While there have been few details to emerge regarding negotiations, it has been reported that a deal was reached that would soon send the Freeport workers back to work. It is important to note that company has yet to negotiate pay and benefits with the union, but has agreed to re-open negotiations on July 20th.
This from the BBC:
Indonesian unions have reached a deal with bosses of US-owned firm Freeport to end a strike at one of the world’s biggest copper mines, reports say. Thousands of workers, who are paid on average $1.50 (£0.94) an hour, walked out a week ago demanding better wages.
Unions say the strike paralysed operations at Papua province’s Grasberg facility, where gold is also mined. The firm had played down the impact of the strike, saying it had stockpiled enough material to fulfil its orders.
Union negotiators said their workers would return to the mine on Wednesday. “We agreed because the management have agreed to all of the union’s demands,” union official Virgo Solossa told Reuters.
Sinta Sirait, vice-president of the firm’s Indonesian arm, told the Associated Press that the strike would end on Wednesday, and that Freeport and the union would open talks for a new contract on 20 July.
“When I left the situation was like an abandoned war zone,” said the mechanic, who said he was in the last batch of about 2,000 workers to leave the open pit mine. “It was dead quiet, no operations, no cars, were moving… All engines were shut down, operation tools and the power have all been turned off,” he said (Reuters)
Demo Karyawan Freeport Foto: Koran SI (Okezone)
The strike by workers at the Freeport’s Grasberg mine in Papua has continued into its third day. On Tuesday thousands of workers marched 60 kilometers from Tembagapura to Timika, and Wednesday saw thousands of workers protesting outside company headquarters and another 300 workers blocking a main route to the mine. Throughout, Freeport has been quick to assure the public that shipments will not be disrupted and at least one anonymous “non-striking” Freeport employee has claimed the size of the strike has been “exaggerated.” Yet, workers’ claims that production at the Grasberg mine has stopped appears to have been confirmed by a local government official. This, from Reuters:
“The production has completely stopped,” said Dionisius Mameyau, the head of the government’s local manpower office. “Freeport management admitted this in a meeting with the Freeport Indonesia union, which still hasn’t resulted in any deal.”
The strike is also raising concerns in the business press about its potential effect on the global copper supply chain. Again, from Reuters:
Three of the world’s biggest copper mines face strike-related disruptions this week, early signs of a possible resurgence in labor unrest that could strain an already fragile supply pipeline. In Indonesia, a strike for higher pay has paralyzed output at Freeport McMoRan Copper & Gold’s (FCX.N) giant Grasberg mine, workers said on Wednesday. In Chile, some workers at state-owned Codelco are planning a one-day walk-out, while unions in Peru called off a two-day strike at the last moment. Coupled with diminishing output at older mines and a severe cold snap that has curtailed production at other mines in Chile, which produces a third of the world’s copper, news of growing dissent is helping propel prices back toward the record above $10,000 a tonne hit in February.
There has been more coverage of the strike by workers at Freeport’s Grasberg mine in Papua, though I have yet to see any new developments reported. The article in The Jakarta Globe offered some of the most interesting details that were left out of other articles, including the fact that there is a split between the Freeport chapter of Serikat Pekerja Seluruh Indonesia (SPSI) and the province level leadership of SPSI, that the indigenous organization Tongoi Papua is remaining neutral in the dispute, and that six members of the union leadership were arbitrarily dismissed by management last month. Naturally, the article is unable to go into great detail regarding any of these particular issues.
If you are looking for more coverage of the strike at the Grasberg mine, below are links to more articles and I will continue to post links to articles in the Working Indonesia twitter feed.
There have been a number of articles recently, such as this one in The Wall Street Journal, discussing what lessons Indonesia’s transition to democracy offers when considering Egypt’s potential transition from an authoritarian regime to a democracy. One may consider Indonesia an equally interesting comparison regarding the role of and outcomes for the labor movement in Egypt’s potential democratic transition. In particular, what does the survival of Indonesia’s New Order-backed labor federation suggest about the future role of Egypt’s state-sponsored Egyptian Trade Union Federation (ETUF). I raise this possibility as it has been reported today that over 500 workers and activists demonstrated outside the offices of the regime-backed ETUF calling for the federation’s dissolution, protests which led to physical confrontation as the protesters attempted unsuccessfully to storm and occupy the offices (photo below).
Now, before I go any further, I should point out that I *do not know enough* about the Egyptian labor movement to know how apt this comparison is. However, what happens to the Egyptian Trade Union Federation going forward will provide an interesting new case study on the role of regime-backed labor union in new democracies.
Political scientist Teri Caraway published a paper in 2008 examining how one explains the continued survival and, often, dominance of authoritarian regime sponsored labor unions in newly democratic contexts, using Indonesia’s New Order-backed Serikat Perkja Seluruh Indonesia (SPSI) as her main case study. In the case of Indonesia, SPSI has survived and remains one of the major labor federations in Indonesia. Caraway finds that SPSI has managed to maintain its position, despite initiating only limited internal reforms to make the union more democratic, largely due to contextual factors, such as institutional advantages inherited from the old regime, partisan links, organizationally weak competition, and a weak national economy. She argues that legacy unions will tend to rely on these institutional advantages to maintain their organizational dominance, only undergoing as much democratic reforms as a given context requires.
How do Caraway’s finding match up with the Egyptian case? That is for someone who knows the Egypt context well to examine. What is certain is how important the transition period is to the future of any labor movement in an emerging democracy, as Caraway explains below:
Legacy unions are a profoundly enduring aspect of nondemocratic regimes, and this article shows that competition is not enough to break their lock on power. Their dominant position in many new democracies provides part of the explanation for why labor movements are so weak. By crowding out new organizing and holding members captive, they limit the promise that democratization holds for unions to vigorously pursue improved working conditions and worker welfare. The continued dominance of legacy unions—in the absence of internal reform—thus has important normative and political consequences (p1393)
As was mentioned previously on this blog, it is regional minimum wage setting season. If news reports are any indication, its hard to see the process as well ordered.
In Banyuwangi, East Java, the labor and business representatives have been unable to come to an agreement on a regional minimum wage to suggest to the East Java Governor. Instead, they will each be sending their own suggestions. Yet, what is notable here is just how close their numbers are. Business representatives are suggesting Rp 865,000/month, while labor is suggesting Rp 868,000/month. That’s a difference of 0.34% or about 4 dollars over an entire year.
At the other end of the spectrum, there were SPSI demonstrations in Sidoarjo, East Java last week calling for a minimum wage of Rp 2,000,000 per month, which is nearly double Sidarjo’s current minimum wage of Rp 1,000,500. The leader of the demo promised more street actions, but they are clearly at a very different stage in the negotiating process.
Because Indonesia’s minimum wage is annually adjusted by tripartite boards on the regional level, it is a big news generator. In every region, every year, there are various parties involved in the process of setting the minimum wage. So, as we are about to hit minimum wage season, this blog won’t attempt to cover each and every minimum wage news item, but will try to pick out interesting points as they arise.
The Jakarta Globe recently ran an article on Jakarta’s minimum wage negotiations, with the administration projecting a 5% – 10% increase, while unions have been pushing for 25% based on the Reasonable Cost of Living Index. While the increase is still being negotiated and won’t be announced until the end of the month, according to the article “the minimum wage will also apply to contract or outsourced workers, who were previously not eligible for the minimum wage.” This would seem to be a significant development, regardless of the final minimum wage increase. However, one might assume that this is all still up for negotiation.
In Klaten, Central Java, union officials from SPSI also proposed that minimum wage increases be based on the Reasonable Cost of Living Index (KHL). One interesting argument made by SPSI officials, who are represented on the tripartite wage councils, was to point out that other regions in Central Java have higher minimum wages despite having less developed economies. I have asked this question on this blog before, but one has to wonder about the effect of the regional nature of the minimum wage negotiation process? Does it create “race to the bottom” dynamics? Or does it also offer some leverage to labor, such as the argument put forward by SPSI here?