INDONESIA COUNTRY REPORT
I. GENERAL
Historically, the social protection system in Indonesia was
started in 1977 by introducing a social insurance for workers in the formal
sector (i.e private and state-owned companies), known as ASTEK (Employees’
Social Insurance/Asuransi Sosial Tenaga Kerja). The aim was to provide
employment accident insurance, a provident fund and death insurance. The
schemes were administered by PT. ASTEK, a state-owned company. In 1992, Indonesia
enacted a major reform of its social security system, as a new social security
law was adopted.
This law established a new security system known
as JAMSOSTEK (Social Security for Private Sector Employees). Under this revised
law, the ASTEK scheme was changed to JAMSOSTEK scheme and broadened with
medical care benefits. PT ASTEK changed to PT. JAMSOSTEK. This new program
greatly improved the benefits for workers covered by the scheme. It provides
basic protection in the formal sector for workers and their families. It
provides savings for old age and certain other circumstances, death benefits,
benefits for accidents occurring at work or occupational illnesses as well as
medical care coverage.
But this social security system still has several
weaknesses, such as:
- Limited Coverage
-
The
Jamsostek scheme’s coverage of only focus on employees/workers in the formal
sector. Home industries and informal sector workers are not under statutory
coverage, even though since economy crisis hit Indonesia in 1998 the growth of
small enterprises and informal sector workers has been increased rapidly.
-
Provision
of “opting-out” for qualified schemes
-
Low
compliance rates (less than 50 %)
-
Contribution
evasion by under declaration of tax base (especially health care).
- Insufficient Protection
-
Inadequate
benefit level and payment method (especially old age)
-
Problems
with the legal status (obligation of dividends and tax, weak law enforcement
mechanism)
-
Gap
in the range of protection (unemployment)
- Not all Jamsostek schemes comply fully with the low and government regulations on employees’ social security or with international standards (as defined by the ILO).
The social security system in Indonesia is
less developed than other countries, even if we compare to other developing
countries, government spending on social security is relatively small. For
example, in 1996 spending on employment injury, medical care, old age and death
on average was not higher than 5% GDP. This is very likely due to the economic,
political and social environment as well as the people’s negative attitude
towards the government because of corruption, collusion and nepotism. The
political and social environment for the development of a social security
system in Indonesia
is not very conducive at this time.
II.
ILO
CONVENTION, NATIONAL LEGISLATION AND REGULATIONS
Indonesian
Government has already ratified 14 (fourteen) ILO Convention, which is:
1.
ILO
Convention on Human Rights:
a.
ILO
Convention no. 29 on Forced Labor
b.
ILO
Convention no. 98 on Right to Organize and Collective Bargaining
c.
ILO
Convention no. 100 on Equal Remuneration
d.
ILO
Convention no. 87 on Freedom of Association and Protection of the Right to
Organize
e.
ILO
Convention no. 105 on Abolition of Forced Labor
f.
ILO
Convention no. 138 on Minimum Age
g.
ILO
Convention no. 111 on Discrimination (Employment and Occupation)
2.
General
ILO Convention:
a.
ILO
Convention no. 19 on Equality of Treatment (Accident Compensation)
b.
ILO
Convention no. 27 on Marking of Weight (Packages Transported by Vessels)
c.
ILO
Convention no. 45 on Underground work (Women)
d.
ILO
Convention no. 106 on Weekly Rest (commerce and Offices)
e.
ILO
Convention no. 120 on Hygiene (Commerce and Offices)
f.
ILO
Convention no. 144 on Tripartite Consultation (International Labor Standards)
g.
ILO
Convention no. 69 on Certification of Ships’ Cooks
The
Government of Indonesia has not ratified the ILO Convention no. 102 year 1952
on Social Security Benefit yet due to the present economy situation. We could
not able to implement the whole content of this convention. But, however, the government takes it as a
general guideline to formulate the social security schemes. Recently, the
government has proposed a draft of new law on social security system, including
the Jamsostek schemes to the House of Representatives and involving several
trade unions to give their main views.
The
current social security schemes are provided under various legislations, and
delivered under different programs, methods, systems, rates of contribution,
and benefits.
1.
The
social assistance is provided under Law number 6 year 1972 on social welfare
which also contain social security provision.
2.
The
compulsory social insurance is provided under several legislations based on the
membership.
a.
Law
number 11 year 1969 for the Civil Servants, Law number 6 year 1966 for the
Armed Forces, and Law number 3 year 1992 for the Private Employees;
b.
The
social insurance for the civil servants and the armed forces are basically
pay-as-you-go, defined benefits plans; whereas the private employees social
insurance is essentially advance-funded defined contribution plans;
c.
The
civil servants and the armed forces social insurance are financed wholly by the
employee; whereas the private employees social security are financed jointly by
the employer and the employee;
d.
The
benefits of the civil servants and the armed forces are basically in monthly
payments, whereas the private employees are paid in a lump sum.
3.
The
voluntary private/commercial insurance is provided under Law number 2 year 1992
on Insurance, and Law number 11 year 1992 in Pension Fund.
Sometimes
the above-mentioned law contradict and conflicting each other.
III.
TRADE
UNIONS ACTIVITIES IN THE PROMOTION OF SOCIAL PROTECTION
The involvement of Trade Union
in the social protection activities begin in 1972 when the Indonesian
Tripartite Body established, comprising representatives of the government,
workers and employers.
As a result of good cooperation
between the three institutions, they have already issued many joint decrees.
Both workers and employers representatives have strong influence in the
preparation or formulation of decrees. One example of a joint decree that has
been issued as a result of strong influence by the trade union is the issued of
Law no. 3 year 1992 concerning the workers’ social security program, in which
the coverage for workers has been expanded and improved.
At present, the trade unions
actively involve in the formulation of new law on social security system. They
urged the government to continue the internal reforms in the social security
programs, increased their concerned with worker welfare issues and stop
external interferences in the company’s internal affairs that have, so far,
cost the statutory body (PT. Jamsostek) billions rupiah. The law hopefully will
serve as an umbrella over a comprehensive and integrated social security schemes,
which provides protection for the whole labor force “from the cradle to the
grave”. i.e. from maternity benefits to survivor or death benefits.
IV.
INDONESIAN
TRADE UNIONS CONGRESS (ITUC) STRUCTURE AND EDUCATION PROGRAMS
ITUC was declared and established
on February 2, 2003. It is consist of 11 Affiliation from various trade unions
organization.
ITUC structure is as follow:
1. National Convention
2. National Council
3. National Executive Board
The National Executive Board has 6 departments, which are:
1. Department of Organizational
Development and Publication
2. Department of Foreign Relation
3. Department of Education, OSH
and Environment
4. Department of Economy, Wages
and Social Security
5. Department of Industrial
Relation, Law and Advocating
6. Department of Research, Productivity
and Development
The
action plans of Department of Education, OSH and Environment
§ Support curriculum development
for workers education by affiliating national federations members
§ Support affiliating federation
members in organizing workshop, training including assistance in mobilization
for funding support
§ Organize training on Women
Leadership; Collective Bargaining and Negotiation; OSH
§ Set up library and information
center
§ Establish a training center
The
action plans of Department of Economy, Wages and Social Security
§ Design and advocate
standardization on wages system in Indonesia
§ Recommend to government the
application of minimum wages as social safety net
§ Reform of social Security
system and establish Social Security Watch
§ Empowerment of Small, Medium,
Enterprises, informal sector and involve in poverty reduction
§ Set up solidarity fund for
Indonesian workers
§ Increase access of workers for
share ownership
bbINDONESIAaa
