Amahl S. Azwar, Jakarta – Mining companies that have sacked their workers to reduce costs without prior discussion with the government would face "tough measures", Energy and Mineral Resources Minister Jero Wacik told The Jakarta Post over the phone on Sunday.
Based on his experience running the ministry for a year, Jero said that mining companies had a tendency to publicly exploit layoffs as a way to threaten the government as well as to gain public support whenever they faced problems.
"At the end of the day, the central government will be the one to blame whenever they [the firms] shed their workers."
Jero said in response to recent announcements from two mining firms, PT Agincourt Resources and PT Newmont Nusa Tenggara (NNT), who declared separately that they would be downsizing their respective workforces as part of ongoing cost-cutting measures.
Agincourt, a local subsidiary of Hong Kong-listed gold producer G-Resources Group Ltd, announced on Thursday last week that it had dismissed 300 of its workers amid the suspension of its Martabe gold mine in South Tapanuli, North Sumatra, following a waste management dispute with local residents.
Simultaneously, NNT, a subsidiary of US-based Newmont Corporation and the second-largest copper and gold producer in Indonesia, announced its plan to lay off as many as 100 of its 4,000 workers at its Batu Hijau mining site in West Nusa Tenggara to cut costs amid low production and the stagnation of mineral prices.
Jero maintained that the mining firms, especially the large ones, must first consult with the government prior to implementing their plans.
While acknowledging that the government did not have legal authority to sanction mining firms for laying off workers, Jero said that the government had "its own ways" to pressure mining firms, but declined to give further details.
"We have our own ways to take tough measures if mining firms suddenly fire their workers without consulting us first, but I cannot tell you what ways," he said. "The thing is, the significance of the mining firms was to boost job opportunities, not the other way around."
NNT president director Martiono Hadianto declined respond to the minister's remarks directly, but said that NNT had presented its plan to the government both informally and formally.
"We just want to enhance our efficiency. As for why we are conveying our plans [to the public], it is a part of our attempt to practice transparency and we are doing it carefully so it does not trigger any social turmoil," he told the Post in a text message.
Meanwhile, G-Resources president director Peter Geoffrey Albert told the Post that the firm had consulted with the administrations of North Sumatra province and South Tapanuli regency over their plans, adding that the company expected the regional administrations would discuss the matter with all related bodies.
"We advised South Tapanuli Regent [Syahrul Pasaribu] on Sept. 17 [through an official letter] that we would cease production on Sept. 19 and if after 10 days [the dispute] was not resolved, we would start sending people home.
This letter was copied to the provincial administration and the central government," he said in a text-message.
Currently, G-Resources employs 2,400 people at its Martabe gold mine site. Further layoffs are expected unless the dispute with area residents over the planned installation of a 2.7-kilometer-long liquid waste pipe to Batang Toru River in South Tapanuli, can be resolved.