Expatriate businesses staying put

Expatriate businesses staying put

A'an Suryana and Robert S. Finnegan, The Jakarta Post, Jakarta

Multinational corporations in Indonesia have considered carefully
travel warnings recently issued by several countries for
Indonesia in the wake of the Bali bombing and have elected to
continue operations, according to trans-national corporation
executives interviewed recently.

This low-level impact is attributed in part to the readiness
of multinational companies to deal decisively with turbulent
situations in Indonesia, in addition to the already limited
number of expatriates living here following the 1997 financial
crisis.

President director of BHP Steel Rob Crawford said on Friday
that his corporation has been here for 30 years and is not only
staying, BHP is planning significant expansion projects.

"We made it through the 1997 financial crisis, it was
difficult but we survived. There was also a downturn in
dispatches in the month of October, about 20 percent as a result
of uncertainty as to what was going to happen next and the
exchange rate deterioration," he said.

However, Crawford sees this as a short-term impact and added
that while people were stunned and saddened by this tragic loss
of life there is also the realization that this could happen
anywhere in the world at anytime in the future. He also
anticipates the situation stabilizing now and does not visualize
a long-term impact on business, while at the same time
acknowledging that continuing terrorist activity would alter this
assessment.

"If there were a string of terrorist incidents in the country,
this obviously would affect our confidence. But the issues that
have been impacting our business the most are the ongoing
problems in dealing with certain government policies, corruption,
security and legal certainty," Crawford said, adding that while
the government has recently announced measures to protect the
steel industry, they are yet to be tested in the marketplace and
BHP would prefer to see consistent protection measures across the
steel industry.

"The Bali bombing was a most tragic event against humanity
that can never be forgotten and must be addressed, but in
relation to our business environment these other issues can have
a definite material and long term impact," he said.

Crawford also said that training is an integral part of BHP
corporate policy.

"We have different levels of training and development, there
is a BHP Steel-wide program where people attend programs in
Australia, Singapore or the U.S., sponsored by the company. And
of course we have our own local training and development,
assisting our people in developing their skills, knowledge and
capabilities," he said, in addition to corporate policy for the
development and promotion of Indonesian nationals into senior
positions within the company. In 1995 there were over 10 foreign
nationals on the staff, now there are just three.

President director of BHP Steel Lysaght Indonesia, Willius
Suwanda is an example of this policy.

"We are very optimistic and are looking for opportunities.
While economic growth is not optimal at the moment, with the
advent of regional autonomy and decentralization there is
unlimited potential," he said. "It is a matter of us being
diligent and pursuing market opportunities."

Both executives are cautiously optimistic on the future.

"I would like to emphasize that we are confident about the
future," Crawford said. "We are very committed to Indonesia, our
employees and our customers. There is no way we are going to
leave them without support."

Nunik Maulana, spokeswoman of mining giant PT Rio Tinto
Indonesia, said there was no evidence of a massive pullout of
expatriates following the Bali bombing, which killed more than
190 people, mostly foreign tourists.

"The expatriates are working as usual, and they are quite
confident in their decision to stay," Nunik said.

PT Rio Tinto has two expatriates, while its subsidiary PT
Kaltim Prima Coal employs 23 expatriates, working in its coal
mining operation in Sangatta, East Kalimantan.

Despite repeated warnings, the majority of expatriates are
staying put.

According to Nunik, fears of insecurity among expatriates have
been calmed as the company has prepared contingency plans to
address the turbulent situation in Indonesia.

Their contingency plan includes evacuation plans and close
cooperation with the expatriates' respective embassies, as well
as coordinating with local security. In addition to the
contingency plan, expatriates are apparently psychologically
prepared for worst-case situations here.

Having experienced frequent social and political turmoil
throughout the country following the onset of the financial
crisis in 1997, expatriates appear to be "acclimatized" to these
unforeseen events.

Some foreigners and in particular Westerners, may still be
seen frequenting the malls and public places in Jakarta recently
despite the incident in Bali despite a rash of bomb threats here.

The Secretary General of the Ministry of Manpower, Djoko Sidik
Pramono maintains that there was only a slight decrease based on
the expatriate taxs received by the government this month.

Every expatriate is required to pay US$100 per month to the
so-called Funds for Skill and Expertise Development (DPKK) to the
government.

"It indicates that only a few expatriates had left Indonesia
following the bomb blast," he said, adding that the DPKK revenue
dropped 3 percent.

Meanwhile, other multinational and local companies vowed that
the impact of the travel warnings would not disrupt their
operations, as the number of expatriates were indeed already
limited here. Moreover, Indonesian professionals have been ready
to replace their foreign counterparts, they said.

PT Caltex Pacific Indonesia, for example, has for years
carried out training programs to accelerate the training of local
professionals in oil field operations.

The oil giant currently has some 150 expatriates on the
payroll. "It is a rule within the company that after three years,
expatriates must be replaced by local professionals," PT Caltex
spokesman Renville Almatsier said.

Indonesian conglomerate Bakrie Group, which has gone
international, said that only several expatriates left the
company after the 1997 monetary crisis.

Bakrie has gradually phased out expatriates -- which were
previously paid by U.S. dollar -- after the rupiah significantly
depreciated against the dollar in 1997.