More talks with workers on privatization plan suggested

More talks with workers on privatization plan suggested

Adianto P. Simamora, The Jakarta Post, Jakarta

Labor experts warned that the government's privatization program
would face serious challenges from workers' unions unless the
government intensified its awareness campaign on the crucial
policy.

Bomer Pasaribu, a former manpower minister, criticized the
government for limiting privatization talks in Cabinet meetings
without making significant attempts to discuss the matter with
the workers of state-owned enterprises (SOEs).

"It is high time for the government to discuss the
privatization program (with the workers)," he told The Jakarta
Post.

Chairman of the high-profile 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.

"The political situation under the current reform era has
changed; the government must realize that it can no longer decide
by itself," he told the Post.

The comments followed demands on Monday from the labor union
representing the workers of the state-owned post and
telecommunications company (ISP Postel) for the government to
postpone the planned sale of shares in international
telecommunications operator PT Indosat Tbk to foreign investors
this year.

The 100,000-member union said it would stage a massive strike
if the government decided to proceed with the plan.

Such threats appears to be a rising trend among labor unions
opposed to the government's privatization plans. Workers fear
that the program will lead to layoffs and cuts in benefits.

Last year, the government was unable to sell a controlling
stake in cement maker PT Semen Gresik to Mexico's Cemex SA de CV
due to protests from various parties, including employees.

Last week's sale of the government's 51 percent stake in the
giant Bank Central Asia (BCA) to a consortium led by U.S.-based
investment firm Farallon Capital also nearly collapsed when
thousands of the bank's employees held a strike to protest the
transaction.

The privatization program is important for the government, not
only to raise cash to help finance the state budget deficit, but
also to maintain support from international lenders and help
revive investor confidence in the ailing economy.

Meanwhile, State Minister for State Enterprises Laksamana
Sukardi said on Tuesday that the government would push ahead with
the privatization program, including the sale of Indosat shares,
despite the protest.

Speaking on the sidelines of a seminar in Hong Kong, Laksamana
said that he would talk with the ISP Postel labor union to
explain to them the importance of the sale program, although he
acknowledged that should the threat be carried out, it could
cause a minor delay in the program.

The government, which currently holds a 65 percent stake in
publicly-listed Indosat, plans to sell a further 15 percent stake
in the company in June via the stock market, and another 45
percent stake in October to a strategic investor.

The Indosat sale is part of this year's privatization program,
aiming to raise some Rp 6.5 trillion (about US$650 million).

Some 24 SOEs had be listed to be privatized this year,
including Semen Gresik, pharmaceutical firms PT Indofarma and PT
Kimia Farma, Indosat, coal mining company PT Tambang Batubara
Bukit Asam, and Bank Mandiri.

Separately, Vice President Hamzah Haz appealed to workers to
support the government's privatization program because of its
importance to the state budget and the overall economy amid
limited available options.

"We have to sell our assets ... to cover our debts as other
incomes, from tax and the mining industry, are somewhat
uncertain," Hamzah said in the opening speech of the first
national seminar of the Indonesian Labor Union Confederation
(Gaspermindo) on Tuesday.