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Freeport fires striking workers at Grasberg mine in Indonesia

10 May, 2017Mining operator PT Freeport Indonesia is laying off workers taking strike action at the Grasberg mine.

On 1 May, more than ten thousand mineworkers who are members of IndustriALL Global Union affiliate the Chemical, Energy and Mines Workers Union (CEMWU) embarked on 30 days of strike action in protest at the company’s furlough policy.

Contractors joined the strike on 9 May.

The company declared the strike illegal, and announced that striking workers would be considered absent without leave. Any worker absent for five days would lose their job.

So far, 178 workers have been terminated, with another 44 scheduled for this week, and a further 83 later. The company has stated that because the mine has national strategic importance, all protests are banned, and striking workers are not allowed on company premises.

The union followed due process in initiating strike action, but there has been no legal judgment on the legality of the strike. It is illegal to fire workers for striking in Indonesia.

The roots of the dispute lie in a conflict between the company and the Indonesian government. Grasberg is a huge open cast copper and gold mine – visible from space - in the mountains of Papua, Indonesia, employing 32,000 workers. It has the second largest copper deposits in the world, and has been operated by PT Freeport Indonesia, the local subsidiary of Phoenix, USA-based Freeport-McMoRan, since 1967.

Freeport is in conflict with the Indonesian government over the long-term future of the mine. The mine has been controversial for some time, due to environmental damage, the aspirations of the Papua separatist movement, the perception that the local community does not benefit, and alleged corruption. There are calls within Indonesia for the mine to be nationalized.

Responding to this political mood, the Indonesian government blocked copper exports and threw Freeport’s contract into doubt. The company responded by reducing production and withholding investment. Freeport’s export permit was recently reinstated after a visit by US Vice President Mike Pence. Billionaire Trump donor Carl Icahn is a major investor.

To save costs, Freeport introduced a furlough policy, putting workers on long-term leave at short notice. Although the furlough is paid, workers lose out on many benefits, including overtime and accommodation. Workers were evicted from company barracks on two days’ notice.

Workers fear that the furlough is a precursor to lay offs, and that they will not get their jobs back.

Under an agreement with the company, there is a Special Arbitration Panel to resolve disputes. However, the furlough was introduced unilaterally, with no consultation with the unions, and workers were arbitrarily selected for furlough. The company has also reduced the work of contractors. The situation has caused a huge amount of uncertainty for workers and their families.

CEMWU has urged both the government and company to resolve their conflict, and has encouraged the government to provide a clear, legal framework so that the company can invest for the long term. CEMWU has written to the company three times asking for negotiations around the cost cutting exercise, and to the government asking for intervention.

The CEMWU at Freeport said:

"The iconic Grasberg mine is the largest gold mine in the world, and the lowest production cost mine operation. Tragically the true owners of the land, Freeport’s Indonesian workers, have struggled and died fighting for their rights in their own land against a foreign company.

IndustriALL has written to both the company and the government on more than one occasion. In a letter sent to Freeport-McMoRan on 5 May, general secretary Valter Sanches called on the company to intervene and ensure that its local subsidiary deal fairly with the workers.

Valter Sanches said:

“The situation at Grasberg is a complicated one involving the unions, the company and the government. It can only be resolved through dialogue and negotiation. Freeport’s decision to terminate striking workers is reprehensible, and makes the situation worse.

“We call on the company to negotiate with the union, and also to work with the government to find a fair solution.”