Govt ends monopoly of workers' insurance firms

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)