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.