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)