Labour relations in Indonesia
Lead NCPSwitzerland
Supporting NCP(s)None Selected
DescriptionSpecific instance notified by the International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers’ Association (IUF) regarding the activities of Nestlé, a Swiss multinational enterprise, operating in Indonesia.
Theme(s)Employment and industrial relations
Date10 Nov 2008
Host country(ies)Indonesia
SourceTrade Union
Industry sectorManufacturing

Read the final statement issued by the Swiss NCP - 24 June 2010

In November 2008 the Swiss NCP received a request for review from the International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers’ Association (IUF) alleging that Nestlé, a Swiss multinational enterprise, had breached the employment and industrial relations provisions of the Guidelines in Indonesia. More specifically the IUF claimed that Nestlé Panjang management had not respected the rights of the local trade union SBNIP and refused to engage in collective bargaining and, in particular, to negotiate wages.

The NCP undertook an initial assessment and concluded that the specific instance merited further consideration and offered assistance to parties.

Both parties accepted the NCP's offer and so the NCP requested additional information, held separate discussions with both parties, and met with representatives of Nestlé on 21 April 2009. The NCP was then informed that the parties had attempted to reach an agreement at the local level in Indonesia. However, because of a delay in progress, the NCP arranged a joint meeting with IUF and representatives of Nestlé on 28 August 2009 where it was agreed to concentrate further discussions on the main issue of collective bargaining and wage negotiations, and both parties reached a mutual understanding on how to resolve this outstanding issue.

The NCP stayed in contact with the parties in order to monitor the progress being made on the issue of collective bargaining and wage negotiations. The NCP was informed that in Indonesia the parties  had reached an agreement to include wages into the 2010-2011 collective bargaining agreement (CBA). Nevertheless, negotiations on the CBA were slow and the NCP, in its final statement issued upon the conclusion of the specific instance, recommended that the parties continue their regular dialogue and to motivate unions and management at the Panjang plant in Indonesia to start the negotiation process on the 2010-2011 CBA. Read the final statement concluding the specific instance.