Workers resume blockade at KPC as talks collapse

JAKARTA (JP): Coal mining company PT Kaltim Prima Coal (KPC) stopped operations on Tuesday for a second time in less than five weeks after striking workers resumed their blockade in the Sanggata regency, East Kalimantan.

KPC representative for Jakarta Bambang Susanto said the workers resumed the blockade on late Monday after a deadlock in one-day negotiations.

"We ended our negotiations at about 5 p.m. and an hour later they (the workers) began to block the mine again," Bambang told The Jakarta Post.

He said the negotiations failed to yield any results, even though the company compromised by revoking an earlier decision to dismiss striking workers.

Bambang said with reinstating the workers, the company insisted on imposing sanctions on them and the workers flatly rejected the offer.

Bambang said the company planned to suspend the wages of protesting workers during their strike to ensure that the settlement deal would not cause jealousy among workers who did not join the strike.

"The workers, however, only attended the negotiations on the condition that no sanctions would be applied to them," he said.

Out of some 2,600 KPC employees, 150 have joined the strike. They demand, among other things, a 15 percent salary increase and the reinstallment of daily allowances.

The workers began their strike on June 14 and effectively took over the company's mining site a day later with the occupation of important production facilities.

Short in coal stockpiles, KPC declared force majeure earlier this month to avoid paying demurrage to its international buyers.

But the strike alone, according to the company, was costing it about US$1.4 million per day or an equivalent of 50,000 metric tons of coal.

It further said the government suffered losses of Rp 3 billion ($315,000) a day in unpaid royalties and tax revenue.

KPC reported last week that the striking workers had lifted the blockade on July 1, with both sides agreeing to return to negotiations.

"They've decided to resume negotiations after meeting with the local regent and the local council," Bambang said.

As operations were up, he said, the company also revoked its force majeure status.

However, he said, KPC would reinstall its force majeure status if the blockade prevailed for too long a period.

"Our stockpile can last for only three days," he said.

KPC is jointly owned by giant Anglo-Australian mining company Rio Tinto and the Anglo-American-based oil and gas company BP Amoco PLC.

The strike was organized by the Indonesian Prosperity Trade Union (SBSI), which is one of three labor unions present at KPC.

A SBSI news release said last week Rio Tinto was facing similar problems with its workers in Australia.

"It (KPC's case) is almost the same as the continuous conflict with Rio Tinto companies in Australia, which are known worldwide," the labor organization said.

SBSI further said it was told about upcoming protests by Rio Tinto workers in the United States, Chili, Brazil, Norway and South Africa.(bkm)