approximately 10 p.m. There are also
occasional days when lack of supply means they are able to
complete their work around 2:30 p.m.

8. (SBU) The factories make the legally dubious claim that
these workers are contractors and that they are not required
to provide paid leave or benefits, including severance pay or
social security. The factories do, however, pay for
work-related injuries and home to work transportation, and
female workers who become pregnant are permitted to work as
long as they are comfortable doing so and may return several
months after giving birth. Pay is determined by the amount of
product processed. While the specifics vary from factory to
factory, in most cases employees are organized into groups of
6 or 8 and are paid their share of the group's total output.
Workers prefer this system because it prevents potentially
large fluctuations in their income when their output is
reduced because of weakness or illness. On an average month,
workers expect to receive IDR 700,000 - 900,000 (USD 75 -
100) for their labor, an amount close to the USD 90 monthly
minimum wage. All workers regardless of age and gender are
compensated using the same formula.

9. (U) Workers in the prawn factories complain that they are
forced to handle cold, semi-frozen shrimp for hours at a time
and that they must lift heavy crates. Several workers
reported that on any given day, 3-4 workers will faint from
exhaustion at each factory. They described this as an
improvement over several years ago when as many as a dozen
workers routinely passed out per day. Workers invariably told
Consulate Medan that they were happy with their jobs and
wages and that they enjoyed the social aspects of the job.
Spouses and parents of workers said that they were proud that
their family members had obtained respectable, high-paying
jobs.

Prevalence of Child Labor
----------------------------------

10. (U) Child labor has been present in the prawn factories
from the beginning. Several long-term employees estimated
that their factory might employ as many as two dozen workers
aged 16-17 at any one time. A number of employees said they
were aware of cases where "large" 15-year olds had been
employed, all agreed that this was exceptionally rare. A
couple of employees said they had heard that a 14-year old
was once hired, but that they did not know when or in which
factory. Many more workers aged 20-25 reported that they
began work when they were 16 or 17 years old.

11. (U) School fees appear to be a key factor determining
when a youth will enter the labor market and driving force in
child labor. Numerous current and former child workers said
that they dropped out of school not to look for work, but
because the cost of attending senior high school was sharply
higher than junior high. Had the costs remained constant
across grades or had their families been able to afford the
higher fees, they said, they would have remained in school.
Several parents of child workers confirmed this point.
Parents and workers also said they felt lucky that the youth
had obtained work in the factories. Not only was the salary
relatively high and the work constant, particularly compared
with work on the plantations, they said, but there was
greater prestige associated with the factory jobs.

12. (SBU) Oktaviana Perangin-Angin, the director of YPRK, has
worked for more than a decade on labor, child, and
trafficking issues. In other cases she has worked on, such as
the once notorious fishing platforms of northern Sumatra, she
said the working conditions were so exploitive that the
solution was easy: expose the exploiters and force them to
change their ways or close down. In this case, however, there
is no easy solution. Pressuring the companies to eliminate
the underage workers would not improve their condition, she
said, but could make it worse, particularly if it pushed them

JAKARTA 00001248 003.2 OF 003


into the hands of traffickers or if it merely delayed their
entry into the work force by a year or two. The best answer,
she believes, is to improve the plight of all the workers in
the factories by promoting safe and healthy working
conditions and that they receive the benefits to which they
are legally entitled.

13. Consulate Medan is also working with YPRK and local
officials to discuss ways to encourage communities and
families to keep children in school. Labatt will also raise
this issue with the ILO.
HUME

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