Mass axing faces Texmaco

Ridwan Max Sijabat, The Jakarta Post/Jakarta

More than 60,000 workers of the Texmaco Group may lose their jobs following the government's refusal to reschedule its huge debts.

The Central Committee for the Settlement of Labor Disputes (P4P) revealed on Friday that about 4,000 workers of three companies under the group had demanded that the P4P order the Texmaco management to dismiss them and provide severance pay and other compensation according to labor regulations.

Texmaco, however, claimed to have no funds to meet the demand.

"In our plenary session last week, all committee members were of the opinion that the Texmaco management needed to dismiss the 4,000 workers, but Texmaco president director Marimutu Sinivasan said the company faced financial problems complying with the standard dismissal requirements," P4P chairman Muda Alexander Sinaga told The Jakarta Post.

The workers concerned are employed by PT Texmaco Perkasa Engineering and PT Bridge Geboard Perkasa Engineering, both in Krawang, West Java, and a West Sumatra Texmaco company.

Sinivasan told the P4P hearing that Texmaco could not afford to pay severance since the company's funds in Bank Central Asia (BCA) had been frozen by the government, Sinaga said.

Sinivasan also said the mass dismissal of Texmaco Group's remaining 54,000 workers would be inevitable, since all companies belonging to the group were in a critical condition because of the holding company's financial problems.

Sinivasan was not available for comment, while Texmaco spokesman Yani Rahmadi declined to provide detailed information on the dismissal.

Meanwhile, Minister of Manpower and Transmigration Jacob Nuwa Wea asserted that Sinivasan and Texmaco Group had to provide severance payment for all dismissed workers and that the government had no obligation to help the ailing holding company.

"Sinivasan should be responsible for severance pay if P4P orders Texmaco to dismiss all its workers. He must comply with the Labor Law and respect the workers' rights, regardless of how he obtains the funds," he told the Post.

Nuwa Wea said he had been monitoring Texmaco's labor and financial problems closely, and that Texmaco had Rp 26 trillion in defaulted loans to a number of local banks and US$1.8 billion in foreign debt.

He also said the government had offered Texmaco assets to local and foreign investors several times, but none were interested in acquiring them.

"We have decided not to help Texmaco, because it has extremely large debts. Texmaco's BCA account has been frozen as collateral for its debts, because its assets are not saleable and, according to the government's assessment, they value far below the company's debts," Nuwa Wea said.

Sinaga expressed concerns about the workers' uncertain future and potential social problems, as the government had no will to help Texmaco.

Indonesia's unemployment stands at 9.6 million and 40 million are underemployed.

"The future of Texmaco workers will be the first labor issue the next government will have to address," Sinaga said.