Industrial Relations Dynamics and Outsourced Labor: An Archival Case Study of Minimum Wage Policies and Local Labor Absorption at PT Semen Tonasa

Abstract

This study investigates the structural dynamics of industrial relations and outsourced labor within the state-owned enterprise (SOE) ecosystem in Indonesia, focusing on PT Semen Tonasa in Pangkajene and Islands Regency (Pangkep), South Sulawesi. Using an archival case study design, this research triangulates five years (2021-2025) of corporate sustainability disclosures (GRI Standards and OJK POJK 51/2017 reports from PT Semen Indonesia Group/SIG), regional regulatory decrees, and archival media investigations from 2019 to 2026. The findings reveal persistent institutional dissonance between corporate Environmental, Social, and Governance (ESG) narratives and on-the-ground industrial realities. Four tensions are identified: an entrenched labor dualism separating well-compensated permanent employees (182-188% of the Provincial Minimum Wage) from a precarious outsourced workforce of 1,000-1,500 personnel without transition pathways; recurring District Minimum Wage (UMK) compliance disputes marked by allowance cannibalization; a mismatch between corporate claims of over 85-90% local labor absorption and Ring-1 community grievances over employment quality; and a GRI 2-8 reporting boundary that confines "non-employee worker" disclosures to the parent entity, structurally excluding Tonasa's outsourced workforce from consolidated ESG headcounts even as parent-level figures declined from 3,575 (2021) to roughly 114-150 (2023-2024). Applying Dual Labor Market Theory and Labor Process Theory, this article shows how competitive market pressures drive risk-shifting and labor precaritization down the subcontracting hierarchy, while sustainability accounting conventions keep that precarity statistically invisible. The study proposes affirmative local labor governance models and statutory joint-liability frameworks to bridge corporate accountability and sustainable industrial relations.