'Study on the Application of Women's Empowerment Principles in 50 Top Companies Indonesia.' (Photo courtesy of UN Women)

What Progress Have Indonesian Firms Made to Implement Women's Empowerment Principles?


SEPTEMBER 07, 2018

Jakarta. The McKinsey Global Institute said in a recent report that Indonesia can increase its gross domestic product by 9 percent, or $135 billion within the next seven years by achieving gender equality in the workplace. But have the country's top companies come up with initiatives to increase female participation in the labor force? And how much have they done to empower women to become leaders and protect them against sexual harassment?

All these questions are answered in a joint study by the United Nations Entity for Gender Equality and the Empowerment of Women (UN Women), the United Nations Global Compact and the Indonesia Business Coalition for Women Empowerment (IBCWE), which was conducted last month.

The study provides a baseline to see by what extent top Indonesian companies comply with the seven Women's Empowerment Principles (WEPs) established by UN Women and UN Global Compact in 2010 to empower women in the workplace, marketplace and community.

Over 1,900 business leaders from around the world, 11 of whom are from Indonesia, have signed a pledge to support the WEPs.

Fifty companies based in Indonesia participated in the study, conducted through in-depth interviews and purposive sampling methods. The companies remain anonymous except those that are members of the IBCWE, such as consumer goods group Unilever, consultancy Accenture, retailer Mitra Adi Perkasa (MAP), tire producer Gajah Tunggal and Bank Tabungan Pensiunan Nasional (BTPN).

Josephine Satyono, executive director of the Indonesia Global Compact Network, said the research team approached about 600 companies, but only 50 were willing to participate.

"We're still trying to see if their refusal to participate was because they were unwilling to share or they didn't have much knowledge on the WEPs," Josephine said during the study launch at Atma Jaya Catholic University in Setiabudi, South Jakarta, on Aug. 29.

The participating companies either had to be listed on the Indonesia Stock Exchange (IDX), or have more than 500 employees, been operating for a minimum of seven years, and have a presence in at least two cities in the country if they were not listed.

IBCWE executive director Maya Juwita said since this study also functions as a recommendation for the participants, big companies were deliberately chosen. Due to their size, it may take them longer to implement policies on gender equality, but they are more likely to commit to those policies. Meanwhile, small companies can find it easier to "change direction when it turns out the implemented policy doesn't suit them."

Most of the respondents, or 42 percent, were from the manufacturing sector, while the remainder were engaged in finance, property, services, agriculture, mining, trade, tourism, transportation and communications.

Nearly half of the respondents are multinational or regional enterprises, and the rest national corporations.

Maya told the Jakarta Globe that most of the companies that were willing to participate in the study are private enterprises.

Josephine meanwhile expressed hope that that they could partner with the Indonesian Chamber of Commerce and Industry (Kadin) and Indonesian Employers Association (Apindo) to get more companies to participate in future studies.

From left, Indonesia Global Compact Network executive director Josephine Satyono, Indonesia Business Coalition for Women Empowerment executive director Maya Juwita, and Sabine Machl, Indonesia representative for UN Women. (Photo courtesy of IGCN)

Good Results, More Improvement Needed

Sabine Machl, Indonesia representative for UN Women and liaison to the Association of Southeast Asian Nations (Asean), said there is good news coming out of the study, yet at the same time still "a lot of glass ceilings in many areas."

The first principle is "leadership promotes gender equality." Findings show that 84 percent of those companies have at least one woman on their boards of executives with 28 percent being the average proportion of women on the board. Ten percent of the companies have policies that empower women to be board members.

However, if we take a closer look, the departments where women are the top leaders are still traditionally female-friendly. Most female leaders are in finance (40 percent), human capital/resources (29 percent) and legal (27 percent).

"Women are placed in positions that traditionally have more women, such as HR, finance and legal, while positions where business decisions are made are still dominated by men," Maya said.

"Equal opportunity, inclusion and non-discrimination" is the second principle, and findings show that 68 percent of the participating companies have policies to retain women, especially after maternity leave, such as providing lactation rooms, daycare and flexible working hours.

"Some companies provide facilities that are more than the minimum requirements. For example, Unilever provides daycare. There are some companies that have gradual return programs after maternity leave. Accenture offers flexible working hours [after maternity leave] not only for women, but also men," Maya said.

However, in the case of maternity leave, Indonesian regulations are already a problem. The 2003 Manpower Law allows maternity leave of up to 90 days, but still falls short of the 126 days recommended by the International Labor Organization.

Still related to the second principle, 30 percent of the surveyed companies have implemented policies to empower women, yet only 6 percent have policies to review equal pay for equal work.

Although Law No. 80 of 1957 mandates employers to pay men and women the same for the same work, gender wage gaps remain a problem in Indonesia. A 2017 study by the Australia Partnership for Economic Governance shows that the gender wage gap in the formal and informal sector in Indonesia is 34 percent and 50 percent, respectively, due to discrimination rather than unproductivity.

A factsheet showing the results of the study on the application of women's empowerment principles in 50 top companies in Indonesia. (Photo courtesy of UN Women)

In terms of the third principle, "health, safety and freedom from violence," 94 percent have zero-tolerance policies on violence and harassment.

"I was surprised because a zero-tolerance policy on harassment is a government requirement, so it's supposed to be 100 percent," Maya said.

The number looks impressive, but only 53 percent have similar policies on gender-based violence and harassment, while only 54 percent have committees to deal with cases involving sexual violence.

Moving on to the next principle, "education and training," merely 28 percent have a designated program to empower women to take up leadership positions.

The fifth principle, "enterprise development, supply chain and marketing practices," evaluates companies on whether their products and services reflect gender-conscious decision making.

"Only one in four companies do a differential impact assessment when developing their products and services. Furthermore, out of the 50 companies, only 20 percent have products specialized for women," Maya said.

"Community leadership and engagement," being the sixth principle, focuses on corporate social responsibility programs. Thirty-eight percent have CSR programs targeting women and 30 percent have taken steps to ensure that the programs positively impact not only women, but also girls.

The last principle, "transparency, measuring and reporting," reflects a company's awareness of the need to be transparent about its progress towards reaching gender equality. Half of the companies publicize information on that at board level, but some of them admitted to doing that as a legal obligation and not voluntarily.

Thirty-eight percent have published company policies and plans to promote equality. However, only 22 percent have actually published the progress on those policies and plans.

The study concludes that most of the companies are familiar with the concept of WEPs, yet do not fully understand the principles.

"Based on the results, we have some good news on the implementation of WEPs, but we still have a lot of homework to do to ensure that more female talent can be on board level and participate in business decisions, because we believe gender equality is good business practice. In the end, this study is about raising awareness in Indonesia that equality means business," Maya said.

The study also comes with recommendations not only for corporations in general, but also the government, stating that "adopting more WEPs at the government level may result in a higher adoption of WEPs in the workplace by companies."

Also, it urges the government to make sure listed companies report the wages of male and female employees as a basis to enforce equal pay.