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.