Layoffs loom on plan to revoke oil worker decree<\/p>\n
Moch. N. Kurniawan, The Jakarta Post, Jakarta<\/p>\n
Executives at foreign oil firms warned the Indonesian
\ngovernment against revoking a decree that allows them to retain
\ntemporary workers for an indefinite period, saying revoking the
\ndecree would increase costs and could lead to layoffs.<\/p>\n
The president of U.S.-based PT Caltex Pacific Indonesia,
\nHumayunbosha, said canceling the decree would burden oil firms
\nwith expenditures not related to their core business.<\/p>\n
\"This situation will force oil and gas firms to slash their
\nworkforces to offset the increase in expenditures,\" he told The
\nJakarta Post over the weekend.<\/p>\n
Last week, Minister of Manpower and Transmigration Jacob Nua
\nWea suggested revoking Ministerial Decree No. 5\/1995 on temporary
\nworkers at oil and gas companies.<\/p>\n
The decree allows oil and gas firms to employ workers on a
\ntemporary basis over a virtually indefinite period, a situation
\nwhich Jacob said stripped workers of their respect as human
\nbeings.<\/p>\n
Under a previous 1993 decree, oil and gas firms could employ
\npeople as temporary workers for two years, plus a one year
\ncontract extension.<\/p>\n
The Indonesian Prosperous Trade Union (SBSI) has lambasted oil
\nfirms and their subcontractors for using the 1995 decree to
\nprevent workers from gaining permanent employment status.<\/p>\n
But Pertamina and foreign oil firms oppose a revocation of the
\ndecree, contending such a move would make the oil industry less
\nefficient.<\/p>\n
\"It will hinder investment because it would makes companies
\nless competitive,\" Humayunbosha said.<\/p>\n
Oil companies face a high failure risk during the exploration
\nstage, a stage which is marked by huge capital expenditures.<\/p>\n
To minimize costs, the companies, as is often the case within
\nthe manufacturing and service sector, outsource some of the work
\nto subcontractors.<\/p>\n
According to data from Pertamina, oil and gas companies here
\nemploy approximately 17,700 permanent workers and 2,600 temporary
\nemployees.<\/p>\n
But permanent workers hired by subcontractors reportedly
\noutnumber those employed directly by the oil and gas companies.<\/p>\n
Caltex data shows that its subcontractors have 23,000
\npermanent workers, as compared to 6,500 employed by Caltex.<\/p>\n
According to the company, it granted all of its workers
\npermanent status last November. But only after a string of
\nprotests which disrupted production several times.<\/p>\n
U.S.-based ExxonMobil Oil Indonesia Inc. employs some 1,250
\nemployees, of which only 360 are temporary.<\/p>\n
The company's subcontractors reportedly have over 2,400
\nworkers, but their status is unknown.<\/p>\n
According to Humayunbosha, there is no quick solution to the
\nproblem of temporary workers, and revoking the decree could
\nbackfire by leading to layoffs.<\/p>\n
The corporate executive at American oil and gas firm VICO
\nIndonesia, Hasanuddin, agreed with Humayunbosha, but admitted
\nthat the 1995 decree put workers at a disadvantage.<\/p>\n
\"I understand Pak Jacob's concerns, as what he fears is
\nhappening,\" he said.<\/p>\n
But Hasanuddin suggested that before revoking the decree,
\nJacob first consult with oil and gas companies to try and reach a
\ncompromise.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/layoffs-loom-on-plan-to-revoke-oil-worker-decree-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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