P

T Freeport Indonesia says it cannot fulfill its workers’ demands for hourly wages because their offered 22 percent salary increase was the best among the mining companies operating in the country.

Company spokesman Ramdani Sirait said over the weekend that in addition to the basic salary increase, Freeport also provides its employees with many benefits including medical expenses, bonuses from gold and copper sales, education support from kindergarten to university and housing loans.

“We’re sure that the package we offer in the new work contracts between the management and workers is the best among other multinational mining companies operating in Indonesia,” he said.

With the old rate, the lowest level non-staff workers or field operators received Rp 170 million (US$18,640) in take-home pay including benefits each year, while the highest level received Rp 235 million, he said.

“If the workers accept the 22 percent basic salary increase, their yearly income will soar to between Rp 210 million and Rp 230 million for the lowest level and between Rp 285 million and Rp 310 million for the highest level,” Ramdani said.

However, he said that in the final mediation meeting on Sept. 23, the workers rejected the offer and insisted that the company pay them hourly wages from between $17.50 and $45 per hour.

The mediation team had suggested that Freeport raise the offer from a 22 percent increase to 25 percent, but no agreement or response has come from workers.

Freeport chief administrative officer Sinta Sirait said the company had agreed to follow the team’s suggestion to end the ongoing dispute with workers, adding that the company did not want the dispute to be solved at the Industrial Relations Court.

Freeport, which operates the Grasberg gold and copper mine in Timika, Papua, currently employs 22,000 workers, of which 9,000 are non-staff workers and 3,000 are staff workers. The remaining 10,000 are employed by contractors.

When told of workers’ yearly salary figures, strike coordinator Hasan Samigu said only some Rp 90 million per year was paid to the lowest level field operators, while the highest level received Rp 142 million.

Ramdani did not deny the workers’ claims that Indonesian workers received the lowest salaries compared to the company’s other mines, including in North America, but he did say that the mines in North America had almost the same level of productivity as the Grasberg mine but with only 2,000 workers.

“It’s all about productivity. In Indonesia, our operation is very labor-intensive. We also want to follow the regulations on workers here,” he said.

On Friday, the Indonesian Mining Association (IMA) deputy chairman Tony Wenas said the workers’ demands for hourly wages was “unrealistic and is not in line with standards applied in Indonesia”.

“The demand may cause a domino effect with other mining companies, the appearance of social jealousy between workers and locals due to income disparities and declining income for the government due to soaring operational costs,” he said in a press statement.