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PT Freeport Mine Managers Turn Rabid on Indonesian Strikers

PT Freeport Mine Managers Turn Rabid on Indonesian Grasberg Strikers

26 September 2011

Government-mediated talks broke off last week and labour relations further soured between Freeport-McMoRan and 8,000 striking Indonesian miners of ICEM affiliate FSP-KEP (SPSI), the Trade Union of Chemical, Energy, and Mine Workers (CEMWU). The PT Freeport Indonesia Workers’ Union this week meets the halfway mark of its 30-day strike that now could be prolonged at the world’s largest gold and third largest copper mining complex Freeport McMoRan’s Grasberg mine in eastern Papua Province, New Guinea Island.

Management spite was apparent at the strike’s start on 15 September and it worsened following the breakdown of three days of talks with the Manpower Ministry in Jakarta on 22 September. PT Freeport managers relieved 138 union shop stewards of their job duties on Friday. The union responded by stating the strike likely will be extended beyond 15 October.

Since the wage, pension, and community funds strike started, managers have coerced workers to return to work with threats of dismissal, they have pressed contractors’ employees into production, and now they try to decimate the union by sacking union stewards and isolating the branch union’s other leaders.

PT Freeport management has attempted to coerce workers to sign a statement saying they will return to work or face getting fired. But despite this, only 500 workers are manning operations and many are staff of contractors. (See a list of contractors here.)

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Freeport-McMoRan last week issued a statement last week saying it was losing three million pounds of copper production daily, and 5,000 ounces of lost gold output daily. To increase pressure on miners to abandon the strike, the company also warned of lost revenues to the Indonesian government and to the seven native groups around Timika, Papua, that Freeport-McMoRan is obliged to support.

The opening salvo came at the strike’s outset when Managing Director Armando Mahler announced a ‘no-work, no-pay’ policy. After last week’s mediation failure, union and government sources said ‘complete distrust’ exists between Mahler and his team and the union.

Thus, PT Freeport Indonesia Workers’ Union asked that US-based Freeport-McMoRan Chairman James Moffett enter discussions. Mine union leaders remember Moffett’s visit a few years ago when he encouraged workplace leaders to engage in ‘win-win’ principles of labour relations.

At last week’s mediation, PT Freeport, 91% owned by Freeport-McMoRan and 9% by Indonesia’s government, said it would not budge from a wage offer of 11% in each year of a two-year accord. (The bi-annual contract comes due on 1 October.) The average miner’s wage rate at Grasberg is US$1.50-per-hour. The union was seeking a doubling of that to US$3-an-hour but in mediation last week, the FSP-KEP miners’ branch union offered a compromise and proposed a 65% increase. The company would not move from 11%.

It has offered slight increases in education and housing support and in shift pay, but has said it would not deviate from wage increments that other foreign investors pay in Indonesia. It also refuses to base a pension scheme—50% paid into by workers—on multiplied years of service, or hear the union’s demands for enhanced development and opportunities for the indigenous people of Papua.

Grasberg is Freeport-McMoRan’s biggest revenue maker and a year ago, the company’s chief financial officer called it ‘very low cost and a high cash flow generating asset with a very long life.’ The company’s revenues this year from Grasberg are expected to be lower because it is mining lower-grade sections of the open pit mine. But Freeport-McMoRan is bullish on the future; it is developing a deep underground mine adjacent to Grasberg that contains high grades of copper and gold in the same ore body.

The ICEM has intervened in this dispute and through its Indonesian Affiliates’ Union Chairman, D. Patombong Sjaiful of FSP-KEP’s CEMWU, is giving direct aid and support to the Grasberg strikers. They need the solidarity and support of all miners and all trade unions in mining and other industrial sectors.

In ICEM outreach to the union, when asked to characterise the strike, one officer responded by saying, ‘determination. That’s the one word that describes workers. We’re determined to change our future through the work we do for this company.’


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