Labour laws 'led Sony to quit Indonesia'

The message to workers is loud and clear

The Indonesian government has blamed the country's labour laws for pushing Sony to shut down its audio equipment factory in the country, according to a report in Bisnis Indonesia.

According to the newspaper, Industry and Trade Minister Rini Suwandi believed the country's employment legislation allowed workers too much freedom hold demonstrations and voice protests.

"Industry people agree that we have to promote labour welfare but they also want clear labour legislation so that the employees do not put excessive demands on the company," she was quoted as saying.

Ms Suwandi believed the government's challenge now would be to change the laws to prevent other international firms from pulling out of the country.

Rising wages

Earlier this week, the Japanese electronics maker Sony announced plans to axe about 1,000 jobs and close PT Sony Electronics Indonesia by March next year.

Indonesia has raised its minimum wages by 30% per year in recent years and this has made it tougher for the company to compete with countries where labour is cheaper, such as China.

Many companies are currently mulling a pull-out from Indonesia in the wake of the fatal Bali bomb blast.

Sony opened its factory in Indonesia in march 1992.

The company will shift the production to other existing factories in Malaysia, Hungary, Mexico or Brazil.