Study Case of PT.

Freeport Indonesia Compensation

Issue
Paper Assigment

Created to Accompolish Task of Human Resource Management Subject

Arranged by:
1. Abdan M. Adani (002)
2. M. Aditya (219)
3. Putri Hanifa (295)
4. Reka Meisari (206)
5. Ribka Natarmi (316)

PROGRAM STUDY OF MANAGEMENT

FACULTY OF ECONOMIC AND BUSSINES
UNIVERSITY OF SINGAPERBANGSA KARAWANG
2017
A. Background

There is a strong statement that there are ethics distortation and human rights
violations in Papua. Human dignity that should be respected, civilization and culture
to the chain of livelihood obviously violated. It is a fact that government negligence
is very bad, as currently being underestimate the people of Papua. The idea that
states get welfare but in fact failed.

Ironically, twice of Freeport Labors to strike since July to claim pay discrimination
normative matter, but both times had to riot. Economic benefits should be, not as
promised, otherwise the environment and communities around mining sites
continue to deteriorate and protests due to various violations of law and human
rights.

B. Problem Analysis

PT Freeport Indonesia is a kind of multinational corporation (MNC), the

international or transnational company headquartered in one country but there are
branches in many developed and developing countries.

Breakdowns in almost all Labors of PT Freeport Indonesia due to differences in

the standard index of salary implemented by management at Freeport's operations
around the world. Freeport Labors in Indonesia are known to get a lower salary than
the Freeport Labors in other countries for the same job level. Current hourly salary
of USD 1.5-USD 3. In fact, compared to salaries in other countries reached USD 15-
USD 35 per hour. So far, negotiations are still hit a dead end. Freeport's
management insisted on rejecting the Labors' demands, whatever the
considerations.

Cost of CSR to the little people of Papua who touted that was nothing because it
does not reach 1 percent net profits PT FI. In fact, the Papuan people pay more
expensive because they have to bear the consequences in the form of damage to
natural habitats and the extinction of Papua are not priceless. The reclamation costs
will not be dditanggung generation of Papua until seven generations.

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 Generally, corporations from the US, the Labors are part of the company's
assets. Maintaining good relations with Labors is a must. Because, that's where
happens mutualism relationship with one another. The Company requires dedication
and loyalty that production is getting better, while Labors requires management
commitment in terms of providing a decent salary.

The government in this case deserve a shame. Therefore, the presence of MNCs
in Indonesia proved to be an example to avoid a dispute over the very basic
normative. Policies to provide exceptional discretion to PT FI, excessive privilege,
was just pointless.

C. Troubleshooting by PT Freeport Indonesia

PT Freeport Indonesia spokesman Ramdani Sirait, said that the management

company PT FI will communicate with the Indonesian Labors Union (SPSI) in order to
anticipate the threat of strike action by Labors. Because the issue of the strike
action plan related to the termination of the three employees of PT FI doing physical
intimidation to other employees.

He said, to physical intimidation comply with IRC (Industrial Relations Code)

Collective Labour Agreement (CLA) as in the case of three employees who perform
physical intimidation, processed under the provisions of the IRC-CLA.

Clauses contained in the CLA has accommodated the aspirations of Labors. One
is an increase in the basic wage by 40 percent within two years. "This figure is far
above the average of the provisions of the basic wage increase nationally by 10-11
percent per year," he continued.

In an effort to prevent things that are not desirable in the company, the
company has formed a Crisis Management Committee. Namely to create an
environment of peace and harmony, PT FI and leadership SPSI PT FI also has
established a Crisis Management Committee.

D. View Point by KHL

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 During this time the government did set KHL through the Minister of Manpower
and Transmigration (Manpower). The final rule, the Ministry of Manpower (Menaker)
No. 13 in 2012, set KHL calculate the 60 components that must be met in
determining wages. KHL workers, however, issued his own version as much as 84
early component.

Labors consistently voiced wage increase to Rp 3.7 million per month starting in
2014. To prove his seriousness, reportedly as many as two million Labors took to the
streets to smooth out his intentions.

The calculation of these Labors is different from the estimated wage boards,
which reportedly will only set the wage of Rp 2.2 million per month.

Problems labor continues to be debated every year. Determination of wages by

calculating the Living Component (KHL) always being debated Labors and
companies.

Article 77, paragraph 1, of Law No.13 / 2003 requires all employers to implement
the provisions of working hours. Conditions of working hours have been arranged in
two systems as mentioned above, namely:

7 hours of work in one day or 40 hours in one week to six days of work in one
week; or
8 hours in one day or 40 hours in one week to five days of work in one week.

So the average working hours of workers in Indonesia is 40 hours per week and
160 hours per month. Under the regulation, wages Pt. Fi is $ 2.5 x 160 hours = 4oo
USD.

Assuming the exchange rate of the dollar to rupiah is Rp 13 377 per US dollar,
then their salary in a month is Rp 5.350.800 it is far adrift with KHL average 2.2
million rupiahs.

E. Law have been PT Freeport Indonesia Violated

1) PT Freeport Indonesia has violated the rights of Indonesian Labors (HAM)
under Law No. 13/2003 on lawful strike. PT Freeport Indonesia has violated
Article:

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 a. Article 139: "Implementation of the strike by the Labors / laborers who
work in companies that serve the public interest or companies that kind
the endangerment of human lives is set, so it is not to disrupt public
interest and endanger the safety of others"
b. Section 140: (1) "At least within seven (7) working days before the strike
carried out, Labors / laborers and labor unions / labour unions shall notify
in writing to the employers and the government agency responsible for
manpower affairs". (2) The notification referred to in paragraph 1 (a) at
least the following: (i) Time (day, date, and time) will start and end the
strike. (Ii) Points strike. (Iii) The reasons and causes why the strike. (Iv)
Signature of the chairman and the secretary and / or the respective
chairman and secretary of the union / labor union in charge of the strike.
(3) In the event of a strike staged by Labors / laborers who are not
members of labor unions / labour unions, the notification referred to in
paragraph (2) shall be signed by representatives of the Labors / laborers
designated as coordinator and / or responsible for the strike. (4) In the
event of a strike do not referred to in paragraph (1), then for the sake
menyelamat the means of production and assets of the company, the
employer can take temporary action by: (i) Prohibit Labors / laborers on
strike are planted in process activities production, or (ii) Where necessary
prohibit Labors / laborers on strike at the company's location.
2) Article 22: "Everyone has the right to work, are entitled to free choice of
employment, is entitled to realization of economic rights, social, and cultural
very treated for his dignity and the free development of personality, through
national effort and international cooperation, and in accordance with resource
settings of each country ".
3) PT Freeport Indonesia violated Law No. 11/1967 on Basic Provisions of Mining
which has been amended by Law No. 4/2009.
4) In addition to conflicts with Regulation 76/2008 on Forest Rehabilitation and
Reclamation liabilities, there has been evidence of a paradoxical attitude of
Freeport.

The stability of the operating cycle Freeport, acknowledged or not, is an

important barometer of political stability colony of Papua. The economic induction of
children turning machine giant corporations that Freeport-McMoran in Papua region

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has tremendous magnitude to the movement of the region's economic, national,
and even global.

F. Conclussion

From the discussion above, it can be concluded that PT Freeport Indonesia has
been break the rules business ethics and braek the law. Rights based on human
dignity and the dignity of all human beings are the same. Because the right fits
perfectly with the atmosphere of democratic thought.

PT Freeport Indonesia is very unethical where the obligations towards the

employee is not satisfied because their salary is not worth it compared to Freeport
Labors in other countries. Even though PT Freeport Indonesia is a gold mine with the
best quality in the world.

However, although not feasible when compared wages of workers of PT. Freeport
apart in Indonesia, the average wages of workers of PT. Freeport Indonesia has been
very fulfilled by the KHL in Indonesia.

G. Suggestionss

Indonesian government should quickly respond to these issues and quickly to

tackle the problems of PT Freeport Indonesia. Because so many existing resources in
Papua, but the people of Papua in particular and the Indonesian State did not enjoy
the fruits of natural resources in Papua. Do not let the Americans get more and
more profit out of property owned by the State of our own, country.

H. Reference

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Meryana, Ester (2012). Ini Tanggapan Freeport soal Ancaman Mogok Lagi. From:
http://bisniskeuangan.kompas.com/read/2012/06/06/12430369/Ini.Tanggapan.Fr
eeport.soal.Ancaman.Mogok.Lagi. Accessed March, 10 2017

Asril, Sabrina (2015). Bagaimana Penetapan Upah Minimum dalam PP Pengupahan

yang Baru?. From: http://bisnis.liputan6.com/read/734931/mau-tahu-komponen-
hidup-layak-buruh-ini-daftar-lengkapnya. Accessed March, 12 2017