Self-employed encouraged to insure by state company

Ridwan Max Sijabat, The Jakarta Post, Jakarta

Three ministries have signed an agreement with state-owned insurance company PT Jamsostek to encourage more small- and medium-sized business owners and their workers to take out social security insurance.

The Ministry of Manpower and Transmigration, the Ministry of Industry and Cooperatives and the Ministry of Small- and Medium-sized Enterprises have signed a memorandum of understanding (MOU) with the insurance company.

The agreement would see the three ministries encourage small-and medium-sized enterprises (SMEs) employing tens of millions of workers in the informal sector to register their workers with the social security programs.

Approximately only 80,000 of 60 million workers in the formal sector have to-date participated in social security programs.

Jamsostek has so far netted more than 24 million workers in the formal sector. Their total assets are greater than Rp 49 trillion (US$5.4 billion).

But 7.9 million workers became "non-active" following the 1997 economic crisis.

Director General of Industrial Relations and Labor Standards at the Manpower and Transmigration Ministry Masri Hasyar said after the signing of the agreement over the weekend it was difficult for the government and Jamsostek to net workers in the informal sector because many were self-employed.

"Unlike the formal sector, workers in the informal sector have no industrial relations and their protection is not under the jurisdiction of the labor law," Masri said.

"Their participation in social security programs is voluntary."

Masri said the three ministries would persuade home industries, SMEs and informal workers associations to take the lead and introduce a number of selected programs to their sector.

He said street vendors, traders and food stall attendants could choose from four programs.

Jamsostek's director of planning and information systems H.D. Suyono said his company had given more attention to the informal sector to help the government provide protection for a larger part of the work force.

Suyono said the programs would be financially strong but indicated the strength of protection provided would depend on numbers.

Director of operation and service Achmad Anshori said Jamsostek's strength relied on increasing the number of workers in the programs.

"Fishermen, ojek (motorcycle taxi) drivers, traders in traditional markets and housemaids could join the social security program through their own association," Achmad said.