SOEs labor union wants stock option facility

SOEs labor union wants stock option facility

Fitri Wulandari, The Jakarta Post, Jakarta Post

The Federation of State-Owned Company Labor Unions (FSP-BUMN)
demanded that employees of state-owned enterprises (SOEs) be
allowed to own shares in the SOE they work for via a stock option
facility so that they can have a role in supervising the SOEs.

Chairman of FSP-BUMN Bambang S. Syukur said on Wednesday that
the stock option facility should be included in the bill on SOEs,
which is currently being drafted by the government.

"If employees could buy shares in the SOE, we could have
representatives on the board of commissioners as supervisors," he
told reporters on the sidelines of a seminar on SOEs and
privatization.

He said that employees should at least have a 20 percent stake
in the SOE they work for to protect their interests, which
includes fending off the adverse affects of privatization.

In addition, based on Law No 21/2000 on Labor Union, employees
may buy SOE shares.

FSP-BUMN who staged an anti-privatization protest in mid-April
said the privatization program would only inflict losses on the
country, including massive layoffs.

"There have been cases where the privatization of SOEs has
been successful, but many cause trouble, and spark disputes
between employees and the company's board of directors," Bambang
said, referring to the failed privatization of some SOEs that
have met resistance from employees.

For the past three years, the government has been trying to
privatize SOEs in a bid to raise more cash for the state budget
and improve the poor performance of SOEs.

At present there are more than 160 SOEs in Indonesia.
According to a 1997 audit result, more than half are in a weak
financial condition. SOEs poor performance was mainly due to
inefficiency, poor management and corruption.

However, the government effort to push the privatization
program has met opposition from various parties, including SOE
employees.

Last year, the government failed to complete the sale of a
stake in 16 SOEs that was expected to rake in some Rp 6.5
trillion (US$730 million) to help plug the deficit in the state
budget.

Revrisond Baswir, a noted economist of Gajah Mada University,
said that giving shares to employees was an important part of
restructuring SOEs.

"Giving share ownership to employees will increase their share
in supervising SOEs," he said.