Water workers protest 'illegal partnership'

Water workers protest 'illegal partnership'

JAKARTA (JP): Some 1,000 protesters of city-owned water
company PDAM Jaya staged a demonstration at City Hall on Monday
demanding an end to the partnership of PDAM Jaya and its two
foreign partners, PT TPJ and PT Palyja.

Organized by the PDAM Jaya Workers' Union, the protesters
argued the partnership violated seven existing laws.

Protesters, mostly men wearing blue company uniforms, were
escorted under the close watch of about 30 riot police.

Youbert Sianipar, one of the union leaders, said the seven
laws violated included Law No. 1/1967, which states foreign
investment is not permitted in the drinking water supply
industry.

Another violation, Youbert said, was of presidential decree
No. 16/1994, stating that any state partnership with a private
company had to go through the process of open tendering.

"In this case, there was no open tendering ... the partnership
was a done deal from the beginning," Youbert told The Jakarta
Post.

Youbert added that the remaining violations included those of
ministerial decree No. 3/1990 and city bylaws No. 13/1992 and No.
11/1993.

He said the decree stated that no state company assets could
be given to a private company.

"And the bylaws ... they stress that management of the
drinking water business, from production, distribution and the
taking of earnings, has to be done solely by the government,"
Youbert said.

"For these reasons, the partnership must be terminated."

Nani Sariati of PT TPJ on Thursday responded to the allegation
that the drinking water sector was closed to foreign investment,
saying this was incorrect.

Quoting information provided by PT TPJ's lawyer, Richard
Emerson, she said the drinking water industry could not be 100
percent owned by foreign investors, according to Article 6 of Law
No. 1/1967.

"Under Government Regulation No. 20/1994, a foreign investor
may own up to 95 percent of the initially issued shares in a
foreign investment joint venture company engaged in the drinking
water business," she said.

She said the cooperation agreement between PDAM Jaya and its
former corrupt partners, PT GDS and PT Kati, was "officially
terminated" and the drinking water business was officially handed
over to PDAM Jaya and its new foreign partners, PT TPJ and PT
Palyja, in May 1998.

However, Gary Skelcher, who handles legal matters at PT TPJ,
explained that the division of shares between PDAM Jaya and PT
TPJ gave them 80 percent and 15 percent respectively.

"The remaining five percent is still owned by PT Kati, but
(the company) has no control over it at all," Gary said.

Referring to ministerial decree No. 3/1990 on total government
control over drinking water management, Gary said that PT TPJ
merely managed "existing assets of PDAM Jaya", according to
clause 13 of the partnership contract.

"Ownership remains with PDAM Jaya," he said.

However, clause 14 seemed to contradict clause 13, as it
states: PT TPJ shall have "exclusive possession" and use of the
existing assets during the term, and the first party (PDAM Jaya)
is not allowed to sell, lease, transfer, dispose of or create any
security interest in any existing assets without the consent of
the second party (PT TPJ).

Meanwhile, 10 of the protesters were received by Deputy
Governor for Development Affairs Budihardjo.

Amir Tanjung, a member of the founding board of the Workers'
Union, told Budihardjo that PDAM Jaya and its foreign partners
had repeatedly threatened PDAM Jaya workers with "curt memos".

"They demote us and have even fired four of us without giving
any warning, any reason... nothing," Amir said. (ylt)