Strike forces KPC to stop production<\/p>\n
Fitri Wulandari, The Jakarta Post, Jakarta<\/p>\n
Giant coal mining firm PT Kaltim Prima Coal (KPC) has been
\nforced to halt production after hundreds of workers went on
\nstrike after they failed to reach an agreement with the
\nshareholders over demands for a cash bonus.<\/p>\n
KPC spokesman Nunik Maharani Maulana told The Jakarta Post the
\nstrike started early Friday.<\/p>\n
The workers had been demanding a bonus from the planned sale
\nof the company to PT Bumi Resources. The demand has been approved
\nby KPC shareholders, Rio Tinto and BP Plc.<\/p>\n
The two companies had announced they would sell its foreign-
\nregistered holding companies, which owned the KPC stake, to Bumi
\nfor US$313 million. The new owner will also assume the $187
\nmillion debt of KPC. The transaction is expected to be realized
\nin October.<\/p>\n
Nunik said the workers went on strike after they considered
\ntalks with the existing shareholders over the amount of \"goodwill
\n(ex-gratia) payment\" had reached a deadlock.<\/p>\n
\"KPC management considers the strike to be illegal because
\nshareholders have repeatedly stated their willingness to continue
\nnegotiations regarding the goodwill payment (bonus),\" Nunik said.<\/p>\n
\"The union's claim is outside the legal agreement because the
\ncommitment to an ex-gratia payment over the sale of KPC's holding
\ncompanies is a voluntary expression of shareholders' goodwill
\nthat has no basis under any Indonesian law, labor agreement nor
\nemployment contract.\"<\/p>\n
Nunik said the shareholders had urged the workers to return to
\nwork so that negotiations could proceed.<\/p>\n
According to Nunik, the company's production has been
\ntemporarily halted because most of the employees who went on
\nstrike came from the operation division.<\/p>\n
Nunik failed to give the exact number of workers participating
\nin the strike but reports by Antara from the firm's East mining
\nsite (in East Kalimantan's Sangatta area) said some 2,000 workers
\nhad refused to work at the site. KPC has a total of 2,700
\nemployees.<\/p>\n
It also said the employees demanded a 15 percent stake in the
\ncompany.<\/p>\n
Nunik could not yet estimate the financial losses resulting
\nfrom the strike, but said the company could still export coal.<\/p>\n
The strike added complexity to the prolonged dispute in the
\nsale of the KPC shares.<\/p>\n
The sale to Bumi has created controversy in Indonesia because
\nthe $500 million transaction is well below what had previously
\nbeen negotiated with the central government.<\/p>\n
KPC operates one of the largest coal mining sites in the
\nworld. Each year, the company produces 18 million tons of high
\nquality coal which is shipped mostly to Asian clientele, such as
\nJapan, and to Europe.<\/p>\n
KPC generates an average of $500 million annually from the
\nsale of coal.<\/p>",
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"sponsor": "Okusi Associates",
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