Strike forces KPC to stop production
Fitri Wulandari, The Jakarta Post, Jakarta
Giant coal mining firm PT Kaltim Prima Coal (KPC) has been forced to halt production after hundreds of workers went on strike after they failed to reach an agreement with the shareholders over demands for a cash bonus.
KPC spokesman Nunik Maharani Maulana told The Jakarta Post the strike started early Friday.
The workers had been demanding a bonus from the planned sale of the company to PT Bumi Resources. The demand has been approved by KPC shareholders, Rio Tinto and BP Plc.
The two companies had announced they would sell its foreign- registered holding companies, which owned the KPC stake, to Bumi for US$313 million. The new owner will also assume the $187 million debt of KPC. The transaction is expected to be realized in October.
Nunik said the workers went on strike after they considered talks with the existing shareholders over the amount of "goodwill (ex-gratia) payment" had reached a deadlock.
"KPC management considers the strike to be illegal because shareholders have repeatedly stated their willingness to continue negotiations regarding the goodwill payment (bonus)," Nunik said.
"The union's claim is outside the legal agreement because the commitment to an ex-gratia payment over the sale of KPC's holding companies is a voluntary expression of shareholders' goodwill that has no basis under any Indonesian law, labor agreement nor employment contract."
Nunik said the shareholders had urged the workers to return to work so that negotiations could proceed.
According to Nunik, the company's production has been temporarily halted because most of the employees who went on strike came from the operation division.
Nunik failed to give the exact number of workers participating in the strike but reports by Antara from the firm's East mining site (in East Kalimantan's Sangatta area) said some 2,000 workers had refused to work at the site. KPC has a total of 2,700 employees.
It also said the employees demanded a 15 percent stake in the company.
Nunik could not yet estimate the financial losses resulting from the strike, but said the company could still export coal.
The strike added complexity to the prolonged dispute in the sale of the KPC shares.
The sale to Bumi has created controversy in Indonesia because the $500 million transaction is well below what had previously been negotiated with the central government.
KPC operates one of the largest coal mining sites in the world. Each year, the company produces 18 million tons of high quality coal which is shipped mostly to Asian clientele, such as Japan, and to Europe.
KPC generates an average of $500 million annually from the sale of coal.