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)