KPC?s goodwill payment bad precedent in mining industry: IMA

The decision of PT Kaltim Prima Coal?s shareholders to pay a goodwill payment of US$6 million or about Rp 40 billion to the company?s employees will become a bad precedent to the country?s mining industry or in overall investment activities, Kompas reported on Monday.

The executive director of the Indonesian Mining Association (IMA), Paul Coutrier, said that the decision of KPC?s shareholders to pay a goodwill payment to protesting workers would only discourage new investors from investing in Indonesia.

?Other companies are worried that their employees would also ask the same thing if there is a transfer of ownership,? Coutrier said, adding the labor dispute should be dealt with the existing regulation.

KPC?s shareholders finally agreed to pay a goodwill payment of about US$6 million or equivalent to Rp 50 billion to employees as a bonus from the sales of the company?s 100 percent shares to PT Bumi Resources.

The shareholders, Rio Tinto and BP agreed to pay the bonus to end workers? strike which has taken place since last month.

The payment will be made after the completion of the sales to Bumi Resources later next month. (*)