Jamsostek enjoys Rp 8t windfall profit

Ridwan Max Sijabat, The Jakarta Post, Jakarta

Minister of Manpower and Transmigration Fahmi Idris has asked state insurance company PT Jamsostek to pay back part of the funds collected under health care, life insurance and occupational accident benefit programs, to workers and companies with no insurance claims.

Jamsostek has over the last four years raked in Rp 8.4 trillion (US$866 million) from unexercised insurance claims.

Between 2001 and 2004, the company allocated around Rp 3 trillion (US$309.27 million) in its annual budget to cover insurance claims, but only around 30 percent of it was paid to workers while the remaining 70 percent has been treated as its annual profit and channeled to the government as the sole stakeholder.

"It is very unfair to return the allocated compensation funds to the government as the money was collected from workers and their employers for their participation in the social security programs," Fahmi said during the signing of an agreement between Jamsostek and the Confederation of All-Indonesian Workers Union (KSPSI) here on Tuesday.

He said the unused funds could be returned in the form of an annual bonus either to workers or their employers.

Fahmi, co-owner of the Kodel Holding Group until his appointment to a ministerial post last October, said he had voiced the request not only for the sake of fairness but also to encourage more companies and workers to join the social security programs.

"So far, most firms and workers have been registered with Jamsostek just because it is an obligatory program and not because they are aware of the benefits of social security schemes. This has been indicated by the small number of workers participating in the programs," he said.

Of the country's 90 million-strong work force, 24 million have been registered with Jamsostek and only 7.5 million have remained active in paying their monthly insurance premium to Jamsostek.

KSPSI chairman Jacob Nuwa Wea agreed with Fahmi, saying the government and the House of Representatives should amend Law No.3/1992 on social security programs first to enable Jamsostek to return the unused funds to workers and companies.

"Under the new status, Jamsostek would have no obligation to pay dividends to the government because it (the government) would no longer be a stakeholder.

"Also, the payment of unused claims would prevent Jamsostek from becoming a nest of corruption or a government cash cow because the social security funds would be managed by a tripartite body representing workers, employers and the government," Nuwa Wea, a former labor minister, said.

Jamsostek has come under public scrutiny due to the naming of two of its former executives as suspects due to their investments in some companies between 2001 and 2004, which according to investigators caused Rp 250 billion in state losses.

Responding to the proposal, Jamsostek's president Iwan P. Pontjowinoto said he would study and discuss it with the management.

"In principle, we agree to the proposal because Jamsostek was established to provide maximum benefits for workers. But, let us learn more about it so that its implementation does not violate the law," he said.