Social security insurance firms defend monopolies

Social security insurance firms defend monopolies

JAKARTA (JP): The five state-owned social security insurance
companies should retain their monopolies to ensure public
welfare, executives of the companies say.

"It's unthinkable for the government to consider lifting the
five companies' monopolies by allowing private companies to run
basic social security programs for a majority of the people,"
said Awaloedin Djamin, chairman of the Association of Indonesian
Social Security Insurance Companies (AJSI), which comprises PT
Jamsostek, PT Asabri, PT Askes, PT Taspen and PT Jasa Rahardja.

Awaloeddin made his remark yesterday in an apparent attempt to
counter a recent statement by Minister of Manpower Fahmi Idris
that the government was considering lifting PT Jamsostek's
monopoly over social security programs for workers.

PT Jamsostek's monopoly is based on Law 03/1992 and government
Regulation No. 18, issued in 1976.

PT Asabri holds a monopoly in social security insurance for
Armed Forces' personnel, while PT Askes runs the health insurance
for civil servants, PT Taspen the pension funds for civil
servants and PT Jasa Rahardja the accident insurance for public
transportation passengers.

Awaloedin, accompanied by the five companies' presidents, said
the monopolies were needed to ensure that the programs' social
mission was not exploited.

"They were set up not to take a profit but to implement the
government's social mission to provide social security for
workers, civil servants, servicemen and public transportation
passengers," he said.

He warned that there were no guarantees that the social
mission could be maintained once the sector was opened to profit-
seeking private firms.

One possibility he cited was if a private company allowed to
run a social security program went bankrupt.

"Would the government be able to guarantee that all funds
collected by the bankrupt company could be returned?," he
charged.

Autonomy

Awaloedin, a former National Police chief and ex-minister of
manpower, said the government should also provide the five state-
owned companies more autonomy in managing their assets.

He argued that the government could not treat the social
security insurance companies the same way it did its other state-
owned companies.

"The five companies are nonprofit organizations and have a
social mission while the other state-owned companies are geared
to make a profit for the government," he said, adding that the
five companies should be put under the jurisdiction of a special
body instead of the office of the minister of state enterprises.

Awaloedin also argued that because of the social mission, the
five firms should be returned to their original status as public
companies not geared to make a profit.

He said that such a status would entitle government subsidies
for the insurance companies should they suffer losses.

According to Law No. 19/1960, all state companies with a
public company status are obligated to focus 60 percent of their
activities on public services.

Awaloedin, also chairman of the ASEAN Social Security
Association (ASSA), said that with greater autonomy, the five
companies could be more independent in managing their assets and
would be free from government intervention.

"Despite being the single shareholder, the government would
not be allowed to arbitrarily use funds collected by the
companies from their clients," he said, citing the instance when
the government took Rp 1 trillion from PT Jamsostek last year to
build low-cost houses.

The government also came under fierce criticism when former
minister of manpower Abdul Latief used Rp 2.8 billion from
Jamsostek to finance deliberations over the new labor law last
year.

Latief later said that he was only following instructions from
then president Soeharto to use the money for the bill
deliberation. (rms)