5 December, 2011
The Indonesian national government and Papua province Manpower officials will both participate in bargaining today in Timika, Papua, in further attempts to resolve the wage and benefit issues behind an 11-week strike. The strike is against US-based Freeport-McMoRan by the PT Freeport Indonesia Workers’ Union of the Chemical, Energy, Mine Workers Union (CEMWU), or SP KEP SPSI.
Meanwhile, as talks continue into the fifth straight week with little progress to report, the union this week is making plans to issue another official notice to extend the strike a fourth time, again a 30-day extension that will continue the stoppage from 15 December to 15 January 2012. Some 10,000 mineworkers have blocked all production from Freeport-McMoRan’s Grasberg mines, the world’s largest recoverable gold and copper deposits, since the first 30-day strike began on 15 September.
In a report on bargaining to the ICEM late last week, leaders of PT Freeport Workers’ Union said management has not moved off an average 35% wage offer over two years. (See previous ICEM report.)
The union is seeking uniform wage increases for all workers, with a goal of US$7.50 per hour for non-staff workers in the second year. Workers earned a wage of between US$2.13 per hour and US$3.54 at the start of the strike.
The union is seeking a fixed metal bonus scheme, while the PT Freeport Indonesia (PTFI) subsidiary is insisting on a bonus tied to the company’s variable costs. The company has rejected the union’s demand for monthly Housing, Education, and Risk Allowance Work benefits of two million rupiah each (€165, US$222) and a daily premium for shift work of 100,000 rupiah (€8.26, US$11). The union met with Indonesia’s National Wage Council on Friday over the company’s effort to impose a wage deal through the government’s mediation process.
The ICEM believes Freeport-McMoRan must do better in its wage and benefits offer to Grasberg miners, many of whom work 12-hour shifts in 4,200- metre altitudes and have an excruciating roster schedule in which they work five days on, two days off, followed by six days on and one day off, and then four days on, three days off.
But if the company wants a return to production and an end to Indonesia’s longest work stoppage, it must break from pressures being exerted by other extractive industry employers to hold down wage and benefit offers so their workers do not follow the example set by the PT Freeport Workers’ Union. Again, PTFI must make a more conciliatory contract offer and the company should take note on how Newmont Mining and Sumitoma Corp. two weeks ago ended a four-day strike at their 49% copper and gold holdings called Batu Hijau on Indonesia’s Sumbawa Island. They acceded to workers’ demands for adequate compensation on overtime work.