Monday, 21 Augst 2017 | 13:37 WIB

Freeport Indonesian Workers Face Layoffs

Workers are mining in the underground tunnels of PT Freeport Indonesia. (PT Freeport Indonesia)

JAKARTA, NETRALNEWS.COM - Over 19 thousand workers of PT Freeport Indonesia and its affiliated contractor and privatized companies face the threat of losing their jobs if the US-based copper and gold mining firm halts its production and exports.

It was reported at least 20 expatriate workers have returned to their countries, and over 300 workers have been laid off as a result of the contract crisis between the government and PT Freeport Indonesia, which operates in Mimika District, Papua Province.

Mimika District head Eltinus Omaleng admitted that PT Preeport and a number of affiliated privatized/contractor companies had started to send their workers home, including expatriate workers from various countries.

"In a report of the Mimika Manpower Service, the number of employees who are already laid off has reached over 300 persons. Workers of PT Freeport were sent home. Those who are on leave are ordered not to return to Timika (district capital of Mimika), until the company's operations return to normal.

Every day about 30 to 500 workers are sent home; possibly now they would have reached over one thousand," Omaleng told Antara after receiving thousands of workers who held a rally in front of his office on Feb 17.

The Immigration Office of Tembagapura in Mimika said more than 20 expatriate employees who work with PT Freeport Indonesia's contractor companies had left Timika, Papua, for their countries.

Head of the Immigration Office Jesaja Samuel Enock said in Timika on Feb 19 that some of the expatriate workers were affected by the worker streamlining policy of their companies.

"Some of them have their work contract expired, but some others were affected directly by the crisis which befell PT Freeport. All of them are from the contractor and privatization companies of PT Freeport Indonesia," Enock stated. Expatriate workers who work with PT Freeport were mostly from Australia, New Zealand, the United States, Canada, and the Philippines.

According to the Timika Express online media, there are over 32 thousand workers with PT Freeport Indonesia and other privatization/contractor companies. Some 60 percent of these workers or more than 19 thousand are facing layoffs.

The Manpower and Population Service (MPS) of Papua Province has therefore asked PT Freeport Indonesia to report its plan to lay off thousands of its workers. The Papua MPS Head, Yan Piet Rawar, said on Monday (Feb 20) that in a recent meeting, PT Freeport promised to report its plan to severe work relations with their workers.

"The Papua provincial government has not yet received a report that PT Freeport will lay off some of its workers," Rawar noted.

The Papua manpower chief official said the layoff process should be based on Law No. 13 Year of 2003 on Manpower and the law on the settlement of industrial relations dispute.

"Thus, PT Freeport Indonesia could not lay off its workers all of a sudden, because layoff can only be carried out with a clear reason, whether the company is losing or other reasons. But until now, we are yet to receive an official report from PT Freeport," he remarked.

If PT Freeport has reported its reason to carry out the layoff, the Papua Manpower Service will study the report. The plan to lay off the workers will have impact on the economic conditions of Papua in general and Mimika in particular. Therefore, Rawar hoped that PT Freeport would reconsider its plan carefully.

Papua Regional Police Chief Inspector General Paulus Waterpauw called on the managements of PT Freeport and a number of its contractors not to arbitrarily lay off their workers.

"It is admitted that it is the company's responsibility to take efficient measures, but it may not be arbitrarily in taking a decision (layoff). It should coordinate with the government well. It is feared to create various undesired perceptions if not done unilaterally," Paulus noted Waterpauw in Timika last Friday.

It was earlier reported that PT Freeport Indonesia had stopped its production activities with effect from Feb 10, this year, following the government's objective to have greater control on raw mineral resources. The government has proposed that the Special Mining Operations Permit (IUPK) should be used in place of the existing Contract of Work (CoW).

PT Freeport is reluctant to agree to the Indonesian government's proposal, especially since IUPK holders are obliged to divest up to 51 percent of the shares, which means they will no longer be in full control of the company. Furthermore, Freeport is planning to sue the government in the International Court of Arbitration.

Minister of Energy and Mineral Resources Ignasius Jonan had remarked on Feb 18 that PT Freeport's plan to bring up the dispute in the International Court of Arbitration is legitimate, adding that the arbitration measure is far better as compared to raising issues on dismissal of employees as a tool to apply pressure on the government.

"Global corporations always treat their employees as valuable assets rather than as mere tools to gain profits," Jonan remarked. Meanwhile, Freeport McMoRan Inc, the parent company of PT Freeport Indonesia, stated that the Indonesian government had stopped the CoW, signed in 1991, unilaterally and changed the status into an IUPK.

President and CEO of Freeport McMoRan Inc Richard C. Anderson stated at a press conference in Jakarta on Monday that his party cannot simply foregot the legal rights included in the CoW. Based on the company's records, Freeport had invested US$12 billion and is currently generating $15 billion and has absorbed 32 thousand Indonesian workers.

He further stated that the government had received 60 percent of the direct financial gains from Freeport's operations. Taxes, royalties, and dividends paid to the government since 1991 have reached $16.5 billion, while Freeport McMoRan had received $108 billion in dividends.