Ministry, legislator concerned about KPC force majeure
By: Hans Bodega & George Blunt
Thursday, July 6 2000 - 06:00 AM WIB
The Ministry of Mines and Energy and legislators voiced on Thursday concerns about coal mining company PT Kaltim Prima Coal's move to declare force majeure on its sales contract following the three-weeks-long workers strike at its coal mine in Sangatta, East Kalimantan.
"The Ministry of Mines and Energy is concerned about the unexpected situations at PT Kaltim Prima Coal which resulted in the company's declaring force majeure from July 7 until it is able to resume normal production," director general of mining Surna Tjahja Djajadiningrat said in a statement.
Surna said the laws should be upheld in dealing with a small number of workers, grouped in the Indonesian Prosperous Labor Union (SBSI) who held strike and blockaded the coal processing facilities of KPC.
He called on the local community leaders to hold dialog with KPC to recover conducive investment climate in the area for the national interest.
He called on the Ministry of Manpower to be more active in resolving the strike.
He also asked the police to soon restore order so that the company could resume operation.
KPC 's workers had occupied the production facilities for weeks to pressure KPC to meet their demands for better salary.
KPC however turned down the demand, citing that the workers have received the best salary package in the country. The company also dismissed the workers' action illegal.
The company announced on Wednesday it had declared force majeure and warned that it might be necessary soon to cease all operations at its Sangatta coal mine.
Legislator Priyo Budi Santoso of the Commission VIII which among others oversees mines and energy also voiced concerns about KPC's force majeure decision.
He said the decision had tarnished the country's investment climate and undermined the government's efforts to lure investors.
"The force majeure declaration shows that Indonesia is no longer a investment paradise but a investment hell," Priyo told Petromindo.Com .
Priyo called on KPC to continue dialog with its striking workers to reach a solution. The government should also be proactive in helping resolve the problem.
Priyo said the KPC case should be taken as a warning for the administration of President Abdurrahman Wahid to concentrate on improving legal certainties and security to protect the existing investors and lure new investors.
"It's time for the President to concentrate on this things rather than making confusing statements," Priyo said.
KPC is a joint venture of Anglo Australian mining giant Rio Tinto and Anglo-American energy company BP Amoco. It now produces 15 million tons per year with customers in many countries in Asia, Europe and Middle East. (*)