BCA sale to go on despite protest

The Jakarta Post, Jakarta

In a show of force to oppose the sale of Bank Central Asia (BCA) to foreign investors, thousands of employees of the country's largest retail bank staged a mass protest in several major cities on Monday.

But the government insisted that it would not back down from the sale plan, with Vice President Hamzah Haz saying the government was likely to announce the winning bidder of a 51 percent stake in the bank on Tuesday.

"The sale won't be canceled as it's part of the (country's) letter of intent (to the International Monetary Fund) and the IMF has approved it," he said following a Cabinet meeting.

The Indonesian Bank Restructuring Agency (IBRA) has shortlisted two final bidders, including a consortium led by U.K.-based Standard Chartered Bank Plc, and U.S. investment firm Farallon Capital.

The sale of government shares in BCA has been delayed since 2000 due to various reasons, including political interference.

The completion of the divestment program is seen as a litmus test by international lenders and investors for the government's commitment to the economic reform program.

The support of international lenders, particularly from the IMF, which is providing a multibillion dollar bailout loan for the country, is crucial as the government is planning to meet the Paris Club of creditor nations in April to seek a rescheduling facility for debts maturing this year.

The rescheduling facility is important to help limit the 2002 state budget deficit to 2.5 percent of the gross domestic product (GDP).

The sale of BCA will also provide cash to the government to help finance the budget deficit, and is also part of efforts to turn around the country's ailing banking sector.

But neither the IBRA top officials nor the State Minister of State Enterprises Laksamana Sukardi, who has the final say on the divestment program, could be reached for comment.

Meanwhile, Bank Indonesia Governor Sjahril Sabirin warned that a delay in the sale of BCA would have a negative impact on the overall economy.

He added that the sale process of the bank had been properly implemented and the divestment program should in turn benefit employees.

But spokesman for the BCA employees' union, Bilal Idris, said that BCA employees here were firmly against the sale and demanded that their representatives be included in all future negotiations involving the fate of BCA.

"It is the employees who have worked to make BCA one of the country's largest institutions. We should not be neglected," Bilal told the thousands of people, which largely consisted of BCA employees, at the Wisma BCA compound in Jakarta.

At least 4,000 staff members from the Greater Jakarta area joined the protest, causing at least 119 branches of BCA banks in the area to shut down temporarily.

Demonstrators marched from the bank's headquarters to the office of the Indonesian Bank Restructuring Agency (IBRA) and then on to the House of Representatives (DPR) building in Central Jakarta.

Many employees reportedly fear less generous benefits or even job loss under a new owner.

In East Java, some 100 BCA employees protested outside the East Java Council, demanding the government to cancel the sale of the bank to "foreigners," stating that they believed they would be treated unfairly by their new owners.

In West Java, the BCA employees' communication forum demanded that West Java councillors support them in their protest against the sale of the government's stake in the institution.

"We are fighting to make sure that the country's biggest asset does not fall into the hands of foreigners," Agus Sudradjat, one of the forum's seven representatives received by West Java councillors, said on Monday.

In Medan, North Sumatra, 15 representatives of BCA employees of the branch there met with North Sumatra councillors in connection with the imminent sale.

Representatives' spokesman Dwi Mensana Tarigan said that all BCA employees shared the fear that there could be a major restructuring of the BCA organization nationwide, which would most likely lead to "downsizing".

Through IBRA, the government took over BCA, which has 800 branches and 22,000 employees, from the Salim Group three years ago at the height of the regional financial crisis. The government injected huge amounts of bonds into the institution to recapitalize the bank.