House urged to keep Jamsostek monopoly

House urged to keep Jamsostek monopoly

Ridwan Max Sijabat, The Jakarta Post, Jakarta

State-owned insurance company PT Jamsostek and labor unions have
strongly urged the House of Representatives to maintain the
government's monopoly in running social security programs for
workers, in its amendment of the social security law to allow
private company participation.

They appreciated the House's move to amend Law No. 3/1992 and
reform social security programs but opposed the proposal to allow
the private sector to take part in running basic insurance
programs. Besides being contrary to internationally-accepted
principles on social security, the workers would be unclear on
their basic protection rights, they argued.

"Both the government and the House should fully understand the
Human Rights Declaration and International Labor Conventions on
labor protection. They should anticipate negative consequences
for such a ruling," Jamsostek's operation director Djoko Sungkono
told The Jakarta Post by telephone from Singapore.

Djoko, along with several legislators and insurance experts,
was in Singapore for the last leg of a week-long road show to
conduct a comparative study on the implementation of social
security systems in Southeast Asian countries and South Korea.

He was commenting on the House's recent decision to amend the
social security law immediately, to allow the private sector to
participate in providing social security schemes for workers.

Djoko, also an insurance expert, explained that social
security programs were actually the state's responsibility in
providing protection for workers.

"The social security scheme is mandatory because it is the
government's obligation to provide protection for workers. So
far, we have been running four of nine obligatory social security
programs. The four are health care, occupational accidents, life
insurance and pension programs.

"No country in the world has allowed private companies to run
such programs for reasons of accountability," he said, adding
that there was no guarantee for workers if private companies were
bankrupted while running the programs.

Hikayat Atika Karwa, deputy chairman of the Confederation of
All-Indonesian Workers Union (KSPSI) criticized the House for
politicizing the social security issue. He said, a number of
labor unions had joined force with KSPSI to oppose the House's
proposal to allow private companies to run the programs.

"The House should not amend the social security law in order
to make money from private companies. The proposed reform of the
social security system is much needed, but to benefit the workers
not to steal their money," he said.

Muchtar Pakpahan, chairman of the Indonesian Prosperity Trade
Union (SBSI), said his union would also be strongly opposed to
private companies involvement in the programs.

"Our current congress recommends that the government should
hold a monopoly in running the social security programs. This
allows better service and maximum benefits for the workers," he
said.

Djoko has also urged the House to approve Jamsostek's proposal
to become a nonprofit institution, which would be directly
supervised by the President.

"Under a nonprofit status, the government, currently the
biggest shareholder, would no longer get dividends from the
company's annual profit. The government would also be required to
contribute to the programs to show its commitment to providing
protection for the people, as in South Korea, Thailand, Malaysia
and Singapore," he said.

Under the four programs operating, Jamsostek has collected Rp
21.6 trillion from 26 million workers and 107 companies across
the country. A bigger part of the assets has been deposited in
state-owned banks, blue-chip shares and SBI promissory notes.