Indonesian unions reject changes to social security in Omnibus Health Bill

Indonesian trade unions affiliated to PSI are demanding changes to a draft law (Omnibus Health Law) that threatens the way social security is managed. The changes threaten to take control of workers social security away from workers representatives and contravene constitutional rights.

The Omnibus Health Law includes changes to multiple regulations and is being rushed through without effective consultation with workers and their unions. But PSI affiliates have focussed concerns on the impact the Bill will have on social security.  

 An in-depth study was conducted by Indonesian unions, Serikat Pekerja Perusahaan Listrik Negara (SP PLN), Serikat Pekerja Pembangkit Jawa Bali (SP PJB), Serikat Pekerja Angkasa Pura 1 (SP AP 1), Serikat Pekerja Perusahaan Daerah Air Minum Jakarta (SP PDAM Jakarta), Persatuan Pegawai Indonesia Power (PPIP), Serikat pekerja Badan Penyelenggara Jaminan Sosial Ketenagakerjaan (SP BPJS TK), and Federasi Serikat Pekerja Farmasi dan Kesehatan Reformasi (FSP FARKES R), about the possible impact of the Health Draft Bill on Indonesia’s Social Security System.  

Social security is constitutionally protected 

PPIP Chairperson, Dwi Hantoro, stressed, “Social security is a constitutional mandate. As enshrined in the Article 28 H paragraph 3 of the 1945 Indonesian Constitution, ‘Every person is entitled to social security that enables his/her integral self-development as a dignified human being.’ Article 34 paragraph (2) also says that the state ‘shall develop a social security system for all the people and empower the poor and incapable society in accordance with human dignity.’”.  

With both articles as the preamble, the Indonesian Parliament and government stipulated the Law No. 40 of 2004 on National Social Security System. Further, Law No. 24 of 2011 on Social Security Administrative Body states that the National Social Security System must be implemented by Social Security Administrative Body for Health and Employment (BPJS Kesehatan dan Ketenagakerjaan). 

Representatives from PSI affiliated unions in Indonesia

On the account that social security is mandated by the Constitution to provide services for all Indonesian people, Dwi Hantoro added that it must be under direct responsibility of the President.  

Possible setback to Indonesia’s Social Security System 

Chairperson of SP BPJS TK, Ahmad Edi Komaruddin agrees and adds that there has been significant progress in terms of implementation and management of social security in Indonesia since the transformation of PT Jamsostek to BPJS. “This progress can be seen in the amount of fund that BPJS manages and the number of subscribers.  Currently, the fund is as much as IDR 639 T (41.6 billion USD) and subscribers are over 55.4 million people. These numbers show how the company gained progress compared to when it consisted of two different companies, PT ASTEK and PT Jamsostek, under the Ministry,” stated Komaruddin.  

“The Health draft bill will force BPJS to be under a ministry again. Returning BPJS to the supervision of a ministry will be a setback in country's social security system. The management and use of funds entrusted by the people will be under a ministry and this can potentially make BPJS non-independent,” Komaruddin pointed out.  

Social security is a constitutional mandate. As enshrined in the Constitution, ‘Every person is entitled to social security that enables his/her integral self-development as a dignified human being'...
-Dwi Hantoro, PPIP

Between 1977 to 2014, PT Astek and PT Jamsostek managed only IDR 151 T (9.8 billion USD) of fund, 216,593 company participants and a total 16,791,397 individual participants. In comparison, PT BPJS Ketenagakerjaan, in a span of only eight years (2014 to 2022), increased funds by 317% to IDR 630 T (41 billion USD) and increased company members by 239% (734.891 companies) and active individual participants by 113% (35.8 million people).  

Social security fund belongs to its members 

Chairperson of SP AP 1, Jemmy Pongoh, said that social security fund is a trust fund belonging to all participants. It consists of contributions including their investment income managed by BPJS. BPJS is a legal entity established to administer the social security program and to provide protection for all Indonesian people. “Therefore, the administrative body’s structure and the trust fund are strictly regulated by laws and regulations. The social security fund belongs to the participants so that BPJS could expand its membership and increase participants’ contribution independently,” Jemmy Pongo explained.  

Jemmy also asserted that the social security management and administration body have functions distinct from other stakeholders in implementing the social security program. In Indonesia, the social security administration uses the pragmatisch  principle along with many elements involved in it. The government does not have any interventions in the administration and implementation of national social security. The operational cost is charged to the participants i.e. companies and workers. 

“There is also a plan to change the composition of the Supervisory Board by reducing the number of workers and employers’ representatives. They will be replaced by representatives of the government...,” - Jemmy Pongoh, SP AP 1  

“Companies and workers have significant impact on the progress of the national social security system as Indonesia is currently unable to provide social security for its people using its state budget. However, in the implementation, government, employers, and workers have an integrated function. Returning BPJS to a ministry’s supervision through the Health draft  bill will only disturb the distinct function of the stakeholders,” added Jemmy Pongoh. 

“There is also a plan to change the composition of the Supervisory Board by reducing the number of workers and employers’ representatives. They will be replaced by representatives of the government. This plan does make sense. There must be more workers and employers’ representatives because the fund belongs to the workers and employers. It does not make any sense to reduce the number of workers and employers’ representatives in the Supervisory Board,” Jemmy Pongoh further explained.  

Separate funds, independent institution 

On another note, Chairperson of FSP FARKES R, Evi Krisnawati, underlined that BPJS’ position is outside of and separated from the state administration and state asset administration. BPJS’s operational fund originated from companies and workers’ contribution. “BPJS’ initial capital stipulated in Article 41 paragraph (1) point (a) of Law No. 24 of 2011 on BPJS to be IDR 2 Trillion (130.2 million USD) for each BPJS (Health and Employment). The initial capital is a separate state asset and originated from the State Budget (APBN),” Evi averred.  

The initial capital is also the state’s capital equity to the company. BPJS shall separate BPJS assets and social security funds assets. BPJS for employment is a public legal entity pursuant to the law. It is owned by the public whose management is independent and shall be responsible directly to the President.  

Re-elected Chairperson of Serikat Pekerja PLN (SP PLN), Muhammad Abrar Ali added, “Indonesia has many sui generis or independent institutions. These include Bank Indonesia and Financial Services Authority (Otoritas Jasa Keuangan), Deposit Insurance Corporation, or Indonesian Eximbank. BPJS is one of the sui generis (independent) institutions in Indonesia.” 

 Potential impact on social security program implementation  

The Health draft bill can potentially affect BPJS program and fund management. Currently, the social security fund and BPJS’ assets are separated. As the new Health draft bill proposes to put BPJS under a ministry, it will disturb the State’s financial situation and social security system. The alternative is for the State to cover social security (100%) using the state budget. However, this alternative will only cause more burden on the State budget. 

“Implementation of social security program may not function best under a ministry. There are too many bureaucratic processes as well as different interests of political parties around a ministry that will affect the implementation and administration of social security,” added Abrar.  

The unions also said that incorporating BPJS Law, specifically provisions on BPJS Ketenagakejaan into the Health Law is wrong. The BPJS Law regulates social security system while, Health Law regulates national health system.  

  1. Muhammad Abrar Ali, Chairperson of Serikat Pekerja PLN (SP PLN) +62 811-6562-973 

  1. Agus Wibawa, Chairperson of Serikat Pekerja PJB (SP PJB) +62 896-8750-0696 

  1. Jemmy Pongoh, Chairperson of Serikat Pekerja Angkasa Pura 1 (SP AP 1) +62 812-4228-1276 

  1. Abdul Somad, Chairperson of Serikat Pekerja PDAM Jakarta (SP PDAM Jakarta) +62 813-9877-0550 

  1. Dwi Hantoro, Chairperson of Persatuan Pegawai Indonesia Power (PPIP) +62 812-8643-9018 

  1. Ahmad Edi Komaruddin, Chairperson of Serikat pekerja BPJS Ketenagakerjaan (SP BPJS TK) +62 812-5812-975 

  1. Evi Krisnawati, Chairperson of Federasi Serikat Pekerja Farmasi dan Kesehatan Reformasi (FSP FARKES R) +62 812-8858-691 

Review on the Academic Paper and Health Draft Bill