Delay sought for social security bill

Ridwan Max Sijabat, Jakarta

The Indonesian Employers Association (Apindo) and an alliance of labor unions called on the government and the House of Representatives to suspend the ongoing deliberation of the controversial bill on the national social security system, saying that it would be better to revise Law No. 3/1992 on social security programs in an effort to improve workers' benefits.

Haryanto M.S. -- who chairs the Forum for National Bipartite Consultation and Communications (FKKBN), which is fully backed by Apindo and 63 labor unions -- said, here on Friday, that Apindo and labor unions had agreed to reject the controversial bill, and mobilize workers to turn to the streets if the bill was endorsed in the coming months.

"We could not accept the bill because, if the national security system were to be implemented, its substance would jeopardize both employers and workers.

"Besides, contrary to the amended 1945 Constitution, only the people -- namely workers and employees -- would enroll in the national program. According to the principles of such programs, the government, representing the state, should play a leading role by contributing as a main stakeholder. But, in reality, the government has not made any contribution to the existing social security programs, and the bill does not require the government to do so," he said.

Both Apindo and labor unions in their capacity as stakeholders in the existing programs have not been involved in preparing the bill.

The existing social security programs are: For workers (Jamsostek), for civil servants (Askes and Taspen) and for servicemen (Asabri). They are all run by the government, but the latter does not have a stake in the programs.

The bill stipulates that all workers and their employers are required to enroll in the national program. Members of existing programs would gradually join the national program, while the unemployed and low-income workers would be named as beneficiaries of the program, and their premiums paid by the government through the annual state budget.

It also regulates that all state-owned companies running existing social security programs would merge in phases, and members would join the national program.

Apindo's secretary-general Djimanto, said employers would not pay premiums for the unemployed and low-income people as that was not the employers' responsibility, but the government's.

"Based on the bill, in the next 25 years, 25 percent of employer's total costs would be labor costs, which would overburden them. Besides which, the government must be honest as to whether it would be able to subsidize the unemployed amid economic hardships -- and this new system would discourage foreign investors," he said.

Alex Arifianto, a researcher at the SMERU institute in Jakarta, concurred, saying that the national social security program would likely make the investment climate in the country less competitive. He said employers would also reduce to a minimum the number of their employees, and even dismiss workers to reduce labor costs.

Alex warned that the aging population would increase to 30 percent of the total population in 2050, from 10 percent in 2000. As a result, he said, the government would face serious financial problems in the next 30 years if it had to give retiring workers a payout. "So, the proposed system is not financially sustainable," he said, adding that Indonesia should learn from the experiences of developed countries, such as Germany, France and Austria in designing its social security program.