Labor union protests AAF closure plan
The Jakarta Post, Jakarta
A labor union is protesting the government's plan to close down fertilizer manufacturer PT Asean Aceh Fertilizer (AAF), calling for efforts to seek alternatives.
The Worker's Union of State-owned Enterprises Federation said it refused such a plan because the Aceh-based firm had made significant contributions to both the local and national economy.
"The presence of AAF here has benefited us by creating a very conducive environment for the economy, which has resulted in higher revenues for the central government," federation chairman Abdul Azis Hasan argued in a press statement.
The government wants to shut down AAF, which stopped operating in August last year, because existing and future natural gas (a key raw material for the fertilizer firm) production in the province was considered insufficient to cover both export commitments and the needs of other manufacturers there.
Abdul said since it started operation in 1979, AAF had contributed to the development of various economic sectors in the province such as employment, trade and small- and medium-sized enterprises.
"Besides, the Law No. 22/2003 on Oil and Gas says a maximum of 25 percent of gas output in the country must be allocated for domestic industry, while (in reality) we have only got 11 percent. If the government can save AAF, it will be a good example of how it prioritizes domestic business," he added.
The federation hopes the government will try to look at alternative sources to ensure a supply of natural gas for AAF.
Fertilizer firms in Aceh have been striving to survive due to gas supply problems as reserves from the main field, Arun, in the region are dropping, while existing reserves are converted into liquefied natural gas (LNG) and exported to Japan and South Korea.
The government has said however, that the proposal to shut down AAF still had to take into consideration of other shareholders -- from Malaysia, Thailand, Singapore and the Philippines.
It also will continue the operations of two other fertilizer firms in Aceh: PT Pupuk Iskandar Muda I and II.