Shake-up at Semen Gresik<\/p>\n
The owners of publicly-listed Semen Gresik finally moved
\ndecisively to stop the rot that has been eating away at their
\ncement company since last year. An extraordinary shareholders
\nmeeting of the government-controlled company voted on Tuesday to
\noust its chief executive officer and chairman before their
\ntenures end, in 2005 and 2003 respectively.<\/p>\n
The drastic move is urgently required to prevent further
\ndamage caused by street demonstrations and labor strikes staged
\nby employees who have opposed Semen Gresik's privatization.<\/p>\n
Some shareholders made a last minute attempt to abort the
\nmeeting by invoking a provision of the Limited Liability Company
\nAct that stipulates that directors or commissioners who are to be
\nfired before their tenure ends shall be given a chance to defend
\nthemselves. But common sense finally prevailed as only 0.006
\npercent of the 81.07 percent voting shares represented at the
\nmeeting voted against the shake up of the management and
\nsupervisory boards.<\/p>\n
The shareholders-- government with 51 percent, the investing
\npublic with 23.46 percent and Cemex Asia Holding Ltd with 25.53
\npercent-- held president Urip Timuryono and chief commissioner
\nSetiadi Dirgo responsible for the employee revolt which disrupted
\nproduction and caused inefficiencies at the company in December
\nand January.<\/p>\n
One cannot help but strongly suspect that both the president
\nand chairman, if not sponsoring, gave tacit support to the
\nemployees who demonstrated and went on strike in a bid to
\nsabotage the government's decision to sell its stake to Cemex
\nand, by so doing, these corporate officers miserably failed to
\ndefend the shareholders' interests.<\/p>\n
How could Semen Gresik employees have spent their paid time
\nconducting wild demonstrations and labor strikes, and even
\nharassing and threatening Cemex executives, and not been firmly
\ndealt with? How could the employees leave their jobs and travel
\nto Jakarta at Semen Gresik's expense, had it not been for the
\nsupport of management?<\/p>\n
Even more questionable have been the motives for the employee
\nrevolt, because what they have demanded has nothing to do with
\nlabor rights, employee welfare or future career prospects. The
\nmovement smacked of a fight by management to maintain their
\npositions against the interests of the owners, who hired the
\npresident and chairman in the first place.<\/p>\n
The government itself, as the majority owner, has decided to
\ndivest its entire stake in the company for its long-term good,
\nand the employees and the entire management team should fully
\nsupport the decision as long as it is lawfully executed and the
\ndeal does not harm the public interest or violate employee
\nrights.<\/p>\n
There would be lawlessness and chaos in the corporate world if
\nemployees were allowed to revolt against the decisions of the
\nowners of the companies that employed them. Succumbing to the
\nemployee revolt will kill the government program to sell 24
\ncompanies this year, seven of which are scheduled to be
\nprivatized in the first semester alone.<\/p>\n
Employees can be, and in fact are, encouraged to contribute
\nideas and suggestions for better corporate performance but
\nowners' decisions are beyond the authority of workers to meddle
\nin.<\/p>\n
The employee revolt in December and January caused Semen
\nGresik an estimated Rp 100 billion (US$9.5 million) in losses
\nfrom production disruptions and export cancellations, not to
\nmention the damage done to its image. The estimated losses alone
\nare already as large as 30 percent of Semen Gresik's
\nnet profits in 2000. Just look at how the Semen Gresik share
\nprice on the Jakarta stock exchange fell from Rp 7,500 before the
\nemployee revolt to as low as Rp 5,250 in December and January.<\/p>\n
The new president and chairman admittedly will face an uphill
\nbattle reestablishing a peaceful working climate as the group of
\nvested interests that wants to maintain Semen Gresik as their
\ncash cow would be unlikely to behave as good losers. They have to
\nwork hard to sell the corporate policy decisions already adopted
\nby the shareholders, reeducate employees on exactly what their
\nrights are, and inform shareholders of their authority.<\/p>\n
Their next task, which is certainly no easier, is to change
\nthe management of Semen Gresik's subsidiaries, Semen Padang in
\nWest Sumatra and Semen Tonasa in South Sulawesi, who have also
\nopenly supported employee revolts against the government's
\ndivestment decision.<\/p>\n
The decision at the Semen Gresiks' shareholders meeting is a
\nstrong signal that the government will act firmly on policy
\nmeasures it perceives to be right and accountable. Hopefully, the
\ngovernment will be equally resolute in pushing ahead with Semen
\nGresik's privatization.<\/p>",
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"sponsor": "Okusi Associates",
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