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Freeport, Workers Start New Negotiations

Freeport, Workers Start New Negotiations

Mining giant Freeport Indonesia announced on Monday that it had entered another round of negotiations with union workers demanding better welfare.

The company said in a statement that it was joining with the Indonesian Chemical, Energy and Mine Workers Union to open the 18th Collective Labor Agreement negotiations, which cover the period from now until 2015.

Freeport, which operates a massive copper and gold mine at the Grasberg site in Papua, added that it would negotiate 'in accordance to Indonesia's manpower laws.'

According to the statement, finding a mutual ground on the rules of engagement and on the procedures of negotiations will be the first agenda item.

Only after procedural agreement is achieved will both parties proceed to negotiate 'the substantive aspects of the agreement,' the company said.

'We have been working in collaboration with members of the union through LKS Bipartite [Bipartite Cooperation Body] in which many issues have been addressed to mutual agreement,' Rozik Soetjipto, president director of Freeport Indonesia, said in a statement on Monday.

'Based on our earlier meetings, we fully expect constructive and productive negotiations with the union.'

Freeport Indonesia has faced major disruptions in the past due to labor issues.

Earlier this month, several workers hired by Freeport contractors went on strike for several days.

In 2011, thousands of Freeport workers conducted a prolonged strike after failing to get a better deal with the management. The strike took an ugly turn when striking workers clashed with security staff, leaving at least one person dead.

At the time there were also attacks from unidentified gunmen, accusations police officers had received support from Freeport and concerns over Freeport's use of foreign military to guard its assets.

Freeport was forced to declare force majeure before the strike concluded in March 2012 when both parties reached an agreement.

Labor unrest is one of several challenges faced by Freeport and other companies operating in the volatile province of Papua.

Last year, Freeport's revenue fell 23 percent and gross profit fell 55 percent from its Indonesian operation, which contributed 21.7 percent, or $3.92 billion, to Freeport's global consolidated revenue in 2012.


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