Govt should not be hasty in phasing out Jamsostek's monopoly
Govt should not be hasty in phasing out Jamsostek's monopoly
JAKARTA (JP): The Association of Indonesian Social Security
Insurance Companies warned the government yesterday not to be too
hasty in phasing out of the monopoly of PT Jamsostek, a state-
owned company which runs the compulsory social security program
for workers.
Association chairman Awaloeddin Djamin pointed out that in
other countries, social security programs were run by state-owned
companies or agencies under the basic principle that the
government is obliged to protect the people.
He said there were five state-owned companies that run social
security programs in Indonesia. They are PT ASABRI, which runs a
social security program for servicemen; PT Taspen, which runs
provident funds for civil servants; PT Askes, which organizes
health insurance for civil servants; PT Jasa Rahardja, that runs
social security for transport passengers; and Jamsostek.
President B.J. Habibie's government is planning to review Law
No. 3/1992 -- which gives Jamsostek the monopoly to run the
social security program for workers -- arguing that monopolies
were not in line with the government's spirit. It plans to open
ways for private companies to run the programs.
Awaloeddin said former president Soeharto's government had
actually campaigned for the inclusion of private companies in the
provision of social security programs, but the House of
Representatives rejected the idea in 1992.
Awaloeddin cited the difficulties that might arise should
private companies be allowed to run the social security program.
"Who would be held responsible and who would suffer losses if
the private companies went bankrupt?" he said. "Whereas if
Jamsostek went bankrupt the government would take care of it."
He said private commercial insurance companies should have
their core business in commercial fields and not in public
utilities.
"A monopoly giving benefits or utilities to a majority of
people should be maintained and should be held by state-owned
companies," he said, citing electricity and train companies.
Awaloeddin, also a former minister of manpower, urged the
government to return Jamsostek and four other social security
insurance companies to their initial status of "public companies"
(perum) and to give them special treatment just for their social
mission.
"If they remain under their current status as limited
companies (PT), they will continue to be profit-oriented, obliged
to pay taxes and share dividends annually to the government," he
said.
But if the companies' status reverted to perum, he said, they
would be bound to their public service mission and exempted from
paying tax.
He said that additionally, the 1969 law on perum should be
revised to phase out public companies' obligations regarding
taxes and dividends.
"With a revised law on perum, the five companies would not
have to pay taxes and share dividends to the government," he
said.
Minister of Manpower Fahmi Idris acknowledged separately that
the social security program should ideally be run by the
government.
However, "do we want the social security program to be run by
a government which easily interferes in the company's internal
affairs, including its investment policy?" he said in a seminar
on industrial relations here yesterday.
Review
He said that he has set up a special team to prepare a
judicial review to the law.
He said he wanted the social security to be run by the
government in cooperation with cooperatives and private
commercial insurance companies.
Datuk Bagindo, chairman of the Federation of All Indonesian
Workers Union (FSPSI), said that the social security program for
workers should be run by an independent state agency.
"If Jamsostek is run by an independent agency... it will have
the authority to manage the funds collected from workers and the
government could not easily interfere in its internal affairs,"
he said.
Ackmal Husin, president of Jamsostek, said the company
supported the government's plan to phase out its monopoly. He
also said the company was ready to compete in giving the best
service to workers.
Jamsostek recently found itself in hot water over corruption
allegations, including in relation to the construction of two
towers in Jakarta and the use of Rp 71 billion (US$6.1 million)
to finance the deliberation of the controversial labor law last
year.
As of July 1998, Jamsostek's assets were Rp 6.7 trillion and
it was serving 14.5 million across the country. (rms)