SOEs' labor unions rise to oppose privatization

SOEs' labor unions rise to oppose privatization

Dadan Wijaksana, The Jakarta Post, Jakarta

Just days after securing legislators' approval to sell 25
state companies this year, the government has met new resistance
from a federation of state companies' labor unions opposing the
privatization program.

A group of 50 people claiming to represent State-Owned
Enterprises' Federation of Labor Unions (FSP-BUMN) demanded the
government established a privatization law first before selling
state companies.

Without the law, "FSP-BUMN rejects privatization and urges an
end to all efforts towards privatization," it said in a statement
issued on Thursday.

A law on privatization is being drafted by the government.

FSP-BUMN's protest comes after a government announcement that
it had secured political support from legislators to sell off the
state companies.

That would smooth efforts to raise Rp 6.5 trillion from the
sale of state companies, the proceeds of which will be used to
plug the state's budget deficit.

Legislators' approval followed a series of closed-door
meetings with the House of Representatives' Commission IX late
last month.

Commission IX, overseeing financial affairs, agreed on the
list of state companies that the government intends to start
selling this year, according to a senior government official.

Mahmuddin Yasin, the deputy to the State Minister of State
Enterprises, said the government had also secured the consent of
Commission V, which oversees state companies.

"At Commission V we agreed to the criteria of state companies
that we may sell ... the list we presented Commission IX included
companies that fall in line with the criteria," Mahmuddin told
The Jakarta Post.

But intensifying labor protests against privatization, would
likely test legislators' resolve to defend its decision to
support the government's privatization program.

Among the list of companies to be sold is cement maker PT
Semen Gresik. Its planned sale last year ran aground amid massive
labor protests rejecting foreign ownership.

The government's failure to divest its 51 percent stake in
Semen Gresik to Mexico's cement company Cemex SA de CV dealt a
blow to efforts to attract foreign investment.

For now, opposition against the sale has subdued, but mainly
due to the government avoiding raising the issue in public.

Another major sale drawing protests is that of international
call operator PT Indosat, putting at risk a revenue of around Rp
4 trillion (about US$420 million) to Rp 5 trillion.

State Minister for State Enterprises Laksamana Sukardi has
said Indosat's union had dropped their objections during a
meeting with him on Tuesday. But his claim has yet to be
confirmed by Indosat's labor union.

Also unclear is whether Indosat's labor union has joined the
FSP-BUMN.

A member of another organization, grouping labor unions of the
state run post and telecommunication services, said the meeting
with Laksamana did not mean the end of its protests.

In its statement, FSP-BUMN urged for periodical dialogues
between the government and labor unions to seek common ground on
issues like privatization.