Update on Freeport's mass lay offs - dismissed laborers report Employment Minister to Ombudsman

In February 2017, PT Freeport Indonesia (PT FI) introduced a furlough program to release its workers from their obligations and return them to their point of leave. The Freeport laborers went on strike. PT FI claimed that the workers’ strikes were illegal and thus the strikers were considered to have "voluntarily resigned". In early 2017, PT FI reportedly fired around 4,200 workers participating in the strike. So far, attempts to involve human rights organisations, ministries and government institutions have not lead to a perceptible outcome for the dismissed workers.

On 28 August, hundreds of Freeport laborers gathered at HR. Rasuna Said Street in central Jakarta, in front of the PT FI head office. Security forces repeatedly tried in vain to dissolve the peaceful demonstration. The laborers continued the protest over night, sleeping in front of building (see intro image and image below). The following day eight representatives were allowed to attend a meeting with the management of PT FI. However, the meeting did not bring about any agreement on the longlasting labor rights conflict.

 Freeport Demo2Two days later, on 30 August 2018, the workers with the support of the Jakarta-based human rights organisation LOKATARU reported the Minister for Employment Hanif Dhakiri to the Ombudsman national office in Jakarta. The executive director of LOKATARU, Haris Azhar, stated in a public interview that the complaint was filed on the grounds of maladministration. He explained that the minister had not taken a neutral position in the conflict between the workers and PT FI. The Ombudsmen is an independent institution, responsible for monitoring public services.

According to Haris Azhar, the workers repeatedly attempted to meet with Minister Dhakiri but never received a response. On 7 August 2018, Freeport workers decided to gather in front of the employment ministry for three days. Instead of meeting with the workers, members of the ministry posted a video on the social media platform ‘Instagram’ on 16 August 2018, in which they claimed that the protestors had allegedly committed criminal offences. Haris Azhar called the video a lie and a distortion of facts.

 

Background

On 26 February 2017, PT FI introduced a furlough program, which releases its workers from their obligations and returns them to their point of leave. The company claimed that the program is a response to its declining profit during ongoing tax negotiations with the Indonesian Government, although it never provided a tangible proof of its financial condition to support the claim. Approximately 12,000 permanent workers and 20,000 contract workers were laid off as a result, reducing the total number of employees by 10%, without prior notification to the employees or negotiations between the union representatives (PUK SPSI) and PT FI management. Employees who were chosen to enter furlough were not given any avenues for appeal.

Following the strikes against the program by the workers in early 2017, PT FI reportedly fired around 4,200 workers participating in the strike. PT FI forcibly evicted workers from homes and denied their access to corporate hospitals and schools. There are at least 33 cases identified where workers could not afford to pay rent and some of the workers have been evicted as a result. The termination of salary payments and the workers’ other rights also negatively impacted the right to education of the workers’ families. There are at least 33 reports involving expulsions and threats of expulsion of the workers’ relatives from schools and universities.

On 24 May 2017, these workers’ memberships to the Government Health Insurance BPJS were discontinued by PT FI. This contradicts Article 21 (1) of Act No. 40 of 2004 on National Social Security System which provides that the health insurance memberships shall remain valid for at least six months after the termination of work. The union representatives reported that at least 15 workers died because they were denied medical care at Freeport-owned hospitals. There are at least four other cases where the denial of access to the health insurance coverage affected the employees’ family members during medical treatment, including the death of a new born child.

The National Social Security Council, responsible for the external oversight of BPJS, requested the Director of BPJS that the workers’ memberships to the health insurance be reactivated by no later than 30 September 2017. However, the request was left unaddressed and the workers’ health insurance remain disabled. Former workers reported that PT FI also gave the names of the laid-off workers to local banks, making it difficult for them to access credit. Several banks blocked access to Freeport workers, including Bank Papua, Bank Niaga, BRI BNI and Bank Mandiri. PT FI requested banks in Timika to block the accounts of all workers involved in the strike and the banks all agreed to this.

PT FI claimed that the workers’ strikes were illegal and thus the strikers were considered to have ‘voluntarily resigned.’ Freeport continues to deny the legality of the strikes, by firing the workers, inducing them to resign, and ending their wages and benefits. In a statement on 28 August 2017, Freeport McMoRan denied the allegations and stated that the company recognizes, respects and promotes human rights. It claimed that all actions taken by PT FI were in accordance with the Indonesian Labour Code, the applicable Collective Labour Agreement (CLA) and the 2015- 2017 Industry Guidelines (IRG).

Following its receipt of a complaint regarding the violations of labour rights, the National Human Rights Commission (Komnas HAM) conducted a series of meetings with the workers’ representative, PT FI, and the Ministry of Manpower and Transmigration. Komnas HAM concluded that there have been breaches of the workers’ rights and recommended that PT FI re-employs and compesate all the workers affected by its furlough program.