'Jamsostek program must stay a monopoly'

JAKARTA (JP): The prospect of having a private company manage the country's social security program during the crisis has led to strong support of a continued state monopoly of the program.

Representatives of workers and employers, a legislator and an insurance industry executive said in a discussion here on Saturday that they rejected the government's idea to privatize the program.

Wilhelmus Bokha, deputy chairman of the All-Indonesia Workers Union Federation (FSPSI) said that particularly during this crisis, the social security insurance program should be seen as "a valuable social safety net because it had proved to be able to provide protection and benefits for workers".

In March, the state-run social security insurance company, PT Jamsostek, allocated Rp 4 billion to aid dismissed workers, including those which were not members.

"Insurance companies have been worst hit by the crisis and it would be even harder for them to survive if they had to provide social security and other benefits for sick, injured or dismissed workers," Bokha said.

Minister of Manpower Fahmi Idris introduced the then much- welcomed idea of privatizing the program in May, following the uproar over reports of rampant corruption in Jamsostek.

Fahmi had said he agreed with a state monopoly of the program but believed it would be better in private hands.

Awaloedin Djamin, chairman of the Association of Indonesian Social Security Insurance Companies, agreed that problems regarding bad management and too much government intervention in PT Jamsostek led to abuse of the funds. But the government had to end this, while privatization was not the solution, he said.

Awaloedin suggested that PT Jamsostek should be given more autonomy, to let it be free of future government intervention.

Bokha said it would be impossible to allow private companies and cooperatives to handle the program and manage the social security funds collected from workers amid threats of bankruptcy.

He added "there is no legal certainty" that private companies, if entrusted to run the program, would be able to return all funds they collected from workers if they went bankrupt.

More importantly, Bokha said, the state's monopoly of the program was stipulated by a 1992 social security law, which shows the government is obligated to provide protection for workers.

Quoting the International Labor Organization Convention No 102, issued in 1952, he said that governments should provide workers with minimum social security protection comprising medical, handicap, death and pension benefits.

Ismoe Handoko, a legislator of the Golkar faction, said that the government should be held responsible for failing to protect its workers if it phased out PT Jamsostek's monopoly.

"All governments in the world are obliged to give and improve protection for their own workers," he said.

He said Jamsostek should be separate from commercial insurance companies, which were oriented to gain profits.

Even if it made a profit, this should be accumulated for workers' maximum benefits, he said.

He urged transparency in the company's financial accounts, citing the alleged use of Rp 4.1 billion for a new labor law, for construction of the company's two luxury towers in Jakarta and the recent purchase of 1,870 hectares of land in Jonggol, West Java.

The Association of Indonesian Employers' secretary-general, Poerbadi Hadiprayitno, criticized Fahmi's plan to end the state monopoly because Fahmi said he did not believe the government.

"If the minister no longer believes in the current government, why did he accept his position? He is obliged to correct the government, which has made too many interventions in the company because he is part of it," he said.

He also said that the company's management should be revamped and replaced by a tripartite one representing workers, employers and the government.

PT Jamsostek has collected Rp 6.7 trillion from 14.5 million workers employed in 16,000 companies across the country. (rms)