Social Security comes a step closer for millions of Indonesian workers

Posted: August 15, 2011 in Economic Development, Indonesia
Tags: , , , , ,
The legislative building complex in Senayas, J...

Indonesia's parliament. Image via Wikipedia

This week an 18-month campaign passed a major milestone as Indonesia’s National Court ruled that the administration of President Yudhoyono was not constitutionally permitted to ‘sit’ on the 2004 Social Security law year after year without passing its enabling regulations.

This is the outcome of a political and legal campaign of the Social Security Action Committee (known by its Bahasa Indonesian acronym KAJS), spearheaded by the metalworkers’ union FSMPI.

Social security has been available to those employed in the public sector and civil sector but many workers in Indonesia are self-employed or work in the informal sector, so this is a large extension of the coverage of social security. The comprehensive legislation also includes healthcare and workers compensation. The Government, conscious of the cost, would have liked to defer this but will now have to act.

New focus: Accountability

Meanwhile lawmakers in the Indonesian parliament have been working on a new bill that requires the four existing social security providers to meet higher standards of accountability. This law looks set to pass by October. Currently there are four funds (the largest being Jamsostek and Taspen) which are limited liability companies wholly owned by the Government. It seems there is concern that the amount of assets under management might become tempting to future politicians.

The campaign is already shifting to a new phase: Ensuring that the new social security fund or funds are set up with a high level of transparency. KAJS has wasted no time, immediately teaming up with Indonesia Corruption Watch (ICW) and staging a demonstration outside the Social Security Administration building in Jakarta on Friday to lobby for the social security funds to be changed into public bodies now, which would require them to openly publish their accounts.

Interesting times still ahead but working Indonesians had a major victory this week.

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  1. […] once this is achieved, a further issue is deciding who will pay the insurance premiums and setting up an framework that ensures that the body holding the funds sticks to its purpose and […]

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