Squeezing blood out of a stone, or just progress.

Squeezing blood out of a stone, or just progress. [Posted 23 Sep 2015, 141 views, 10 likes, 2 comments]

The government has stated its intention to increase its revenue from the mining sector. This policy will ultimately mean that the mine workers are taking on an increased burden to support the Indonesian people.

During the Dutch colonial period, some mines were operated using imported Chinese or prison labor, while Indonesian laborers working in mines were considered to be of very low social status and with no social protection. During the Sukarno era the mining SOE’s objective was to adsorb employment, with such government jobs typically being single function activities that were suited for the relatively unskilled and uneducated work force, under the control of a few engineers. The attitude of the workers was similarly such that they were given jobs due to local influence, and some did not expect to work hard. A line from an old Hollywood movie refereeing to Russia seems to apply here – “The workers pretend to work, and the Government pretends to pay them”. One observed example in the 1970’s where Bukit Asam was advised to advance the coal rail head closer to the mine, and thus improve productivity through the reduction of labor. However one BA manager refused on the excuse of the need to employ local people, but also he was receiving a kick back from the labor contract. Aneka Tambang’s underground gold mines of Cikotok were kept running at a loss for a number of years simply to retain a core set of underground mining engineers and skilled operators, and were “rescued” from termination when the Ponkor mine opened up. Another historic example was PT. Timah that had opened a porcelain factory to use the waste clay and create employment for the wives of the mine workers.

This emphasis on adsorbing manpower changed when Kuntoro was directed to revitalize PT. Timah and thousands of jobs were cut. The introduction of the Contract of Work system to privatize the mining industry was also a new beginning of building a skilled and responsible work force. The recent financial crisis that started towards the end of the SBY presidency and continues today has seen another mega shift in the mining manpower scene. To survive, the mines need to improve productivity through manpower efficiency. No longer is it two men for one job (say tire changer and assistant), but it is now typically one man for two or three jobs. Fortunately the recent history of better basic education and training at mine sites has enabled a number of workers to be multi skilled. Indonesian manpower productivity can now begin to compete with its international industry competitors. The present commodity crisis has also provided some mines with the opportunity to shed some nepotism dead-wood, while others are questioning how to revise their security manpower, government reporting and other such non-core manpower. In some cases the deliberate slow down of production to match limited sales is accompanied by the reduction of overtime, or reducing shifts.

The mining unions were largely defeated during the latter phase of Suharto’s period, and the massive layoffs from the raw ore export ban saw no effective coordinated labor response. Indeed it was the companies affected by the raw mineral export that appealed through the court system to stay open and continue to provide employment. Today, some mine workers are aligning themselves with the companies to work harder as part of the team effort for the company and its work force to survive. However the government does not seem to fully appreciate the mine labor situation. For example the new labor requirement for the pension plan is a further cost to the company. While such pension plans are certainly in the workers best interests, there is no additional income or relief for the company and ultimately the extra costs may be offset by further reducing the work force.