House commission wants end to social security monopoly
JAKARTA (JP): A commission of the House of Representatives (DPR) yesterday called on the private sector to establish social security companies and end the virtual monopoly of the state- owned PT Astek.
The House's Commission VI on labor affairs said the more companies running the program, the more efficient and effective the social security programs should be.
The proposal was made during a hearing between the commission and directors of Astek, which had been criticized for the way the state company has been managed.
M.Z. Wasaraka of the ruling Golkar faction, who chaired the hearing, questioned Astek's monopoly in running the social security program for workers in Indonesia.
The company should share the burden with other companies, he said, pointing out that healthy competition would mean that companies could strive to give their best service to workers.
Astek, a state company administered by the Ministry of Manpower, currently has a virtual monopoly over the business of providing social security programs, although the 1992 law on the subject made no mention of it being the only company.
By last December, Astek's Jamsostek program has covered 45,500 companies and 5.7 million workers. Its funds had accumulated to a total of Rp 1.7 trillion ($800 million).
Jamsostek program covers health, pensions as well as protection against accidents and death at work places.
Astek President Abdillah Nusi argued during the hearing however that more companies necessarily means greater efficiency.
"Astek principally has no objection to the commission's suggestion, but the factors of inefficiency and ineffectiveness should be taken into consideration," he said.
Even in countries like the United States, Canada and Britain, there is now a tendency to hand over the business of providing social security programs to a single company, state or private, he said.
Never late
Abdillah said his company has the capacity to handle all the social security program needs of Indonesia by itself for at least the next 15 years.
He pointed out that Astek had so far only managed to tap about 30 percent of the 140,000 companies which by law should provide social security programs to their workers.
He also defended Astek's record in maintaining its services to the participants of the program, pointing out that the company was never late in paying claimants.
Abdillah, who was appointed as president by Minister of Manpower Abdul Latief last February, said he was currently revamping the company as part of his effort to recruit a total of 30 million workers to join the Jamsostek within the next 15 years.
The company's campaign had focused more on informing companies of their obligation to provide social security programs for workers. Now the campaign is emphasizing enforcement, he said.
The 1992 law on social security stipulates that all companies employing more than 10 workers must enlist them into social security programs. Violators are subject to a fine of Rp 50 million or six months imprisonment.
Responding to a question, Abdillah ruled out the possibility of foreign investors entering the social security business in Indonesia. (rms)