Indonesian authorities have imposed a fine of 330 million rupiah on PT Shanghai Baoye Indonesia (PT SBI) for employing illegal foreign labor. This decision was made after a surprise inspection by the foreign labor monitoring team from the Ministry of Manpower and Transmigration in the Riau Islands province, where 29 foreign workers of Chinese nationality were found working in the company without the necessary documentation.
John Barros, Secretary of the Ministry of Manpower and Transmigration and head of the monitoring team, explained that the company was operating as a contractor in a power plant construction project on Stokok Island, located in the Batam area. Barros confirmed that the fine is being paid by the company, as it is transferred to the account of the Indonesian Ministry of Finance as non-tax revenue.
Details of the Inspection
The surprise inspection took place from March 26 to 27, 2026, during which the team discovered 29 foreign workers working at PT SBI without obtaining a foreign labor utilization permit, a mandatory document under Indonesian law. Barros indicated that some of these workers had recently arrived in Indonesia, while others had started working several months ago.
The company expressed its readiness to pay the imposed fine, and an official commitment was signed in this regard. Barros emphasized the importance of all companies adhering to the laws related to employing foreign labor, including paying the required fees to obtain the necessary permits.
Background & Context
Indonesia is considered one of the countries attracting foreign labor in various fields, especially in the construction and energy sectors. However, employing foreign workers without legal documentation is a violation of local laws, leading to fines and penalties for violating companies. The Indonesian government has enacted strict laws to regulate the use of foreign labor, including Law No. 34 of 2021, which outlines the conditions for employing foreign workers.
The Indonesian government aims to protect the local labor market and ensure the rights of workers, whether local or foreign. In recent years, the country has seen an increase in inspections of companies to ensure compliance with labor laws.
Impact & Consequences
This fine serves as a strong message to other companies regarding the importance of adhering to local laws. Non-compliance can lead to severe consequences, including financial penalties and deportation of violating workers. These measures reflect the Indonesian government's commitment to regulating the labor market and protecting workers' rights.
The government is also seeking to enhance cooperation between foreign and local labor, requiring foreign workers to transfer knowledge and skills to local workers. It has been emphasized that foreign workers must learn the Indonesian language as part of their commitment to working in the country.
Regional Significance
The issue of foreign labor is significant in many Arab countries, where some nations rely on foreign labor in various sectors. The Indonesian experience in regulating foreign labor could serve as a model in the region, as Arab countries also seek to organize the labor market and protect workers' rights.
In light of the economic challenges facing many Arab countries, organizing the labor market and strictly enforcing laws can contribute to improving the economic and social conditions for both local and foreign workers alike.