Eratex Djaja is facing a debt postponement petition from supplier CV Pacific Indojaya regarding an alleged outstanding bill of 1.49 trillion rupiah (US$92.4 million).

The company is a subsidiary of PT Ungaran Sari Garments, a major textile company based in Semarang, Central Java.

It is known for producing goods for international brands such as H&M and Uniqlo.

The first court hearing is set for June 19, 2025 in Central Jakarta Commercial Court, with CV Pacific Indojaya as the petitioner and PT Eratex Djaja Tbk as the respondent.

Eratex Director Bejoy Balakrishnan has contested the petition, calling it “vexatious litigation”.

In a disclosure to the Indonesia Stock Exchange, Balakrishnan noted that CV Pacific Indojaya was established on December 27, 2024.

The invoices in question date from July to October 2024, prior to the company’s formation.

Eratex also pointed out that Pacific Indojaya transferred part of its claim against Eratex to an individual named Indra Pranaja Tjulan on May 5, 2025, through a sale and purchase agreement.

The company is questioning the legal grounds for this transfer and is considering its legal options in response.

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🔗 Source: Tirto.id

🧠 Food for thought

1️⃣ Indonesian textile industry’s history of severance disputes threatens worker security

The PKPU case against Eratex Djaja reflects a concerning pattern in Indonesia’s textile industry, where financial disputes frequently leave workers vulnerable.

From 2011 to 2019, at least three major Indonesian garment manufacturers faced bankruptcy or closure, resulting in multi-million dollar severance obligations to thousands of workers 1.

In cases like PT Kizone (2011) and Jaba Garmindo (2019), factory owners fled or declared bankruptcy without fulfilling legally mandated severance payments, which in Indonesia can amount to 18 months of wages per worker 12.

Workers from Jaba Garmindo, which produced for brands like Uniqlo, reported living in destitution after losing their jobs without the $5.5 million in severance they were collectively owed 2.

The financial instability in Indonesia’s garment sector creates cascading effects that ultimately impact workers the most severely, with some accepting below-minimum wage positions after losing their factory jobs 2.

2️⃣ International brands increasingly held accountable for Indonesian supplier obligations

Eratex Djaja’s position as a manufacturer for global brands like H&M and Uniqlo places it within a supply chain dynamic where international companies face growing pressure to ensure supplier compliance.

After years of refusing responsibility, Adidas ultimately reached a settlement in 2013 with 2,700 Indonesian workers from PT Kizone who were owed $3.4 million in unpaid severance when their factory closed 3.

Similarly, in 2019, advocacy by the Workers Rights Consortium helped 2,000 laid-off garment workers secure $4 million in owed severance from Hojeon, a Nike supplier in West Java 1.

These cases demonstrate the evolution of supply chain accountability, where major brands can no longer easily distance themselves from the financial obligations of their Indonesian manufacturing partners 2.

The successful campaigns for worker compensation have typically required extensive international pressure, including the #PayUpUniqlo campaign that mobilized global support for former Jaba Garmindo employees 2.

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