ExxonMobil and People Smuggling

The Department of Labor and Transmigration has singled out ExxonMobil and in particular its subsidiary Mobil Cepu Ltd, for being responsible for human trafficking. Well, the Department says smuggling because Mobil Cepu allegedly has expatriates employed who have not fulfilled the necessary immigration and presumably labor requirements.

The Deputy Head of the Regional Departmental office is convinced that an investigation into illegal expatriate workers has turned up evidence that there are in fact expatriates working on Mobil Cepu's East Java gas fields.

The investigation was sparked by a denial by Mobil Cepu for a joint team to enter the mining site. The Deputy Head, Setiadjit, was also a little upset that the joint team was not allowed to raid the houses of the expatriates as well.

This has all the hallmarks of a "he said, she said" shakedown. Setiadjit is of the opinion that the parent companies are ultimately responsible for the actions of their subsidiaries and it is ExxonMobil that needs to ensure compliance and if compliance does not occur then it is ExxonMobil that must be responsible for any violations.

This has ended with the Labor and Transmigration Regional office jumping up and down and threatening to lodge a police report if the relevant paperwork is not handed over. The deadline is 13 October 2008.

It is certain to get a little more interesting yet as ExxonMobil has stepped into the fray, just like Setiadjit demanded. A spokesperson for ExxonMobil has stated unequivocally that they have complied with all prevailing laws and regulations and that the relevant labor authorities are already in possession of the required documents.

If this develops into a story I will post a postscript to this entry.

Religious Holiday Allowances (THR)

The Circular states that all employees who have worked continuously in the same company for a period of 3 months are entitled to the Religious Holiday Allowance (Tunjangan Hari Raya Agama / THR). For employees with less than 3 months continuous service there is no THR payable. Where an employee has been employed for a period in excess of 3 months but not yet 12 months, then the THR payable is pro rata based on their actual term of service. All employees engaged in continuous employment with the same employer for a period in excess of 12 months is entitled to an allowance of 1 month’s salary.

The THR must be paid no later than 7 days prior to the date of the religious holiday being celebrated. The need for this to be paid sooner rather than later is to ensure that workers have sufficient funds to satisfy their extra needs during the period. It is expected that employers will pay the THR on time.

Nevertheless, the Minister fully expects that some employers will not pay on time and the Circular instructs the various Governors, Regents, and Mayors to remind employers of the provisions and the requirements to pay on time. The Circular also allows for the establishment of special teams that are tasked with assisting those workers with complaints regarding the payment of their THR.

The Circular is current as of 3 September 2008.