Union leader helps settle KPC-worker dispute

Chairman of the Indonesian Prosperous Labor Union (SBSI) Mochtar Pakpahan has arrived in Sangatta, East Kalimantan, the operating base of coal mining giant PT Kaltim Prima Coal (KPC), as the workers of the company continued their strike for the tenth consecutive day on Monday.

Kaltim Post daily the union leader was believed to come with the intention of helping settle the dispute.

Sources said Pakpahan had tried to get permission from the local police to enter KPC's mining site.

The protesting workers are all SBSI members.

Meanwhile, the paper said, there were no signs that the strike would end soon as the workers, who earlier asked for a 15 percent salary hike, have made an additional demand that the company distribute shares to the workers.

The workers and the company continued negotiations in a closed room.

In Jakarta, director general of mining at the Ministry of Mines and Energy Surna Tjahja Djajadiningrat said on Monday he would send a letter to the national police chief Lt. Gen. Rusdihardjo, calling for the police's tougher actions against the protesters.

He was quoted by The Jakarta Post as saying that the police should not be hesitant to take tougher actions against any protestors who prevented KPC from continuing operations.

The protesting workers have reportedly taken control of KPC's main production facilities, forcing the company to halt production.

Meanwhile, coal director at the Ministry of Mines and Energy Suyartono said in Jakarta the government was studying KPC's request for approval to declare itself under force majeure.

KPC's spokesman Bambang Susanto said the company has planned to ask the approval to free itself from the obligation to its buyers.

"We are likely to give the approval, if the request is reasonable," Suyartono was quoted by Neraca daily as saying.

Suyartono said the government would only approve KPC's intention to declare itself under a force majeure if the company had no longer any chances to settle its dispute with the workers.

He noted however force majeure declaration could undermine the country's investment climate and discourage investors from coming to Indonesia.

Meanwhile, KPC's plan to declare itself under force majeure has drawn criticism from analysts, Bisnis Indonesia said.

Rachmat Wiriosudarmo said situation at KPC was now not so bad that KPC's plan to declare itself under force majeure could be justified.

"The case can be made simple. After all, this is only a strike. There is no need (for KPC) to declare itself under force majeure. Just stop the operation temporarily, " Rachmat said.

Anglo-Australian mining company Rio Tinto and Anglo-American energy firm BP Amoco equally owns KPC. (*)