Freeport tightens belt during crisis despite protests

Freeport tightens belt during crisis despite protests

The Jakarta
Markus Makur

PT Freeport Indonesia (FI), a gold and copper mining company operating in Mimika regency, Papua, is cutting costs despite a workers union protest in response to the global economic crisis and the falling price of copper.

FI spokesman Mindo Pangaribuan told The Jakarta Post that cost-efficiency measures would include a moratorium on recruiting non-essential staff and laying off as many as 75 FI employees at the Jakarta headquarters, among other things.

"The company still has a positive outlook, given the limited global stock of copper and its constant demand. However, we have to respond fast to the reality of short-term economic uncertainty."

"The company has applied cost-saving measures in all areas of our operations which would not likely influence production targets," said Pangaribuan.

He added the workers' retrenchment program had referred to the existing labor law and that FI had coordinated the matter with the government.

Contracting companies affiliated with FI have also carried out cost-cutting measures by laying off some workers, but Pangaribuan is confident this will not have an impact on FI output.

He said FI was expected to produce 1.3 billion pounds of copper and 2.1 million ounces of gold this year.

Based on information gathered by the Post in Timika, a number of contractors have been laying off their workers since December last year.

Leader of the Papua Workers Union, Yohanis Samual Nussy, condemned the firings by FI contractors under the pretext of the global economic crisis as unfair.

Nussy told reporters that job lay-offs disguised as cost-efficiency decisions were unjust because FI and its contracting companies could economize on many other things.

He argued that level III workers who had thus far benefited from company facilities, such as cars and housing, should no longer use them as they already received big salaries and other benefits.

Another way to save costs, Nussy said, would be for FI to move its headquarters from Jakarta to Timika.

"Having our headquarters in Jakarta is a very costly option," Nussy said, adding that efficiency measures should target job facilities, job description, annual leave and overtime pay.