Thiess comments on Australia Herald Sun?s story
Tuesday, September 24 2002 - 10:00 AM WIB
We refer to an article published on page 2l of The Australian Newspaper today entitled "Jakarta court grab for $55 million of Thiess assets".
This article refers to an industrial dispute that occurred one year ago at the Kideco coal mine in Indonesia at which PT Thiess Contractors (a wholly owned subsidiary of the Leighton Group) is a contractor. Thiess is not the owner of the mine as reported in the newspaper article.
The industrial dispute at the mine site involved termination payments for some 170 workers at the mine. The mount to be paid to the terminated workers is the subject of some dispute which is awaiting the decision of Indonesian courts.
The original decision by the relevant industrial court required termination payments of approximately US$70,000. This amount is not contested by Thiess and is available to the ex-employees. The US$300,000 union claim referred to in the newspaper article is disputed by Thiess.
Operations at the mine are proceeding normally and it is achieving its budgeted turnover. Thiess' assets on site, being plant and equipment valued at around $55 million (US$30 million), have not keen seized.
Thiess is confident that the dispute will be resolved by relevant Indonesia courts within the next month or two and will have no material affect on its operations.
Yours faithfully
A.J. Moir (Company Secretary)
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Court grab for $55m
Source: Herald Sun daily, Australia 24 September 2002; by Florence Chong
IN a shock move, an Indonesian court has placed an order to seize $55 million worth of assets to meet union claims against an Indonesian coal mine owned by Australian-based Thiess Contractors.
Thiess is one of Australia's largest investors in Indonesia. It is the second Australian company (after Rio Tinto) and one of many foreign companies to fall victim to Indonesia's corrupt judicial system.
The South Jakarta District Court has ordered working assets owned by Thiess at the Kidieco coal mine in East Kalimantan be auctioned to pay the union claim.
A legal team from Thiess, a Leighton Holdings subsidiary, is fighting the union bid to seize up to $US30 million ($55 million) of the company's assets to recoup $US300,000 the unions claim as "unspecified" damages.
Thiess' legal adviser in Jakarta has told The Australian the court's ruling was illegal because Thiess had not been given an opportunity to defend the case.
The damages were decided by the Indonesian Minister for Manpower, Jacob Nuwawea, in a letter to the court.
The lawyer for Thiess said the dispute began in July 2001, when about 500 workers at the mine went on an illegal strike.
Thiess obtained a ruling from an Indonesian national government body, the Labour Committee, to retrench the workers, who had rejected a number of proposals to return to work. The order was overturned by Mr Nuwawea.
Thiess successfully appealed the Minister's decision through Indonesia's Administrative Court, but that decision is now being appealed by Mr Nuwawea.
With the Minister's appeal pending, the unions launched a case for damages against Thiess with the South Jakarta District Court.
According to the company's legal counsel, the Thiess' response was that the case could not proceed in the District Court before a decision was reached by the Administrative Court.
"The South Jakarta District Court ignored this fact and gave the company no chance to defend itself," the lawyer said.
"It placed an order of attachment (to seize Thiess assets) on the company."
The court ordered trucks, tractors, bulldozers and other mining equipment be auctioned to pay for the alleged damages.
"We're shocked by the decision. Even in other highly controversial cases, normal court procedures were followed," the lawyer said. "In this case, the court made its decision unilaterally, intending to seize assets to pay for damages that don't exist."
Thiess's legal team is now seeking to overturn the order in other Indonesian courts.
It is also making submissions to various Indonesian government departments to ensure the South Jakarta District Court follows the Indonesian code of procedures in civil cases. (*)