PT Medco Papua, which operates a forestry business in the Boepe area, Kaptel District, Merauke, exporting wood out of Merauke, has stopped its operations for the time being. This stoppage came about because various things the company were doing were contravening the labour law (law no. 13/2003). Officials from the Labour and Transmigration Agency had already been calling on Medco’s head office to resolve the problems which were in breach of that law. Alongside this, during the previous 10 months there has been a problem with marketing the exported wood – the company’s outgoings have exceeded its income.

“The market price of the wood products they are producing does not match the national market price, and so they are losing out. The market prise has increased, but the wood that the company is shipping is still fetching a lower price.” explained the head of the Merauke Labour and Transmigration Agency, Oktavianus Kaize, when asked in his office on Tuesday (17/6). It is this problem that has made Medco take the decision to stop operations and wait for the global market price to return to normal. Once prices stabilise, PT Medco Papua will resume operations.

Medco’s solution is to make 350 of its 400 workers redundant, and keep the remaining 50 workers on to look after the company’s equipment and infrastucture. The company will make redundancy payments for the 350 workers in accordance with the labour law. Meanwhile the Labour and Transmigration Agency will attempt to find work for the unemployed workers with other companies that are operating in Merauke.

Source: Suara Merauke (Merauke Local Government Web Portal) http://suara.merauke.go.id/?p=3429