KPC says no surrender to worker pressure

KPC says no surrender to worker pressure

Fitri Wulandari and Ridwan Sijabat, The Jakarta Post, Jakarta

The management of private coal mining firm PT Kalimantan Prima
Coal (KPC) strongly urged its 400 striking employees to go back
to work or else they would be deemed to have resigned.

Hasanuddin Rachman, who is representing KPC in the
negotiations with the workers, told The Jakarta Post here on
Monday that management would never accede to the workers'
demands, "and is still offering a last chance for them to go back
to work and to resolve the dispute amicably."

"The management will issue a second call to the striking
workers to return to work. They will be considered to have
resigned if this second call is ignored," he said, adding that
the management's first call had fallen on deaf ears.

Separately, KPC president Noke Kiroyan also issued a similar
warning to the workers on Monday.

Noke said that KPC would issue its second call on Tuesday. It
was initially to be issued on Monday, but the company wanted to
wait for the results of a meeting scheduled for Tuesday between
East Kutai regency's legislative council, the striking workers
and KPC shareholders.

Around 400 of the firm's 2,770 workers have been out on strike
since Aug. 28 in pursuit of an initial demand that the management
pay a bonus amounting to 15 percent of the value of the
acquisition deal recently clinched by KPC shareholders. The
firm's shareholders, Rio Tinto and BP PLC, agreed to sell their
entire stakes to local firm PT Bumi Resources for US$500 million.

Article 168 of Law No. 13/2003 stipulates that a worker who
fails to show up for work for five consecutive days without due
notification to the management shall be considered to have
resigned. Management have said they would confirm the workers'
statutory resignations if they failed to show up for work after
two consecutive calls.

Rachman, who is also the deputy chairman of the Indonesian
Employers' Association (Apindo), further said that in an
attachment to the first letter calling on the workers to return
to work, the management had proposed two options for ending the
dispute.

Under the first option, each worker would get Rp 2 million per
year of service as a bonus. Meanwhile, under the second option,
the workers would get a bonus calculated in accordance with their
basic monthly salary: Those who had worked for less than 10 years
would get a bonus amounting to 200 percent of basic monthly
salary, while those who had been employed for ten years or more
would get 300 percent of basic monthly salary.

Rachman insisted that the workers had no legal right to
receive a bonus following on from the $500 million deal.

"The workers have no right to a bonus as a result of the sale
of the company. According to the law, the workers have the right
to go strike only if their legal entitlements have not been paid
or have been denied.

"However, the management has shown its goodwill by offering a
small part of the proceeds from the company's sale as ex gratia
payments to the workers, but this has been turned down," he said.

Aware of the absence of a legal basis for their claim, the
striking workers reduced their demand from an initial 15 percent
of the sale proceeds to 14.5 percent, and finally to 1 percent.

The workers are grouped in five labor unions -- the KSBSI
(Indonesian Prosperous Labor Union Confederation), SPKEP, PPMI
(Indonesian Muslim Workers Union), Korpra and the SPK (Justice
Labor Union)

Separately, Apindo chairman Sofjan Wanandi warned that the
workers' demand for bonus payments could set a bad precedent that
would aggravate legal uncertainty and discourage foreign
investors from entering the country.

He said that both the central government and the East
Kalimantan provincial administration should take the necessary
measures to help calm the workers and enforce the law so as to
provide legal certainty both for investors and employees.