THE man threatening to bring down the Indonesian Government stands just 1.5 metres high. He sits barefoot in his shabby office, strumming his guitar and singing resistance songs with his stubborn supporters. Despite his size, Muchtar Pakpahan has become a powerful figure in Indonesia, a wily general commanding a rag-tag force that has confounded authorities. ''This is war,'' he says, ''a war for human rights. And we intend to win''. Mr Pakpahan has defied the odds while risking the wrath of his country's dictatorial rulers. The leader of a fast-growing, but technically illegal trade union, the former lawyer from north Sumatra has won international support while building Serikat Buruh Sejahtera Indonesia into the first viable worker's group in the restrictive nation. Mr Pakpahan claims the union has grown to nearly 100 units and 500,000 members. These figures are widely discounted by Western observers, but even they credit the organisation with phenomenal growth since forming just two years ago. Mr Pakpahan has tactfully skirted the edges of Indonesia's anti-trade rules to spread the gospel of workers' rights in every corner of the country. Although he has repeatedly been arrested, authorities have so far been unable - or perhaps afraid - to curtail his activities. The union seemed headed for a showdown in February, when authorities arrested Mr Pakpahan before a nationwide strike. However, the move seems only to have enhanced the labour activist's reputation, and broadened support. ''Muchtar may be more important to the labour movement than any other figure in Indonesian history,'' one Western diplomat said. ''He's managed to put himself in the middle of some major debates. And he's definitely got a voice.'' Indonesia is currently at risk of losing up to US$650 million (HK$5 billion) in trade benefits allowed by the American Generalised System of Preferences (GSP) unless it greatly improves its record on labour relations. A report from the American Embassy in Jakarta, ''Labour Trends in Indonesia'', details shortcomings in the most basic areas of worker rights. The right to organise, engage in collective bargaining and be free of discrimination are all guaranteed by the International Labour Organisation, which Indonesia joined in 1950. Currently, Indonesia requires all union activity to be co-ordinated through the Serikat Pekerja Seluruh Indonesia (SPSI), a moribund institution manned largely by former members of the military that has no credibility with workers. In the face of international pressure, Indonesia has shown signs of changing its repressive labour regulations. Enforcement of minimum wage standards, ignored in the past, is rising along with the wages themselves. ''Equity is the big issue in Indonesia right now,'' commented one official, ''The strikes are a symptom of the disparity in wealth nationwide. The Government knows it must respond.'' Mr Pakpahan has also been successful in focusing attention, both in the country and abroad, on official involvement in the murder of a labour organiser in east Java last May. The result has been a huge dose of unwanted attention from overseas, at a time when Indonesia has been trying to reassert its role as a regional power. The country hopes to host an Asia-Pacific Economic Co-operation summit this year and its leaders are clearly looking for ways to derail worker unrest and answer international critics. ''To be honest, the GSP itself isn't that important to Indonesia,'' an American official admitted in Jakarta. ''But it's a factor. Worker rights, human rights, the situation in Medan. They all add up to something Indonesia doesn't want.'' And all are issues Mr Pakpahan and his union will not let Indonesia forget.