Govt must talk to stakeholders on Semen Gresik case

Govt must talk to stakeholders on Semen Gresik case

The management of publicly listed state-owned cement producer
Semen Gresik is caught in the middle of a fight between its major
shareholders, the government and Cemex SA. The Jakarta Post
interviewed Semen Gresik president director Satriyo last week
about the company's efforts in managing its operation amid the
conflict.

Question: How is the dispute between the government and Cemex
affecting Semen Gresik operations?

Answer: I am not denying the fact that the concentration of a
human being in working on a certain task will be divided when he
or she has to deal with another problem. That is exactly what the
Semen Gresik management is dealing with right now; we cannot
perform 100 percent due to this dispute.

Our concentration is now divided between trying to help the
disputing parties solve their problem. We have to be ready to be
called by the government at any time and prepare answers when
there is question regarding the dispute.

We hope the dispute can be immediately settled based on good
faith between the government and Cemex. I am optimistic that they
can sit at the table and seek a win-and-win solution to the
dispute. Anything in business is possible.

What is the expectation of management over the dispute
settlement?

The management is not directly involved in the negotiations
for dispute settlement. We have only been asked by the government
to supply supporting data and documents.

However, negotiations should not only be based on economic
matters, but also take into account local culture. There is a
deep sense of ownership in the local community for Semen Gresik,
since the company has intensively involved them in a number of
community development programs.

The government should also take into account the character of
Semen Gresik workers; Semen Gresik is a symbol of pride for all
of its workers. It is not about money or fear of layoffs, but
more about pride in having the first cement plant in the country
constructed by their own (Indonesian) hands and skills.

Do you mean that the government also needs to talk to the
labor union, local community and administration for settling the
dispute?

Whatever the solution is, the government should first discuss
it with the labor union, local administration, local community
figures and the surrounding community where Semen Gresik is
operating.

We have requested that the government ask for their input in
seeking solutions to the dispute.

The locals, empowered by the current Autonomy Law, actually
have the right to give their opinion on affairs affecting their
territory.

As for me, as part of the company's board of directors, I will
remain working as a professional. However, I have to admit that I
cannot ignore the situation surrounding me. There are local
legislators and clerics who want their voices heard by the
central government.

Local people have long felt that they have been deceived by
the central government. With such a stance, it is difficult for
me to convince them with any solution proposed by the central
government.

Whether they agreed or not to the solution offered, the
central government must talk to them first. That is most
important.

How do you explain the accusation that Semen Gresik management
is controlling the labor union for their own interests?

We are not controlling the labor union. The structure of labor
unions in state enterprises is unique and similar. It is the
manifestation of the now-defunct State Employees Corps (Korpri)
-- which was set up by the New Order regime.

When Korpri still existed, state enterprises' board of
management was also included in the corps. As a result, now, part
of management is also still involved in the union.

The rejection by the Semen Gresik labor union for Cemex
acquiring the company's shares or assets is only a matter of
pride of having the company.

However, I have repeatedly called on all directors and
employees to uphold their professionalism by meeting the targets
set out by the company.

Semen Gresik workers are indeed professional as the company
managed to pass its production target last year, despite concerns
that we may not be able to achieve it due to a number of
problems.

Because of our hard work, and this is acknowledged by Cemex
officials, we managed to increase our production to over seven
million tons last year, far above our installed capacity of 6.9
million tons.

It is the first time in Semen Gresik's history that we have
managed to produce 700,000 tons of cement per month on average
last year, from 640,000 in the previous years.

Our success has also been followed by our subsidiary PT Semen
Padang, which managed to recover its operation after the revolt
in 2001. We are on the right track now.

In addition to that, I have eradicated corrupt practices in
Semen Gresik. To prevent them from occurring in the future, I
have urged all workers to sign a commitment statement with their
wives as a moral campaign for an anti-corruption drive.

Certain parties have accused us of refusing to change; this is
not true. We are changing and our business is revolving. We don't
hide anything, our tenders are always transparent and under the
supervision of Cemex.

I have also refused to become a commissioner in Semen Gresik
subsidiaries or in any other companies to avoid conflict of
interests. In a bid to close opportunities for corrupt practices,
I have also called on all Semen Gresik partners and clients not
to offer any gifts to Semen Gresik employees.

We don't do business as usual, there have been significant
changes in Semen Gresik.

There is also an accusation that you are behind the labor
union in rejecting the government's dispute settlement. Is that
true?

I am not an agent for Cemex. There are a lot of rumors going
around. I have also been accused of receiving bribes from Cemex
for defending their interest in Semen Gresik. That is not true. I
have repeatedly said that I am in the middle (of the dispute) and
a professional.

Other cement companies are now consolidating their operations,
but Semen Gresik remains stuck in this dispute. How damaging is
it?

Other cement companies are actually facing different problems.
They are not consolidating. Their problems are more complicated
than ours, mostly related to changes in working culture, from
local to international culture. This is a more deep rooted
problem.

Semen Gresik is only facing the problem of an ownership
dispute and it is a matter of pride, not about working culture.

Indeed our image as a public company has been impacted by the
dispute. Thus, we urge the government and Cemex to immediately
settle it before it proliferates to other areas and makes
investors uncomfortable in holding our shares.