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Workers strike for one day at Jakarta port

Source
Wall Street Journal - May 30, 2000

Jeremy Wagstaff, Jakarta – Hundreds of Indonesian workers went on strike at Jakarta's main port, the first serious stoppage to hit the country's largest container terminal since Hong Kong-based Hutchison Whampoa Ltd. took over its management a year ago.

The eight-hour action at Tanjung Priok is the latest in a series of strikes by an increasingly vocal Indonesian labor movement, newly unshackled after years of authoritarian rule. In many cases – such as a recent walkout at Sony Corp.'s Indonesian plant – strikers are airing traditional labor concerns, demanding better working conditions and pay increases.

But in other cases, the strikes reflect more complex grievances: At Tanjung Priok, for example, strikers are demanding that state-run port operator PT Pelabuhan Indonesia II take back the 51% stake it sold to a Hutchison unit in March 1999. Workers claim the sale was illegal under Indonesian law. But a person close to Hutchison contends that Indonesian managers who corruptly benefited from past arrangements are trying to scuttle the company's efforts to run the port more professionally.

The stakes are high for both sides. Hutchison's deal allows its PT Jakarta International Container Terminal unit to manage two container terminals for 20 years, the first plank in Hutchison's strategy to turn Tanjung Priok into one of Southeast Asia's largest ports. That plan includes doubling the port's existing capacity and bidding for a 48% equity stake in PT Humpuss Terminal Petikemas, which operates an adjacent container terminal. Hutchison wouldn't confirm union claims the strike had caused two billion rupiah ($235,000) of damage. "Of course it's done a lot of damage," a person close to the company conceded.

Denting confidence

The strike may further dent investor confidence in the government's efforts to privatize state-run companies, or to sell off debt-ridden companies under the charge of the Indonesian Bank Restructuring Agency, or IBRA. Foreign stock-market investors have shown scant interest in the government's initial public offering of Bank Central Asia, partly because of growing political jitters about the country, which continues to be shaken by regional, religious and ethnic unrest.

Bomb blasts Sunday and Monday in the Sumatran city of Medan frightened investors into selling on the Jakarta Stock Exchange Monday, driving the composite index down 4.3%, or 20.68 points, to 461.39. Potential direct investors have also been lukewarm, in part, because of Standard Chartered Bank PLC's experience in the country last year. The British bank's attempted purchase of PT Bank Bali was aborted after strong worker protests.

The lack of investors is undermining Jakarta's efforts to raise 6.5 trillion rupiah this fiscal year to help finance the state budget.

State Enterprises and Investment Minister Rozy Munir said Monday that the government is considering selling some of its shares in the country's two leading telecommunications companies, PT Telekomunikasi Indonesia and PT Indonesia Satellite Corp., if it fails in its planned sale of eight state-owned companies. Those eight are: coal miner PT Bukit Asam, plantation companies PT Perkebunan Nusantara III and IV, fertilizer producer PT Pupuk Kaltim, pharmaceutical manufacturers PT Indo Farma and PT Kimia Farma, gold and nickel miner PT Aneka Tambang, and airport operator PT Angkasa Pusa II.

Hutchison faced problems even before Monday's strike. Serious rifts have emerged between the management team Hutchison brought in and local staff. Many of the Indonesian workers, including many senior managers, have been actively organizing since the port was taken over.

The strike leader, senior manager Abdul Razak, said earlier this month that workers didn't plan to strike because "we don't want to disrupt the port." Mr. Razak wasn't available to comment Monday.

Caught off guard

A person close to Hutchison said the company had been taken by surprise by Monday's strike. "They had been holding talks with the union, but were only informed of this strike at 7am this morning" just before the strike began, he said. Workers said they chose to stage the strike because it coincided with an invitation to appear before parliamentarians to discuss their grievances. "Coincidentally, the time is correct for us to demand other points," said Irma Suryani Chaniago, a staff member and secretary of the Communication Forum for the Labor Union.

Among their demands: the payment of bonuses workers said they are entitled to, and the removal of a clause in the original purchase agreement that, workers said, allowed for the dismissal of 20% of the work force. The person close to Hutchison said no such bonus or layoff plan existed, adding that the union was "trying to frighten workers." The strikers, who form about two-thirds of the container port's work force, returned to work by 3pm Monday. Ms. Chaniago said workers would strike again on or around June 5 if their demands aren't met by then.

[Special correspondent Rin Hindryati and Edhi Pranasidhi of Dow Jones Newswires contributed to this article.]

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