Proud Indonesian Miners’ End Strike with Freeport-McMoRan

An agreement was signed in Jakarta today between PT Freeport Indonesia Workers’ Union (SP KEP SPSI) and management of the world’s largest gold and second largest copper mining complex – Grasberg in Papua province – that will end a 94-day strike on Saturday, 17 December. The strike pitted a low-wage but determined and enlightened workforce against a global extractive resource company, US-based Freeport-McMoRan that has Grasberg at top of its massive revenue stream.

The agreement put together in Jakarta this week, with the assistance of the Indonesian government, falls short of workers’ wage demands, but union-winning gains were made that will allow the 10,000 striking miners to return to their jobs with heads held high.

Firstly, striking miners will be paid their lost salaries during the three-month strike. Secondly, in a last minute company concession early today, disciplinary action against a number of strikers has been withdrawn and complete amnesty accorded. Further, a central issue in the dispute was resolved in favour of the union.

All allowances – health care, housing, education, shift premiums, service-year bonuses, and a metal bonus – will be calculated on fixed costs rather than Freeport-McMoRan’s demand of variable cost schemes. Grasberg miners will receive a 24% increase on their back-dated wages to 1 October 2011. In October 2012, they will receive a 13% increase.

Some 7,000 of the striking mineworkers, PT Freeport Indonesia (PTFI) employees termed non-staff workers, had earned between US$2.13 per hour and US$2.54. The 37% falls short of the union’s most recent demand to increase wages to US$4.50 per hour this year and then by US$3 per hour in 2012. But the resolve of workers and union leaders alike to bring the world’s largest recoverable gold and copper deposits to a grinding halt was a lesson of worker solidarity and unity to trade unions across the globe, and many paid special attention to the developments of this strike.

“We are not entirely happy with the wage deal,” said union bargaining committee member Juli Parorrongan. “We made the decision to settle due to humanitarian reasons and out of concern for our workers. They have no money, very little to eat, and having no pay checks have pushed them to the brink of poverty.

“But this is not the end, only the beginning. The energy and unity of our struggle now enters the workplace.” Much of that energy was concentrated in a fierce blockade by strikers and their families at Mile 28 on the lone road between Timika on the Arafura Sea and Grasberg open-cast and underground mines in the central highlands of Papua.

That pivotal blockade prevented PTFI from getting supplies in and more importantly, it severely hampered the company from making repairs on 114-kilometre slurry lines that carried Freeport-McMoRan’s daily 230,000-tonne output to Timika and global markets. Pipelines were vandalized during the early stages of the strike by people seeking to siphon off small portions of the company’s riches for sale on black markets. PTFI declared force majeure on 22 October, five weeks into the strike.

The 15-member bargaining team of PT Freeport Indonesian Workers’ Union, part of the national Chemical, Energy, Mine Workers Union (CEMWU) of SPSI, will return to Timika from Jakarta tomorrow, 15 December. On 16 December, they will hold a mass meeting with strikers to brief them on the agreement, and then hold a ceremonial end to the blockade at Mile 28.

One outstanding issue concerning the International Federation of Chemical, Energy, Mine Workers’ Unions (ICEM) is local police charges in Timika against 12 union leaders. They are under investigation for disturbing the public order in blocking the Grasberg road and access to the mine and milling operations.

In months-long involvement in this dispute, the ICEM is convinced that Indonesian labour code asserts that PT Freeport Indonesian Workers’ Union were within their legal rights to engage in strike activity at blockade points.

“The ICEM applauds the resourcefulness of Grasberg miners in carrying out this strategic strike,” stated ICEM General Secretary Manfred Warda, “and it is now in the best interests of both the company and workers for local authorities to drop recriminations over what we know to be legitimate strike activity.”