Maersk Group in conflict with Indonesian law

Maersk Group-owned company, Damco, are in conflict with Indonesian authorities (Photo: Damco)
Maersk Group-owned company, Damco, are in conflict with Indonesian authorities. (Photo: Damco)

Maersk Group is forced to repay 2.7 million DKK to Indonesian workers as they have been underpaid in 4 years, Danwatch reports. Maersk denies any charges.

It’s the Maersk-owned company, PT Damco Warehousing Indonesia, that have been sentenced by an agency inside the Indonesian Ministry of Labour to pay 2.750.000 Danish Kroners to 107 fired Indonesian dockers. The ministry moreover sentenced that Damco are to rehire the dockers with health insurance contracts. This was settled on June 6 2016 according to Danwatch, Danish media that claims to hold the decision.

Damco has broken Indonesian law by hiring a subcontractor, PT Tunas Bary Sejahterea, in 2012 that was not lawfully registred by that time. The workers had no contract with the subcontractor and were paid under minimum wage.

Minimum wage in Indonesia is roughly 1500 DKK per month and the dockers were only paid half of that, according to the workers unions SBBMB.

“PT Damco Indonesia shall promote the 107 workers with direct recruitments and register them on the health care program as well as pay the deficit salaries from July 2012 to April 2016,” the decision says.

Damco disagrees with the agency’s assessment and therefore want subject to the demands. The case might end in court.

“Damco hires subcontractors to perform freight duties and Damco won’t accept the lawful responsibility to the PT TBS’s (the subcontractor ed.) employees in the warehouse,” Anita de Werd, Damco’s head of communication, tells Danwatch.

Anita de Werd moreover admits that Damco were aware of the unlawful doings but explains that according to law they were allowed to hire a non-lawful unit if a proper lawful unit didn’t exist at the time.

Danish union actors asses that Maersk has no right to deny the demands outlined by the Indonesian authorities.

“It’s likely that Maersk disagrees but they’ll have to accept the decision. They might try to amend it at court, but as it looks now they’ll have to respect it,” Karsen Kristensen, secretary of negotiation at United Federation of Danish Workers (3F), says.

Damco familiar with the problems for years

The unlawfulness in the Damco warehouse could have been halted years ago. In May 2014 the workers contacted authorities to tell that their working conditions were unclear, as it was uncertain wether they worked for the subcontractor or Damco.

Indonesian authorities inspected the warehouse in July 2014 and concluded that Damco was the rightful employer. Damco where then forced to report how they would implement changes. But Damco did at that time, as today, not agree with the authorities and their assessment. Damco stubbornly declared that Tuna, the subcontractor, should bear full responsibility for salaries and employment conditions.

Damco won't fully subject to the demands outlined by the Ministry of Labour. (Photo: Damco)
Damco won’t fully subject to the demands outlined by the Ministry of Labour. (Photo: Damco)

The organization Workers Rights Consortium who inspect fabrics that supplies clothing and shoes to brands like Nika and Adidas, claims that Damco were breaking the law by hiring a subcontractor to do the task in the first place.

“According to Indonesia law it is not allowed to outsource core tasks to other companies,” says Bent Gehrt from Workers Rights Consortium. Anita de Werd from Damco arguments that lasting of goods is not considered a core task and that the Ministry of Labour has accepted this view.

Demonstrations in front of Damco

It’s still unclear whether Maersk-owned Damco will meet the demands to pay the dockers and rehire them. Meanwhile demonstrations are taking place outside of Damco offices. The recent weeks workers have gathered in front of Damco in hope of getting their jobs back.

Damco has agreed to pay the 2.7 million DKK’s that they owe the workers according to Indonesia authorities, but the workers has denied to receive any kind of compensation as they have no prospect of getting their jobs back.

“What the workers want is the company to subject to the guidance outlined by the authorities: Our job is our right,” the workers union SBBMB states.

The union has now contacted Adidas, Nike and Ikea, the primary users of Damco’s warehouse. Adidas has asked Damco for an elucidation, according to SBBMB.

(Source: Danwatch –

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