Hundreds of paramilitary police have been sent to Indonesia's Papua province after 9,000 mining workers started a month-long strike for higher wages. They're employed at the US owned Freeport McMoran copper and gold mine.
Analyst Dr Chris Ballard says the mine has been plagued with problems because of interference from the Indonesian government and massive wage disparities between locals and foreign executives.
Presenter: Claudette Werden
Speaker: Dr Chris Ballard, ANU College of Asia and the Pacific
Ballard: These are nowhere more obvious than in the large scale resource industries, mining and petroleum and gas in particular where you have very very high paid executives and technical officers who fly around the world on extremely high salaries and then local workforces paid at local wage levels which are extremely low. The real problem at Freeport is that it's been running since the 1960's and it has failed spectacularly to really train a local workforce to assume those technical roles and in fact to assume technical roles. There have been a few high profile hirings of Papuans, of indigenous Papuans to senior executive positions but these are not people that the company has cultivated over the last 45 years and grown itself as it were. Think back to the 1960's which was the time when the Australian mine in Bougainville Panguna was operating and starting up at the same time and they deliberately adopted a policy of hiring and training locally both in Bougainville and across Papua New Guinea, with the result that senior positions in the government and in the mining industry throughout Papua New Guinea and beyond are filled with those trainees, well Freeport failed to do that and really didn't begin a serious training operation until the 1990's, 30 odd years after it had started and I think what we're seeing now is the result of this long term failure.
Werden: And how reasonable is their claim for higher wages?
Ballard: I would have to say entirely reasonable, I think the artificially depressed salaries in eastern Indonesia and in Papua in particular simply can't bee sustained when you're operating in an industry that generates in the case of Freeport, billions of dollars of wealth, the estimates even in the late 1990's were of a further 50-billion dollars worth of unexcavated ore and that was after 30 years of mining. So this is an industry that generates massive wealth for a few individuals, for shareholders and for an American corporation and some of its Indonesian partners. I think in terms of training and wages and wage opportunities, there's an awful lot more than can be done for local communities.
Werden: Well their current wage is $3.50 and what they're asking for is up to $43.00 an hour, obviously there is room to negotiate, what do you think will happen?
Ballard: I think there's considerable room to negotiate there, I don't think they'll end up with $43.00 an hour but I would be surprised if they don't manage to negotiate some kind of wage increase. That said I think the remaining history of that mine is going to be one of continuing strikes and forms of protest because the basic conditions and the nature of the contract as it were between Freeport, Jakarta and the local community is fundamentally unequal.
Werden: How do you redress that?
Ballard: Well there have been attempts to redress that in the past, attempts to broker honest negotiations, particularly between Freeport and the community but they tend to founder particularly around the government in Jakarta which regards any kind of direct negotiation with Papuans particularly on the part of an outside company like US owned Freeport, as a threat to sovereignty, particularly post East Timor, Jakarta's profoundly sensitive about any kind of foreign activity in Papua and tends to portray any unrest in Papua as the work of foreign agitators, so Freeport has to toe a fairly tricky line there, the problem is whenever they've been pushed to make a choice, they tend to flit onto the side of Jakarta and the security forces.