Jamsostek looks to future to improve its image

Jamsostek looks to future to improve its image

By Ridwan M. Sijabat

JAKARTA (JP): PT Jamsostek, a state company that operates the
only social security insurance policy for workers, has often been
in the media spotlight in last eight months.

Most reports have been unflattering, leaving the company with,
to say the least, a severely damaged reputation.

Criticism continues to pour in of when, last year, then
minister of manpower Abdul Latief used Rp 3.1 billion
(US$210,000) of Jamsostek's funds to finance the deliberation of
a controversial labor law.

As part of the wave of reform, workers have continuously
accused company officials of rampant corruption and are demanding
an end to Jamsostek's monopoly in the provision of social
security.

Ackmal Husin, who was hastily appointed the company's new
president two weeks ago, has spoken to The Jakarta Post to
respond to this criticism and the challenges ahead:

Question: What is your response to the allegations of rampant
corruption in the company?

Answer: I am against corrupt practices. I'm trying to create a
clean management structure and promote a transparent managerial
system.

Every year the company's performance is audited by the
government audit agency (BPKP) and all its audit results have
been followed up with immediate action.

All financial leakages are being thoroughly investigated.
Officials and employees found guilty of embezzling the labor fund
have been given strict sanctions. This includes some dismissals.

Many employees have been fired for corrupt practices but is it
necessary for us to publicize this? Such practices can be found
in other companies, government offices and private institutions.

Q: How about the allegation surrounding the construction of the
multistory Menara Jamsostek buildings on Jl. Gatot Subroto, South
Jakarta, which cost about Rp 360 billion?

A: BPKP has audited the construction project accounts and no
deviations have been found. The two towers were built by private
companies which had no links to Jamsostek officials, and the
tender was offered to the public transparently. Nothing in the
project was hidden.

I knew everything about the project because I was director of
investment and finance (between 1994 and 1998) when the two
towers were built.

The construction has been completed and the towers are ready
for rent. A number of companies, including foreign investors,
have said they will move to the towers which are strategically
located in the business center.

Regarding the land used to construct the towers, South Jakarta
district court decided in 1984 that the land belonged to
Jamsostek.

However, the Jakarta Prosecutor's Office is also investigating
its ownership. We will accept whatever decision is eventually
reached.

Q: How about the Rp 3.1 billion taken from the company by former
manpower minister Abdul Latief to finance the controversial labor
law?

A: Of course, it is true that the company paid Rp 3.1 billion to
finance the law's deliberation. But let me tell you that the
money was taken not from the funds collected from employers and
workers but from the government's participatory share in the
company. The government has a Rp 5 billion participatory share
from when the company was established in 1976.

Both employers and workers can rest assured that the company
has never used the workers' money for unnecessary expenditure,
including the company's annual operation costs.

The company's expenditure and operational costs are taken from
the profit the company gains from its investments.

The company's assets are Rp 6.1 trillion. A major part of the
funds the company has collected from employers and workers has
been reinvested in participatory shares in other companies,
property, including housing for workers, Bank Indonesia
certificates and bank deposits.

Q: What is your reaction to the calls for an end to Jamsostek's
monopoly in running social security schemes for workers?

A: Jamsostek does not object to the recent idea aired by Minister
of Manpower Fahmi Idris of allowing private companies to run
insurance programs for workers.

But first the government must revoke Law No. 3/1992 which
stipulates that only Jamsostek is entrusted to run an insurance
program for workers.

Second, Jamsostek must be allowed to compete against private
companies in giving better services to workers.

However, the government should exercise caution in this matter
because changes could create loopholes for employers to avoid
participating in such programs for their workers.

Workers should realize that the program is designed to provide
them protection at the expense of their employers.

Each worker actually only pays 2 percent of their monthly wage
while their employers contribute at least 6.7 percent of their
workers' wages per month to the company.

Third, Jamsostek does not object if the government wants it to
be managed by a tripartite management representing the
government, employers and workers. But first and foremost the law
must be amended.

Q: Can you briefly explain how the payment schemes work?

A: According to our data, the company has collected, since its
formation in 1976 to December, more than Rp 6.03 trillion from
77,772 companies and 13.3 million workers participating in the
social security program which comprises four insurance schemes.

It has paid a total of Rp 393 billion in compensation for
insurance claims in the four schemes since the company's
establishment in 1976.

Employers, from their own money, contribute monthly between
0.24 percent and 1.74 percent of each worker's wage to the
occupational accident program, 3.7 percent to pension funds, 0.3
percent to health programs and between 3 percent and 6 percent
for health care insurance programs while workers contribute only
2 percent of their wages for the pension program.

The payment schemes are as follows: After an occupational
accident, the company pays between Rp 100,000 and Rp 300,000 for
transportation fees. While recuperating the worker also gets one
month's salary and his medical fees are reimbursed up to Rp 3
million.

If an employee is handicapped and can no longer work, then the
worker will receive 70 percent of 60 times his salary.

In case of death, the worker's family will receive 60 percent
of 60 months salary, an additional Rp 1 million compensation and
Rp 200,000 to cover burial fees.

The pension plan applies for those retiring at the age of 55
or prematurely, as long as the worker has participated in
Jamsostek for five years. They will receive a pension which
amounts to their total contribution to the company plus 10
percent interest.

Q: What is your vision for the company's future development?

A: My obsession is to make Jamsostek a strong company that plays
a pivotal role in the stock exchange.

As in other countries, we want Jamsostek to be a credible
financial institution whose strength lies in productive workers.

I want the company to become a more public one run by
professional fund managers.

The management will always be open to all criticism and
transparent in managing workers' money.