Wednesday, June 13, 2007

House questions govt dividens from Jamsostek

National News - March 13, 2007

Ridwan Max Sijabat, The Jakarta Post, Jakarta

The labor commission at the House of Representatives has questioned the annual dividend paid to the government by state-owned workers' insurance company PT Jamsostek.

Deputy chairman of the labor commission Bursa Syarnubi, who presided over a hearing with Jamsostek management on Monday, said it was unethical for the government to receive annual dividends from Jamsostek even though it was a state-owned company.

"As the government has only Rp 2.77 billion (US$307,000) in initial shares in Jamsostek, it has no right to receive up to 35 percent of the company's annual profits.

"Jamsostek's assets of some Rp 47 trillion belong to workers and the company's income from investments should be utilized to maximize the social security programs' benefits to improve workers' social welfare."

Bursa said the labor commission would ask the government to stop taking the annual dividend and instead add it to the company's assets to allow the company to provide maximum benefits to the workers.

The government received 35 percent, or Rp 22 billion, of the company's profits in 2005 and is expected to receive a similar amount from the company's 2006 profits. The government has received annual dividends from Jamsostek since 1993.

Bursa also said his commission received no reports from the Finance Ministry on what the money was used for.

Jamsostek president director Hotbonar Sinaga said like other state-owned companies, Jamsostek was required to pay an annual dividend to the government and that the amount was decided at its annual stakeholder meeting.

"The amount can vary depending on the company's annual profits," he said.

The labor commission also asked the Manpower and Transmigration Ministry to enforce the social security program to law and make private and state enterprises register their workers with Jamsostek.

"The persuasive approach is no longer relevant as the social security law has been effective for 14 years. The government must start enforcing the law and punish companies that fail to register their workers with Jamsostek," said Bursa.

Almost 90 percent, or 28.9 million of the 34 million workers employed in the formal sector, have been registered with Jamsostek but only 30 percent, 7.7 million, remain active members, due to the prolonged economic crisis.

Hotbonar said Jamsostek had no authority to enforce the law. Instead, it was approaching the informal sector, which employs and estimated 70 million people.

"Jamsostek has enhanced cooperation with provincial and regional administrations to provide social security programs for workers in the construction sector," he said.

"We are also approaching farmers groups and cooperatives, fishing communities and becak drivers to join social security programs."

Hotbonar had earlier pledged to apply good corporate governance and transparency in leading Jamsostek, saying the new management would be transparent in managing its assets, in accordance with a 2004 government regulation on investment.


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