Labor union opposes Indosat sale plan<\/p>\n
Debbie A. Lubis, The Jakarta Post, Jakarta<\/p>\n
In another sign of what appears to be an emerging trend among
\nlabor unions in opposing the government's crucial privatization
\nprogram, the labor union representing the workers of state-owned
\npost and telecommunications firms (ISP Postel) urged the
\ngovernment on Monday to drop plans to sell a stake in the state-
\nowned international call operator PT Indosat Tbk to foreign
\ninvestors.<\/p>\n
ISP Postel chairman Abu Syukur said that the 100,000-member
\nunion would launch a full-scale strike if the government
\nproceeded with the sell-off plan.<\/p>\n
\"We are not speaking on behalf of ourselves but rather we do
\nnot want the government selling national assets to foreign
\ncompanies ...,\" he said during a press conference.<\/p>\n
The government, which currently holds a 65 percent stake in
\nthe publicly-listed Indosat, plans to sell a further 15 percent
\nstake in the company in June to raise around Rp 1.7 trillion
\n(about US$170 million).<\/p>\n
The government is also due to sell another 30 percent stake in
\nOctober to a strategic investor.<\/p>\n
The divestments are part of the government's privatization
\nprogram this year, which is aimed at raising a total of Rp 6.5
\ntrillion to help finance the 2002 state budget deficit.<\/p>\n
Earlier reports said that there were seven international
\ntelecommunications companies interested in buying a controlling
\nstake in Indosat, including Australia's Telstra Corp., Vodafone
\nAirtouch PLC, France Telecom's mobile unit Orange SA, Hutchison
\nWhampoa Ltd., Telekom Malaysia Bhd., Singapore Telecommunications
\nLtd., and British Telecommunications PLC.<\/p>\n
In addition to raising badly needed cash, completing the
\nprivatization program is also important for proving to both
\ninternational creditors and investors that the government is
\nstrongly committed to implementing painful economic reform
\nprograms.<\/p>\n
But the threat from ISP Postel may indicate growing opposition
\nfrom labor unions to the government's privatization and asset
\nsale program.<\/p>\n
Last year, the government failed to sell a controlling stake
\nin cementmaker PT Semen Gresik to Mexico's Cemex SA de CV due to
\nstrong opposition from various quarters, including company
\nemployees.<\/p>\n
Last week, the government's plan to sell a 51 percent stake in
\nBank Central Asia (BCA), the country's largest retail bank,
\nnearly collapsed following a massive protest by the bank's
\nemployees.<\/p>\n
Although the government has named a consortium led by U.S.
\ninvestment firm Farallon Capital as the new owner of BCA,
\nthousands of workers fearing job losses are still considering
\nstaging further demonstrations.<\/p>\n
Completing the BCA sale is crucial for the government's
\nattempts to win the support of international creditors grouped in
\nthe Paris Club for the rescheduling of more than US$5 billion in
\nthe country's sovereign debt maturing in 2002 and 2003. The debt
\nrescheduling is the key to ensuring the sustainability of the
\nstate budget.<\/p>\n
The government has listed some 24 state-owned enterprises as
\ncandidates for the privatization program this year. It also plans
\nto divest its stakes in several other nationalized banks.<\/p>\n
Officials from the office of the State Minister for State
\nEnterprises were not available for comment.<\/p>\n
ISP Postel plans to pay a visit to the ministry on Thursday,
\nbringing along some 10,000 members to express their opposition to
\nthe privatization program.<\/p>\n
\"We are white-collar workers. We will negotiate with the
\ngovernment first, but the union has around 100,000 members who
\nare ready to support action if we fail to reach an agreement with
\nthe government,\" Abu said.<\/p>\n
He also said that the country would suffer more losses if
\nquality assets like Indosat were to come under the control of
\nforeign investors.<\/p>\n
Asset sales opposed by labor unions<\/p>\n
(Company - stake for sale (%)):
\nSemen Gresik - 51;
\nBCA - 51;
\nIndosat - 45<\/p>",
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