11 October 2011

On the struggle of Freeport Indonesia's workers

Freeport workers in Indonesia vow to halt production

Agence France Presse - October 7, 2011

Workers at one of the world's largest gold and copper mine in the remote Indonesian province of Papua vowed on Friday to paralyze production, as their strike over pay enters its second month.

Workers at the Grasberg mining complex run by US giant Freeport-McMoran began a month long strike on September 15, demanding at least an eight-fold increase in the current minimum wage of $1.50 an hour.

"If we don't get the pay increase we want, our goal is to stop production by November 15," said Virgo Solossa, spokesman for the workers' union, which extended the strike by a month on Thursday.

"Freeport has tried to intimidate us to go back to work, but we won't until they are open to a fair negotiation," he said, adding that at least 8,000 of the company's 23,000 workers would remain on strike.

The Arizona-based company said it was "disappointed" by the union's decision, "which has no basis under Indonesian law." It added that some workers were gradually returning to work, "allowing the company to scale up mine production, milling production and concentrate sales."

Production at Grasberg, one of the world's largest sources of gold and copper, has suffered considerably since the strike. Production in the first week of the strike last month was slashed by 230,000 tons a day, representing daily losses of $6.7 million in government revenue.

Slowing production at Grasberg, coupled with a spate of strikes at Freeport's South American mines, has raised concerns of a global copper shortage, analysts said.

Freeport's Papuan workers, who are mostly indigenous Melanesians, receive the lowest wages of any Freeport mining facility in the world, according to union workers.

The current lowest wage is $1.50 an hour, which workers want raised to $12.50, the union said. The workers want the maximum hourly rate of $3.50 to rise to $37. The union had originally demanded a minimum of $17.50 and a maximum of $43.

"We have followed all the right procedures to strike, which is our right. So we hope the company will make a fairer offer soon," Solossa, the union spokesman, said.

The company has offered a 25 percent increase on wages, which the union rejected. Freeport Indonesia is the largest single taxpayer to the Indonesian government, contributing billions of dollars a year to the state.


Papua's Freeport mine workers threaten ongoing strike action

ABC Radio Australia - October 7, 2011

Workers at the world's largest gold and copper mine in Indonesia have promised to strike indefinitely until their demands are met.

Most of the workforce at the giant Freeport McMoRan Mine have been on strike for a month which they have extended for another 30 days.

They claim the company has tried intimidation to get them back to work, and has forced contractors back to the mine. These claims are impossible to verify as the company does not comment to the media.

Reporter: Karon Snowdon

Speaker: Juli Parorrongan, spokesman for the mine workers' union, the SPSI

Snowdon: The strike over better pay and a pension plan began on September the 15th. Eight thousand workers at the Grasberg Freeport mine walked off the job and have vowed to stay on strike indefinitely.

Parorongan: So tragically, the management is not building the solution or the resolve of this problem, but they build the conflict. And they prolong the conflict. Management of... have strongly indicated they are not wanting to answer or fulfil our demands.

Snowdon: The union says wages are among the lowest in the world at just $2.10 an hour for some. It wants that raised to $17.50 an hour plus a better pension plan.

Parorongan: The lowest paid is 2.10 dollar per hour. And so, we need this to be increased to 17.50 dollars per hour.

Snowdon: That's a big increase all in one go, isn't it?

Parorongan: Ya, that's a big increase but this company also has the biggest revenues, and so we're... our Indonesian salary is very very low, especially for the Freeport McMoran group. You can compare wtihin your country.

Snowdon: Juli Parorongan says its the first time the entire union workforce at Freeport has gone on strike. He accuses the company of using intimidation to force contractors back to work. Freeport management says it started negotiations last month for a new labour agreement in good faith and there's no legal basis for the strike. In a written statement Chairman James Moffett says he's committed to getting a fair agreement.

Moffett: In 2010, the contribution from Grasberg to the Government of Indonesia and the local community totalled more than $3.8 billion. We are committed to maintaining an attractive work environment for our employees and look forward to concluding the negotiations on a mutually agreed basis as soon as possible."

Snowdon: The company says the strike is costing 3 million pounds of copper and 5 thousand ounces of gold a day in lost production. It won't meet its forecast third quarter sales of over 900 million pounds of copper and over 400 thousand ounces of gold. Union spokesman Juli Parorongan says the Indonesian government needs to get involved and pressure the company, PT Freeport Indonesia or PTFI.

Parorongan: Because the PTFI management have already have out of laws.

Snowdon: Are you saying the management has broken the law?

Parorongan: Ya, that's right. They're already broken the law, especially for their employment law in Indonesia. But it will be very good if you can come to Indonesia and so you can see for yourself.

Snowdon: The Indonesian government doesn't allow journalists to visit Papua. The strike action appears to have a long time to run.

Parorongan: We will strike for longer and longer, until we have the good deal.


Freeport strikes could just work

New Matilda - October 7, 2011

Alex Rayfield and Claudia King -- Workers at the Freeport McMoRan mine in West Papua resumed strikes on 15 September after more than six weeks of unresolved negotiation talks with company management.

Increasing numbers of international media are covering the workers' return to strikes, the first of which ended in July after eight days of work stoppage that halted production at the Grasberg mine.

However, national and international media have focused solely on worker demands for an increase in their hourly pay rate -- ignoring the history of Freeport's unfair and even illegal treatment of the mine's so-called "non-staff" workers.

West Papuan workers receive the lowest wages ($1.50-$3.00) of any Freeport mining facility in the world, despite the fact that their work accounts for 95 per cent of the company's consolidated gold production, and a substantial percentage of Freeport's copper production. According to NASDAQ, Freeport has reaped astonishingly high profits from the low labour costs at the West Papuan site, enabling the company "margins in excess of 60 per cent in past years".

Indonesian energy minister Darwin Zahedy Saleh estimates the Indonesian government alone could lose as much as $6.7 million in tax revenues, royalties and other payments from Freeport every day the strike carried on. Leaders of the All Indonesian Workers Union (Freeport division) have said they will agree to a 25 per cent wage increase (down from demands for increases of up to $200 per hour) but Freeport management is so far refusing to lift their offer higher than 22 per cent.

However, media coverage of the strikes is missing Freeport's long history of suppressing workers' rights and union organising in Papua, not to mention the historical context and legacy of poor industrial relations out of which these strikes have emerged.

For one, Freeport McMoRan's contract of work with the Indonesian government was signed prior to a scheduled referendum on West Papua's political status. The UN had granted Indonesian temporary control over the region in 1963 but by the time the "Act of Free Choice" of 1969 was ready to proceed, only 1,022 West Papuans -- less than 0.01 per cent of the population at the time -- participated. In reality there was no referendum and no vote. Papuans were told by Indonesian military generals to vote for Indonesian rule or have "their tongues cut out". Unsurprisingly, in this atmosphere of intimidation, 100 per cent choose to support West Papua's incorporation.

But Freeport McMoRan, subsidiary PT Freeport Indonesia, did not even wait for this farce. The US Company made a deal with the Indonesian dictator Suharto, who was waging military operations in West Papua at the time. Freeport signed their first contract of work in 1967, two years before the 1969 Act of Free Choice. Under Suharto an authoritarian management style became entrenched. Dissent by workers and the local Papuan landowners were repressed harshly by the military.

Secondly, Indigenous West Papuans' cultural, and economic livelihoods, which are dependent on a healthy natural environment, have been disrupted by Freeport's arrival. It is no wonder that local communities resisted both violently and nonviolently to the company's takeover of large swaths of their territory. In fact, Papuan resistance to Freeport has always been connected to Papuan resistance to Indonesia's repressive "neocolonial" rule, which has now lasted over 50 years and according to Amnesty International resulted in the deaths of over 100,000 people.

Alongside West Papua's pro-independence movement are workers, both native Papuans and Indonesian migrants, organising for fair pay, basic rights to organise without threats and intimidation from Freeport management, and the provision of equal facilities for local workers as their foreign worker counterparts, including: housing, health care, education, and pension funds.

They are demanding the freedom to organise as workers, to strike and demonstrate without threats, intimidation, or interference from Freeport management or local police, and without penalty of receiving no pay or the risk of losing their jobs. Freeport has now engaged global security contractors Securicor (now G4S), to break the strike.

Union leaders are maintaining vigilant documentation of violations by the various security apparatus. Since resuming the strike, workers have received messages from officials via SMS, and visits to their family homes by Freeport staff and security who threaten to withhold pay and fire striking workers. Barracks near the mine's entrance in Tembagapura were raided by officials, some whom were allegedly foreign nationals, who according to workers ordered miners to sign an agreement to end the strike.

The most disturbing incident was the attempted shooting of Union Chairman Sudiro while in his home on September 11, 2011 by "persons unknown", a phrase in Indonesia that is often shorthand for the Indonesian military.

In a significant escalation of resistance, leaders of the Amungme and Kamoro tribes -- the two customary landowner groups who own the land Freeport is mining -- are supporting the striking workers. Senior tribal
leaders Anis Natkime, Canisius Amareyau, Viktor Beanal and youth leaders Jecky Amisim and Donny Emayauta have written to Freeport CEO James Moffett and Freeport President Richard Adkerson to ask the company to agree to worker's demands.

Failing this the tribal leaders threaten to close Freeport's entire operations from the Amungme highlands of the 4,200 metre high Grasberg mine down to the Kamoro lowland port of Amapare. In doing so, these leaders are throwing off decades of fear and trauma brought about by repressive Indonesian military operations in support of Freeport. Abuses include the forced removal of villages and massacres by Indonesian military and police personnel who have never been held to account.

Although Indigenous communities living in and around the site of the Grasberg mine are supposed to receive a percentage of the profits from mining extraction as a part of an agreement known as the "1 per cent fund" community leaders claim the funds, which are routed through Jakarta, never reach the local community. The fund has also created conflict and competition between tribes.

While there is no guarantee that workers and community leaders will achieve their goals or address long-standing grievances, the worker strikes have caught Freeport and the government off guard, and awoken them to the reality that they are no longer uncontested power-holders in the region. Instead they will be forced to shift their practices one way or another, or else face serious economic and reputational losses.

The strike also threatens to have much wider repercussions than mere pay rises. West Papuan independence leaders in other parts of the country are preparing to organise the third national gathering of Papuan resistance
groups. These leaders are watching the events at Freeport closely. When the three-day Third Papua Congress opens in Jayapura/Port Numbay on 16 October you can be sure that grievances around Freeport will be high on the agenda.

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