Turn Jamsostek into a trust fund
Ridwan Max Sijabat, Jakarta
As the government, political parties and elites continue treat PT Jamsostek, a state-owned company carrying out social security program for workers, as their cash cow, for the sake of workers, it will be much better for sake of the workers to change the current status of the social-security firm to a Trust Fund. Labor unions have for long time demand the trust fund status for the company to ensure the safety of the workers' money from being abused to enrich the elites.
The abrupt reshuffle of the company's management on Monday by State Minister for State Enterprises Soegiarto proved again it was urgent to provide better protection for the company.
It looked like a blitz that struck a high tree when the government reshuffled abruptly the management of PT Jamsostek.The reshuffle was informed to the old board of directors only two hours before the inauguration of the new directors on Monday.
The abrupt reshuffle shocked not only the old board of directors whose term of office was extended for another three years in December, but also seven labor unions and the Indonesian Employers's Association (Apindo) which are main stakeholders in the company.
The reshuffle took place without conducting a fit and proper test prior to their appointment and most members were hired from financial institutions and had little knowledge about the social security programs.
The main issue is that the reshuffle is seemingly based more on political interests than professionalism and workers' interests.
Iwan Pontjowinoto, former president of PT Danareksa Pan Management, was appointed as new president while Iskandar Rangkuti, former treasury director of Bank Mandiri, and Asep Jaya Prawira, former director of Permodalan National Madani's venture capital were appointed as investment director and finance director respectively.
Only Tri M. Lestari appointed as director of human resources and general affairs comes from Jamsostek.
The Confederation of All-Indonesian Workers Union (KSPSI) and the Confederation of Indonesian Prosperous Labor Union (KSBSI) have expressed their protest of the abrupt reshuffle for fresh fears that the company's performance would continue decreasing in the next three years and more invisible hands would interfere in the company's internal affairs.
There was no clear reason from the government's side about the reason for the replacement.
Since its establishment in 1978, Jamsostek which was previously known as DJS and Astek, has never been free from interference of corrupt government officials. A bigger part of Jamsostek's assets was invested in ailing companies and banks and another part was used to finance the handling of problems having no relations with social security programs.
Just for instances, Jamsostek has been several times defeated in land cases at court after it purchased troubled spaces in Jakarta and outskirts, many government officials allegedly used Jamsostek's funds to strengthen their business emporium in 1990s. Besides, Jamsostek's assets, mostly consists of pension fund program that would be returned to workers in time, were used to finance the repatriation of illegal workers from Middle East in 1995 and to finance the making of a contentious labor law in 1997.
Despite the fall of Soeharto in 1998, Jamsostek still remains financial sources for certain sides, including ruling parties. Jamsostek's funds have been used by the government to lift the credibility of state-owned Bank Mandiri and Bank Rakyat Indonesia (BRI). The misplacement of Jamsostek's unproportional investment were revealed following the recent financial scams at BRI and now-defunct Bank Global International.
Jamsostek carries out health care, death contribution, occupational accident and pension fund programs for registered 23 million workers nationwide, will remain an object of extortion by political parties and certain groups unless an internal reform was conducted within Jamsostek.
To fence Jamsostek from any interference from outside, it is better to convert the company's status into a non-profit company or Trust Funds which is directly supervised by the President and managed by a tripartite board of commissioner representing workers, employers and the government. And not only workers and employers but also the government are also required to pay monthly payroll in their contribution to the social security programs since it is the government's obligation to provide protection for workers.
Of almost Rp 34 trillion (US$ 3.5 billion) of Jamsostek's asset, only Rp 140 billion derived from the government's contribution while the major part has been collected from workers taking part in the pension fund program. Jamsostek will be facing a serious financial problem when it has to return the pension funds to workers, most of who will enter their mandatory pension age in the next ten years.
To convert Jamsostek into a non-profit institution, Law No. 3/1992 on social security programs needs to be reviewed to revamp Jamsostek and its legal status. Law No. 40/2004 on national social security system also needs to be reviewed since it regulates that Jamsostek will be merged with social security programs for civil servants (Taspen and Askes) and for servicemen (ASABRI).
Both labor unions and Apindo have expressed their objection to the planned merger because Jamsostek's assets came from either workers and employers.
The author is a staff writer for The Jakarta Post.