Job cuts likely if gov?t bans hiring temporary workers: Report

Exxon Mobil, the world's biggest publicly traded oil company, said a proposed ban on the hiring of temporary workers in Indonesia may discourage investment and lead to job cuts in the country, Bloomberg reported Friday

Indonesia may scrap a 1995 law that allows oil companies to hire workers for as long as 20 years without the legal protection and benefits of permanent employment, the Jakarta Post said last week, citing Minister of Manpower & Transmigration Jacob Nua Wea.

Exxon Mobil employs about 1,300 in Indonesia, said Julia Tumengkol, a spokeswoman for Exxon Mobil. She declined to say how many were temporary workers, though the Jakarta Post said Exxon Mobil employs 360 temporary workers. The company's sub-contractors employ more than 2,400, some on a temporary basis.

?Hiring temporary employees as permanent workers would increase total operating cost and reduce the competitiveness of the Indonesian oil and gas industry,?Julia said. ?Layoffs would be likely in order to maintain competitive operating costs and some projects might not proceed,? she said.

ChevronTexaco Corp, the second biggest US oil company behind Exxon Mobil, said on Monday the proposed ban on the hiring of temporary workers in Indonesia might cause it to delay some projects.

ChevronTexaco's local unit, PT Caltex Pacific Indonesia, employs about 7,000 permanent workers. The unit, Indonesia's largest crude oil producer, has no temporary workers after a court last year ruled it had to hire 800 of them on permanent contracts.

Caltex Pacific's contractors employ more than 26,000 workers, according to the company's website. This may swell by more than 3,000 for a single exploration or construction project over a six- month to one-year period, said Walter Maguire, business development specialist with Caltex Pacific Indonesia.(*)