Strike forces KPC to stop production
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.