Jakarta court orders seizure of Australian miner's assets
Jakarta court orders seizure of Australian miner's assets
Dow Jones, Jakarta
A Jakarta district court has issued an order to freeze US$30
million worth of assets belonging to PT Thiess Contractors
Indonesia, a unit of Australia's Leighton Holdings Ltd., to cover
claims from workers fired last year in an industrial dispute.
The South Jakarta District Court recently issued the order,
which bars Thiess from selling equipment at the Kideco coal mine
in East Kalimantan province, which Thiess operates under
contract, Peter Irwin, a commercial manager for the Australian
company, told Dow Jones Newswires Tuesday.
SaMtan Co.Ltd. of South Korea owns the mine through local
company PT Kideco Jaya Agung. The mine produced around 10.38
million tons of coal last year, making it one of the country's
largest producers.
In a statement to the Australian Stock Exchange Tuesday,
Leighton said the court hasn't yet seized any assets, and
operations were continuing normally. The company said it hoped to
reverse the decision through an appeal to the Indonesian courts
in the next few months.
"Thiess is confident that the dispute will be resolved by the
relevant Indonesian courts within the next month or two and will
have no material effect on its operations," the statement said.
Leighton's problems in Indonesia date back to July last year
when a dispute at the mine led to the company firing 170 workers.
The company agreed to pay $70,000 to the workers to end their
employment, according to the stock exchange filing.
The Australian company continues to employ around 800 people
at the mine, mainly Indonesians, according to Irwin.
The fired workers have disputed the settlement and are
demanding $300,000 through a local union, a sum which Leighton
has refused to pay.
The dispute highlights growing problems with labor in
Indonesia, which is pushing many foreign companies based here to
consider moving operations elsewhere, including Vietnam and
China.
At the core of the problem is the explosion of unions since
the fall of president Soeharto in 1998. Under Soeharto, who ruled
Indonesia with an iron fist for 32 years, one state-sponsored
union kept worker disputes to a minimum. Now, constant strikes
and increasing minimum wages are hurting the investment climate
here, business people say.
Concerns over Indonesia's legal system are also deterring
investment here, they add. Leighton said in its filing it was
willing to honor the original ruling by an industrial court to
pay compensation to the workers of $70,000.
Officials from the South Jakarta District Court weren't
available Tuesday to explain the decision to freeze assets.