Ilo evaluation

Due to floods it was impossible to arrive in Chennai, so that this part of the programme had to be cancelled, which was very unfortunate. Instead, an enterprise visit was arranged in Faridabad.

ANNEX 7 SCORE Country report Indonesia

1. Introduction

1.1 Country Context and Contextual Developments

Following major economic and political upheavals triggered by the Asian financial crisis in 1998, Indonesia undertook a series of reforms aimed at creating a more democratic regime and economic recovery. A large decentralization programme was initiated in the country. With 530 local governments vertical coordination across government levels has become more intricate, while horizontal coordination could still be improved. There is a need to build more capable and accountable institutions and the overlap of governmental functions results in inefficiencies and at times poor delivery of public services.²⁵
Indonesia’s economic recovery was influenced by a number of factors, such as a growing middle class, a young population, rapid urbanization and a large internal market. However, there is a degree of vulnerability in the Indonesian economy, which is benefitting primarily from commodity exports in coal, timber and palm oil. Under influence of the global crisis economic growth has slowed down and is forecasted at 4.7% in 2015, which is the slowest pace since 2009.²⁶ Weaker growth has let to slower job creation, with recent employment increasing just enough to absorb the growth in working age population. The Indonesian economy needs to become more competitive. There is a lack of skilled labour and innovation, while efficiency and productivity need to be improved. Indonesia’s manufactures are increasingly confronted with foreign competitors, foremost China.
SMEs are very important in Indonesia, due to their economic contribution to the overall economy and their role as major source of employment in the country. They represent 56% of the Gross Domestic Product (GDP). What is more, the number of SMEs continues to grow, from 3.8 million business units in 2010 to more than 4.3 million business units in 2014. The majority of SMEs are privately owned, have a sole owner and largely serve local markets.²⁷
At a time of continuing crisis, the stabilization of the economy is particularly important. The central bank of Indonesia has noted that one of the measures needed to counteract the instability and general downturn of Indonesia’s economy is to raise efficiency and the productivity of SMEs. The potential contribution that SMEs can make, both socially and economically, is much greater than is being achieved at present. Poor workplace practices and a lack of communication between workers and management are a significant part of the problem. This is the main focus of the SCORE project. That is why all stakeholders agree that the SCORE project is important in that it can help enterprises to find a better road to productivity and growth that benefits both workers and employers.

1.2 Key partners in SCORE implementation

APINDO (employers’ organization)

BEDO (service provider)

ILO

Ministry of Manpower (MoM), Directorate of Productivity and Entrepreneurship

SECO

SOI (service provider)

Trade Unions (KSPI, KSPI Pasar Minggu, KSPSI Kalibata, KSBSI)

1.3 National Tripartite Advisory Committee

All NTAC members are positive about the SCORE. The project shows good results at the company level. Additional to results in quality management, better organized and cleaner factories, storage, energy use and efficiency, most notable and relevant in the light of the ILO mandate according to the NTAC members is that workers and managers cooperation has improved and that workers are more empowered in their companies. During the evaluation visit all NTAC members emphasized the contribution that the SCORE project has made to this improvement. It will raise productivity and the competitiveness of SMEs and by doing so the SCORE project in their opinion can make an important contribute to Indonesia’s social and economic development.

In general NTAC members are positive about the ILO SCORE team and the performance of the NTAC. They value the team as professional, open in its communication and with a clear focus on teamwork and the collaboration with those who are involved. NTAC members are also positive about the openness of discussions and the collaboration in the committee itself. They are all making an effort to find win-win situations and contribute to the objectives of the SCORE project from their own organizations.
However, an extra step is needed to improve relations with employer’s organization APINDO and increase its commitment to the project. There is a problem in the sense that APINDO’s members are mainly larger companies and not SMEs. APINDO would also like SCORE to focus more on the handicraft sector, but until now other members of the NTAC have rejected this proposal. APINDO could play an important role in expanding project activities to a much larger scale and achieving sustainability. It has high level contacts with other ministries, like the Ministry of Cooperatives and Small and Medium Enterprises. APINDO can maybe also play a role to attract funding from larger companies that are member of APINDO and that work with SMEs in their supply chain.

1.4 Activities, outputs and outcomes since start of SCORE Phase II

The realization of activities against planning is presented in the Workplan smartsheets of SCORE. The Smartsheet results of Indonesia were analyzed for implementation rates and are presented in the table below.

Output 1: Sub-sectors and clusters selected (where applicable)	100%
Output 2: Industry Association and training institutions trained in marketing, selling and organizing SCORE training	67%	33%
Output 3: National capacity available to replicate the training programme		50%		50%
Output 4: A locally adapted, gender-mainstreamed edition of the SCORE-training materials available	100%
Output 5: Robust M&E information and reports regularly available	80%	20%
Output 6: Service providers trained to deliver	40%	60%
Output 7: SMEs trained on SCORE Modules 1-5 on a demand-driven basis		100%
Output 8: Documentation and dissemination of good workplace practices is available		100%
Output 9:  Policy makers, labour inspectors and social partners have increased				100%
Output 10: Social marketing campaigns to stimulate demand for workplace improvements and change attitudes toward workplace cooperation (where applicable)		50%		50%

Legend: Green=completed; yellow=in progress; red=delayed; white=not yet started or not planned
Until June 2015 the realization of activities is on track. Most activities are in the implementation stage or finalized. There are no delays.
The realization of outputs is presented on smart-sheets. Until June 2015, the following outputs were realized:

	Target June 2015	Actual June 2015
Objective 1: Industry associations and training
Nr. of institutions embedding SCORE Training in their SMEs service portfolio	2	3
% of training cost covered by non-ILO resources	50 M1, 0 M2-5	50 M1, 0 M2-5
Nr. of national institutions or MNEs sponsoring/paying for SCORE	1	2
Output 1: sub-sectors and clusters with high decent job creation potential and strong
Nr. of clusters selected (geographic areas)	10	11
Output 2: Industry Association and training
Nr. of MoUs signed by IAs/training institutions	2	4
Nr. of reps of IAs/training institutions trained (M/F)	14(30%)	13(30%)
Nr. of business plans for SCORE Training developed by IAS/training institutions	0	0
Output 3: National capacity available to replicate
Nr. of national Expert Trainers available	2	0
Presence of a national centre of excellence for SCORE	0	0
Objective 2: Service providers deliver effective
% of Modules delivered with medium or high independence	Medium: 50 High: 50	Medium: 50 High: 50
Output 4: A locally adapted, gender-mainstreamed edition of the SCORE-training
Nr. of Modules gender-mainstreamed and adapted to sector and country	0	0
Output 5: SCORE M&E system established and up-to-date
Nr. of monthly/quarterly reports submitted on time	14	14
Nr. of incomplete/incorrect data sheets in M&E database	10	2
Output 6: Service providers trained to deliver
Number of trainers certified in SCORE module 1 (m/f)	2	0
Output 7: SMEs trained on SCORE Modules 1-5
Number of SMEs trained on Module 1 (M-owned/F-owned)	153(15%)	127(20%)
% of SMEs taking up more than one module	30	24
% of participants rating training as good or very good	78	77
Immediate Objective 3: Increased awareness of responsible workplace practices
Nr. of partner initiatives promoting responsible workplace practices as a result of ILO awareness raising	2	2
Output 8: Documentation and dissemination of good workplace practices is available
Nr. of case studies documented	8	6
Nr. of national disseminating events	2	3
Output 9:  Policy makers, labour inspectors and social partners have increased
Nr. of policy makers, labour inspectors and social partners trained (not in ToT/E)	60 (30%)
Nr. of NTAC meetings held	10	10

(Between brackets is the percentage of Females)
The table shows that realization of results is largely conform to planning, although the number of SMEs trained is less than planned. Besides delays with funding from the Ministry Manpower, another reason is that the focus has been on rolling out further modules among enterprises that already participated in the SCORE programme. The Ministry is also working on the certification standard for SCORE trainers in Indonesia. Pending this process the ILO SCORE team decided not to push the certification of trainers according to ILO standards.

Outcomes reported on the M&E online platform until 20 December 2015 are presented below:

% SME's reporting on one or more key indicators	12%
Average # EIT meetings/month	3
Average # EIP projects completed	10
Average # gender-sensitive practices	6
Average # employee suggestions/month	3
Average % change # grievances	-28
Average % change defect rate	7
Average % change energy usage	43
Average % change absenteeism	-1
Average % change labour turnover	-3
Average % change # accidents logged	-55
Average % change average wage/employee	6
Estimated average cost-savings due to SCORE (in USD)	3.12