Wage Talks Begin Again Tuesday in Grasberg Mine Strike; ICEM Calls on Affiliates to Assist

The PT Freeport Indonesia Workers’ Union of the Chemical, Energy, Mine Workers Union (CEMWU), or SP KEP SPSI, will re-enter wage negotiations with Freeport-McMoRan’s Indonesian subsidiary tomorrow, 15 November, in hopes of narrowing a pay divide that has created a two-month strike at the world’s largest recoverable gold and copper deposits.

Last week, the union covering 10,000 miners at the American company’s Grasberg mining complex in Papua province extended the strike another month because the two sides still remain apart on wages. The ICEM responded to the extension by putting a call out to trade unions to assist the union in feeding striking families.

That call can be found in this 10 November ICEM letter; trade unions and others are encouraged to send contributions to the PT Freeport Indonesia Workers’ Union Solidarity Fund at the bank numbers listed in this letter.

The union has been feeding 10,000 workers and their families from five open-air kitchens in southern Papua province near the port city of Timika. The ICEM was informed by the branch’s parent union in Jakarta, as well as by ICEM Indonesian Affiliates’ Chairman D. Patombong Sjaiful, that food staples are running low and a Solidarity Fund is short of money. Several ICEM affiliates immediately responded to the call, and more financial assistance is needed this week.

The union and management of PT Freeport Indonesia did conduct a meeting today, 14 November, that was coordinated by the local Mimika government to discuss possible solutions. Tomorrow’s negotiations are to be bi-lateral, but Indonesia’s Manpower and Transmigration Ministry is in Timika to offer assistance. The union’s spokesman, Juli Parorrongan, said the leadership committee will meet with both managers and the national ministry representatives tomorrow.

In talks that lasted from 7-10 November, the two sides did make some progress, but not enough to settle the bitter dispute that has seen production completely halted and the company declaring force majeure at its 175,000-ton per day mining operation. Management increased its first-year wage offer to 35% from 30%, while offering 11% in 2012.

Prior to the start of the 15 September strike, Grasberg miners earned a wage of between US$2.13 per hour and US$3.54. The union last week lowered its wage proposal from US$7.50 to US$4 for the lower-paid workers in 2011-2012, and then proposed a US$3.50 wage increase on 1 October 2012.

There are also a number of other issues still in dispute, including housing loans, a savings programme, education assistance, and vacation leave. The major difference in all these issues is the company’s insistence that they be based on variable costs, whilethe union wants them set at fixed costs.

Mile 28 Blockade

The PT Freeport Indonesia Workers’ Union continues to enforce a road blockade at Mile 28 that has hampered Freeport-McMoRan’s ability to produce. A ruptured set of pipelines that carry gold and copper concentrate 114 kilometres from Grasberg to Timika is now being repaired, with the company using helicopters to ferry construction crews and materials to the damaged portions of the lines.

In late October and early November, police threatened to break the blockade with force. But that threat – which would have been met with resistance and certain bloodshed – is no longer there and there is no police presence at Mile 28. But rather, strikers and their families are forced onto reduced food rations as union funds have dried up.

The ICEM continues to advocate for the union’s wage and other demands to be met. Miners work 12-hour shifts some 4,200 metres high in the Sudirman Range and most spend another four hours each day without pay getting to and from the Grasberg site via buses. Workers of the PT Freeport Indonesia Workers’ Union also undergo an excruciating roster schedule in which they work five days on, two days off, followed by six days of work and one day off, and then four days on, three days off.

An ICEM report from last week on this important strategic strike in the mining industry can be found here.