Govt ends monopoly of workers' insurance firms

JAKARTA (JP): The government has lifted monopoly privileges granting state-owned PT Jamsostek and a consortium of insurance companies under the Indonesian Human Resources Foundation (YPSDMI) the sole right to insure workers sent overseas, opening the way for commercial firms to enter the fray.

Director general for labor placement Din Syamsuddin said the Minister of Manpower had revoked the old regulations with the issuance of Ministerial Decree No. 92/1998 and that consequently all insurance firms were now free to compete to insure expatriated Indonesian workers.

The decree took effect yesterday. Its aim was to "phase out monopoly in the insurance business in an effort to improve protection for Indonesian workers overseas," Din said.

He said that with the new decree, labor export companies were free to choose any insurance company for workers which they sent abroad and that the old monopoly had been disbanded.

Din also said that 40 out of 80 domestic insurance firms registered at the Ministry of Finance had expressed an interest in insuring overseas workers. Some have even set themselves up in consortiums to ensure that they take full advantage of the new business opportunities.

The new scheme excludes workers who are insured by their employers abroad. Such workers would be covered by domestic insurance firms only before their departure and after their return to the country.

Din said that all Indonesian workers employed in Malaysia, Singapore, South Korea, Taiwan and Hong Kong were covered by compulsory insurance schemes in their host countries.

The new decree stipulates that the beneficiaries of workers who die will receive Rp 3 million (US$214). If workers die in job-related accidents then the compensation is increased to Rp 6 million.

The decree also states that workers dismissed after working for at least three months will receive Rp 3 million plus a plane ticket to return to Indonesia. Those who loose their jobs after one year will receive Rp 1.5 million.

Din said the minister has also revoked rules obliging labor export companies to insure workers using PT Jamsostek through Ministerial Decree No. 7/1998.

He added that PT Jamsostek, which previously held a monopoly over insurance programs for occupational accidents and deaths for Indonesian workers overseas, would now offer cover only to domestic workers.

Indonesia has sent 1.1 million workers overseas since 1994, all of whom are covered by PT Jamsostek's occupational accident and pension fund programs. The workers have contributed US$2 billion to the country's foreign exchange.

Asked about the alleged embezzlement of more than $100 million collected by YPSDMI from workers employed overseas, Din said that the government has called on the conflicting parties to bring the case to court.

"The government will fully support any ruling made on the case by the courts," he said.

The Association of Indonesian Labor Export Companies (Apjati) recently reported YPSDMI, which is chaired by former minister of manpower Abdul Latief, to the Attorney General's Office.

Until yesterday, YPSDMI and a consortium of three insurance companies, including PT Pasaraya Life, collected an $80 social security premium from every person sent abroad to work. (rms)