May 9, 2017 / 11:03 AM / 3 months ago

Workers' strike to disrupt operations at Jakarta's main port next week - union

JAKARTA, May 9 (Reuters) - A union workers' strike next week is expected to disrupt shipping operations at Jakarta's main port, which handles the bulk of international shipments for Southeast Asia's biggest economy, a labour union official said.

Around 2,000 union members are expected to go on strike from May 15-20 at the Tanjung Priok port to protest against an affiliate of Hutchinson Ports, which the union says is bad for the country and for workers' rights.

"We are going all out in (next week's) strike," said Nova Sofyan Hakim, chairman of the union at PT Jakarta International Container Terminal (JICT), adding that all port operations would be halted during the strike.

The union opposes a decision by state-owned port operator Pelindo II to extend an operating contract held by JICT, a company that Pelindo II runs with Hutchison Ports to handle container loading and unloading.

Hutchison Ports, JICT and Pelindo II could not be reached for comment, while Indonesia's transport ministry declined to comment.

JICT's contract was due to expire in 2019, but in 2014 Pelindo II extended it until 2039. Pelindo II's decision to continue to partner with Hutchison drew public criticism and parliament has been investigating the extension since 2015.

A parliamentary committee in February said it found the contract extension to have potentially caused state losses of 36 trillion rupiah ($2.70 billion) and that it was awarded without shareholders' approval, including the government, media reported.

The contract is currently under audit by Indonesia's Supreme Audit Board. Pelindo II's President Director Elvyn G. Masassya was quoted by media last year as saying he will respect the board's recommendation based on the audit results.

Hutchison currently controls 51 percent of JICT, while Pelindo II has a 48.9 percent stake, according to Pelindo II's website.

"We are not anti-foreign investment, but the JICT extension has been conducted without a government permit, violating laws and bringing losses to Indonesia," Hakim said.

Government officials expressed concerns the strike could hurt Indonesian exports.

"It's very unfortunate if they continue with this. All sides have to solve this problem for the sake of national interest," said Edy Putra Irawady, Indonesia's deputy coordinating minister for economics.

Tanjung Priok port is in the middle of upgrading its annual handling capacity to 11.5 million twenty foot equivalent units from 5 million TEUs in 2010. ($1 = 13,327.0000 rupiah) (Reporting by Hidayat Setiaji, Gayatri Suroyo and Cindy Silviana; Editing by Ed Davies and Randy Fabi)

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