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    Southeast Asia
     Nov 2, 2011


Page 1 of 2
Freeport strike mines a political jungle
By John McBeth

JAKARTA - He is a mechanic with a single name and a mysterious past, but the man called Sudiro is almost single-handedly leading the eight-week-long strike that has played havoc with the operations of the world's richest copper and gold mine in the central highlands of Papua, Indonesia.

When he was elected chairman of the Freeport Trade Union of Chemical, Energy and Mine Workers - a chapter of the nationwide All-Indonesia Workers Union (SPSI) - in October last year, Sudiro signaled from the beginning that things would be different for the mine's workers.

To the chagrin of Freeport Indonesia, a subsidiary of the Phoenix-based mining giant Freeport McMoRan Copper & Gold, he has

 
been true to his word. Suddenly, labor has became as much a part of the company's problems as perennial environmental and community issues and the renewal of its contract of work (COW) in 2021.

During previous union negotiations going back to 1977, everything had gone smoothly; for a lot of that time SPSI was the only union sanctioned by former president Suharto's New Order regime - and therefore was a docile one at that.

In July, spurred by record-high prices for copper and gold on the world market, Sudiro stunned management by demanding a huge increase in hourly rates for non-staff mine workers - from US$2.10 to $3.50 per hour to a whopping $17 to $43; he has since reduced the bottom end of the scale to $7.50.

Soaring profits have led to similar work stoppages at mines in Peru and Chile, where the demands for higher wages have not been quite so outlandish but seem to represent a game-changing trend all the same.

Freeport was initially convinced Sudiro could mobilize only several hundred workers. In the end, it turned out to be 8,000 - the majority of the company's workforce - leaving only a skeleton operational staff of 1,300 and 5,000 contractors to run the big Grasberg mine.

Production fell by between 30% and 50% a day when the strike began in September, but with the recent cutting of the 112-kilometer pipe carrying concentrate from the mill to the port, the company is now only stockpiling ore and clearing away over-burden while it waits for government mediators to work out a compromise.

Armed allies
Sudiro is not without powerful friends. His late father was a navy officer and reportedly close to legendary special forces commander Lieutenant General Sarwo Edhie, father of First Lady Kristiani Yudhoyono, who is credited with crushing the Indonesian Communist Party in the mid-1960s.

The friendship has continued into the current generation. When Sarwo Edhie's son, army chief of staff and career special forces officer General Pramono Edhie Wibowo, visited Timika in early September he spent time with Sudiro in what was described as a private family meeting.

The common thread appears to be taekwondo. Sarwo Edhie was founder and president of Taekwondo Indonesia between 1984 and 1988. Sudiro is a taekwondo specialist who is reputed to have once trained Indonesian special forces (Kopassus) commandos at their Jakarta headquarters.

Much of his past, however, remains a mystery. He was born in East Java and joined Freeport as a mechanic about a decade ago. Few people had ever heard of him, including provincial and national SPSI officials, when he was elected to head the union branch last year.

He has turned out to be a charismatic orator with a remarkable ability to win even the Papuan workers to his side. A Muslim, he has been known to invoke the name of Jesus Christ to mobilize the mostly Christian tribesmen who make up 30% of Freeport's workforce.

Sudiro was among six workers fired from Freeport last June, several weeks before the first eight-day strike staged in July. They are alleged to have failed to report for work for three months, but Sudiro says they were busy preparing for the twice yearly collective labor agreement negotiation.

Freeport's workers earn an average of $18,000 a year and are among the highest paid in the country, with free medical care and accommodation. Under the new package, which includes metal bonuses tied to world prices and a new savings plan, that will rise to about $23,000 per year.


Freeport mine.

But Sudiro is aiming much higher. In July, he complained that while Freeport Indonesia has the lowest production costs of all the company's global operations, the mine's workers are paid even less than their colleagues in Mongolia and the Democratic Republic of Congo.

He also accused the company of treating the employees as "an instrument" and said that far from the strike being simply about wages and benefits, it was also about recognizing the union and its right to freely organize.

Although his bodyguards appear to be off-duty soldiers, not much can be read into Sudiro's military affiliations because there is no evidence he is receiving outside support for his union activities or that powerful Jakarta interests are somehow involved.

But when something can't be explained in Indonesia, conspiracy theories abound - particularly when there have been eight mysterious killings in the past six months, all apparently unrelated to the strike and all in areas supposedly free of separatist activity.


Freeport facilities.

The Free Papua Movement (OPM) was blamed for a series of sniper incidents between July 2009 and mid-2010, which claimed three lives. But all took place on precipitous sections of the road after it leaves the flatlands and begins the long climb through the mountains.

Last April, in a sinister new development, two senior Freeport security men were run off the eastern levee road and executed with gunshots to the head, their bodies left in the burned-out remains of their land cruiser. Only authorized vehicles are permitted in the area where the shooting took place.

The cell-phone of one of the victims came to life a fortnight later and was reportedly traced to a soldier, but local police and civilian officials have never given a full account of the incident and nothing has come of the investigation.

In the second ambush on October 14, gunmen opened fire from the side of the road near the same spot, brutally killing three more workers - one of whom had his throat cut - and burning their vehicle. Although it was never reported, a fourth worker escaped.

A week later, a Freeport worker was killed and two policemen wounded in a pre-dawn attack on the lowland section of the road leading to the mine. Tracker dogs lost the assailants as they escaped though a panning camp, shooting dead two men on the way.

Military vs police
All this is being played out against the backdrop of a long-simmering rivalry between the police and army, which gained momentum in 2000 when the police separated from the armed forces and, in doing so, took over many of the military's shady money-making ventures.

Three years later, as part of that transition, the police assumed responsibility for internal security at the Freeport mine, a controversial arrangement under which the company last year paid the paramilitary Police Mobil Brigade $14 million in security-related allowances, food and other in-kind necessities.

Far from being done secretly, the payments have always been part of Freeport's filings to the US Securities and Exchange Commission from the time the army was put in charge of guarding what the government considers a national asset in 1997.

Failure to report them would have made Freeport liable to charges under the Foreign Corrupt Practices Act. The company also spent $28 million last year on its own unarmed security force, up from $22 million in 2009.

Coincidental or not, 2003-2004 marked the first appearance of itinerant gold panners in the river carrying the mine's waste, or tailings, from the company's mill to a lowland deposition area that has been used since the Grasberg mine was opened in 1991. 

Continued 1 2  


Freeport loses Midas touch in Indonesia
(Oct 27, '11)

China's copper deal back in the melt
(Jun 12, '09)

 

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