Friday, February 09, 2007

Bankruptcy of foreign firm costs 1,300 jobs in Batam

Fadli, The Jakarta Post, Batam

More than a thousand workers at a foreign-investment company in Batam, Riau Islands province, were shocked to find out they were out of work this week.

The Malaysian joint-venture company PT Livatech Electronics Indonesia stopped operations, leaving its 1,300 workers in the lurch.

Workers gathered outside the company's factory in the Kara Batam Center industrial complex Wednesday, unsure of their future.

Worker Muhammad Yusuf told The Jakarta Post workers at the factory did not know beforehand that the company was closing down.

Muhammad, who worked at the factory for 15 years, said company head Goh Singhing, also known as Jackson Goh, had not shown up to work for the preceding two weeks. On Feb. 5, production at the factory was stopped.

Goh invited workers' representatives to a meeting Tuesday at a cafe in Singapore's Ferry Harbour Front Center to discuss the company's future.

"At the meeting, Mr. Goh told us to go ahead and sell the company's assets to pay for salaries and compensation. He was accompanied by his lawyer and we couldn't do anything. He said the company was bankrupt," Muhammad said.

Another worker, Radiana, said there was no sign the company, which first opened in Batam in 1993, was about to go bankrupt.

"It's true that since early February the orders the company was receiving were less than they used to be. But there was still work," she said, adding that the drop in orders had already forced the company to lay off 190 workers.

Each worker at the factory received a salary of around Rp 815,000 per month.

Muhammad said he was unsure how much of the factory remains.

"We don't know whether the factory's machinery is still there since several rooms are sealed. We agreed to guard the factory," Muhammad said.

Batam Industrial Development Authority spokesman Dwi Djoko Wiwoho said Wednesday he was not aware of the factory's closure.

"The Batam Authority and related offices will find out what's going on and try to come up with solution to the matter," he said.

However, he denied the company would have stopped operations due to the unclear legal status of its investment in Batam, which is designated a Special Economic Zone. There have been complaints of complicated bureaucracy and high salaries in the zone.

According to the authority's data, 12 foreign-investment companies left the island between 2005 and 2006 for various reasons, while 600 companies remain in operation.


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