Astek diversification plan meets opposition
JAKARTA (JP): The state-run insurance company PT Astek's plan to invest its clients' money in other ventures met with strong objection from the House of Representatives yesterday.
Legislators from different political factions joined hands in a hearing with Astek officials to foil the plan, which they said was "deviating from the firm's original mission as a non-profit institution".
Members of House Commission VI on labor affairs suggested that Astek stick to its original social mission, as required by the 1992 law on social security program.
"The law prohibits Astek from becoming a business entity," legislator Odiyanto of the Armed Forces faction said. "Astek is to serve workers' interests and nothing else."
Astek President Abdullah Nusi told the hearing, chaired by legislator Haris Soedarno, that the firm means to set up subsidiaries and use the profit for the welfare of workers and to create more jobs.
He said Minister of Manpower Abdul Latief and Minister of Finance Mar'ie Muhammad, in their capacity as Astek's share holders, have approved the plan.
"Astek means to set up subsidiaries with cement, pulp and paper, property and hospitals as their core business. This would be better than depositing the funds in banks," he said, adding that almost all developed countries do the same.
Astek, set up in 1987 to manage social security insurance, which covers occupational accidents, health care and pension funds, has accumulated Rp 3.2 trillion (US$1,4 billion) from 7.6 million workers. Over 51,000 companies have participated in the program. Its investment fund is expected to reach Rp 15 trillion, with about 30 million clients, in the year 2000 and Rp 70 trillion with 87 million clients in 2018.
Opposition to the diversification plan also came from a legislator in the ruling Golkar party, Rambe Kamarosaman.
"This company was established not to do business and make profit but to serve and protect workers," he said.
Pranowo, of the Armed Forces faction, said that Astek, as a state-owned company should, instead of doing business, focus on giving its best service to workers.
"The funds that have been accumulated by Astek belong to the workers. Therefore, they have a priority to be served and protected.
"But now what happens? Astek has yet to succeed in enforcing the law, to have all paid workers and companies participating in the social security program," he said.
Royani Haminullah of the Indonesian Democratic Party faction warned that Astek should be extra-careful in managing the funds it has collected from workers, saying that the more subsidiaries the company had, the more inefficient it would be.
He stressed that Astek should not put the funds on the line as most workers still live in poverty.
Citing recent findings of the Government Audit Agency, he said that Astek has used the participants' money for unaccountable projects.
He cited, as examples, that the company purchased Rp 1.4 billion shares of Damai Indah Padang Golf and Cibodas Golf Park in West Java in 1993, and Rp 9.2 billion shares of PT Textronics.
Minister Latief also said recently that PT Astek was planning to establish a pulp and paper factory and a cement plant, which would be financed with the participants' money. (rms)