Freeport strike: Daily loss of US$8.2m for Indonesian Govt

Freeport strike results in a loss of US$8.2 million a day for the Indonesian government

Bintang Papua, 19 September 2011

[Abridged in translation, with problems regarding some technical terms, by TAPOL]

[COMMENT: This is the first time we seen how much the Indonesian government benefits financially from the operations of this mining company in West Papua where the vast majority of the people live in conditions of dire poverty. TAPOL]

The Indonesian government is paying serious attention to the strike by thousands of Freeport employees in Mimika. This is clear from the arrival in Jayapura of the minister for energy and mineral resources as well as the director-general for minerals and coal who arrived in Jayapura and immediately went to a meeting with Freeport and others involved in this matter.

It was agreed at the meeting that should production and mining at Freeport be halted, there would be technological consequences both for the mining equipment as well as the possibility of landslides and flooding. This was said in a press statement following the meeting which also included the Papua chief of police and staff at the provincial government. They agreed that the stoppage of mining activities could cause landslides and flooding. Problems like this had occurred at the time of the strike of Freeport workers in July this year. The meeting conveyed an instruction to Freeport-Indonesia to take all measures necessary to protect the facilities at the mine and said that the government would do everything possible to ensure that these facilities continue to function without causing damage to the surrounding area.

The current strike has paralysed production and there have been other impacts. 'There should be negotiations but we are optimistic that the problem will be solved satisfactorily,' said first assistant of the Setda (?) of the province of Papua, Drs Eliezer Renmaur.

If the strike continues and production activities are halted, there will be an impact on the surrounding area and on safety for the workers. He said that if maintenance work is not carried out, there will be physical consequences. This might affect the 'blocketing' (?). The system of controlled explosions could be damaged and there could be landslides. [Apologies for not understanding these technical terms.] Water that is needed for drinking and other daily needs will become polluted.' If all this fails to function because of the strike, we can well imagine that very bad things will happen.'

The minister for energy and mineral resources has instructed his staff to pay close attention to all technical developments while the inspectors of several aspects of mining were instructed to anticipate the impact of the mine on the surrounding area and its effect on safety for the workers.

The president and CEO of Freeport Indonesia, Armando Mahler, said that when there is no production at the mine, the Indonesian government suffers a loss of US$8.2 million a day in taxes, revenue and dividends. This is what will happen if the strike does not end quickly.

He said that if the workforce of Freeport does not carry out productive activities along with mechanical support and so on, no-one will benefit which is why he has called on the workers involved in the strike to go back to work.

He said that the dispute is being mediated by the Ministry of Labour. The first mediation was planned for 15 September but the SPSI (the trade union) did not turn up. There was another attempt at mediation in Jakarta but the union did not turn up. 'If they don't turn up again, the matter will be handed over to the court for industrial relations. The company has offered a 22 percent increase over a period of two years, which means 11 percent increase a year. He said that on Saturday, 489 workers returned to Tembagapura to go back to work.

When the first strike occurred back in July, wages were paid even though the workers were not working, because on that occasion the SPSI made it a condition that the workers should be paid. But in the case of the second strike, those who do not turn up for work will not be paid.

Meanwhile, the police chief Drs BL Tobing said: 'The workers can go on strike which is their right, but there should be no attempts to intimidate those who turn up for work.'

ENDS