Legislators still insist on having a say in privatization plan

The Jakarta Post, Jakarta

Legislators are still insisting on having a say in the government's 2002 privatization program, despite last week's approval by the House of Representatives, signaling fragile support for the vital yet troubled program.

Last week the government said it would launch the sale of 25 state companies after securing approval from the House's Commission IX, which oversees financial affairs.

Commission vice chairman Faisal Baasir, however, said the deal did not rule out further debate on the planned sales.

"What we approved was only in general terms, further discussion will still be needed for more in-depth examination," Faisal told The Jakarta Post over the weekend.

More discussions could add to uncertainties over the privatization program bogged down by resistance from workers and politicians riding on national sentiments.

At stake is Rp 6.5 trillion (US$679 million) to help plug the state budget deficit of around Rp 42 trillion this year.

Also crucial are efforts to woo back foreign investment that would lend the economy a boost, which the tight state budget is unable to.

Commission IX's approval followed a series of closed-door meetings, and was preceded by hearings with Commission V, which oversees state enterprises.

But that might not be enough, Faisal said.

The government might not only have to return to Commission IX for more talks, but could also be called in by other commissions should a problem in one state company arise, he explained.

Problems loom. Workers at state companies have added to the pressure against planned sales to foreign investors, calling them a sting to national pride.

Last week, a group of 50 people claiming to represent all labor unions at state-owned enterprises urged the government to cancel its privatization program.

They demanded a privatization law be set up first, and the involvement of workers during privatization talks. A law on that is being drafted by the government.

Commission V chairman Suryadharma Ali added that the government also needed the consent of commissions that were in charge of industries under which the state companies were operating.

"... because if it (the approval) is not comprehensive and not integrated, it will cause problems in the future," he said.

By law, the government is not obliged to seek the House's approval for its privatization program.

Experts have long urged the government to come to an agreement with legislators on privatization guidelines to avoid excessive interference by legislators.

Legislators last year nearly canceled the sale of state-owned palm oil plantations to a Malaysian company, asserting that assets like these should remain under Indonesian control.

A planned sale that may rip open old conflicts, is that of cement maker PT Semen Gresik to Cemex SA de CV of Mexico.

Backed by local politicians, fierce protests by Semen Gresik's workers killed off three years of efforts to sell the company to Cemex in a deal worth around $520 million.

Now employees from Bank Central Asia (BCA), state-owned telecommunication firms PT Telkom and PT Indosat have taken to the streets in protest of their privatization plans.

Former manpower minister and labor activist, Bomer Pasaribu said earlier the government had to do more to involve workers in its privatization program.

Chairman of the Indonesian Prosperity Trade Union (SBSI) Muchtar Pakpahan concurred, saying: "The government had to change the old way of making privatization policy by also listening to the aspirations of the workers to gain support for the program".