About us

Indonesia faces a high risk of geophysical and climate-related hazards such as extreme weather events, while also being affected by slow-onset impacts of climate change, such as more frequent droughts, heat waves and sea level rise. At least 40% of the population are currently estimated to be at (high) risk of such hazards, and their number will increase. In this context, the Indonesian government is currently finalizing an Adaptive Social Protection (ASP) Roadmap, which aims to provide the fundamentals for expanding social protection against risks from natural and climate-related hazards, particularly for population groups living in poverty or with particular vulnerabilities. The Ministry of Development Planning (Bappenas), as well as the Ministry of Social Affairs, the National Board for Disaster Management (BNPB) and the Ministry of Finance were involved in the roadmap’s development, supported by German Development Cooperation, thus far. Consultations and programmatic links with key ministries, such as the Ministry of Manpower, are still outstanding.

The ILO-GIZ project component on social protection and climate change in Indonesia aims to provide the ILO’s stakeholders with analysis and knowledge on the role of social insurance schemes in the context of climate change. In particular, this includes assessing how existing social insurance schemes that are managed by BPJS Employment can potentially mitigate the impact of climate change-related shocks and stresses on income of workers in Indonesia, and how these schemes can be expanded to provide affected workers with better protection through temporary adjustments in parameters (e.g. coverage, benefits and qualifying conditions) and operations.

This study will focus on three schemes under BPJS Employment including an unemployment insurance scheme (Jaminan Kehilangan Pekerjaan: JKP), an employment injury insurance scheme (Jaminan Kecelakaan Kerja: JKK), and a pension insurance scheme (Jaminan pension: JP). The findings and recommendations of this study and related dialogue will contribute to the ASP Roadmap as well as other relevant strategies or policies and support the government’s social protection priorities to: (1) improve coordination and coherence between programmes and the institutions that implement them; and (2) to address gaps in social assistance and social insurance provision to achieve comprehensive coverage across the lifecycle. Partners welcome the further integration of social protection, in particular in view of the contributory or social insurance component not being part of the ASP Roadmap thus far.

Unemployment insurance schemes play important roles across the world in time of crisis in general. Many states implement protective and preventative measures using tax and insurance funds when crisis occurs, and effectively combine unemployment benefits and active labour market policies including partial unemployment schemes. According to ISSA , the major objectives of such schemes are to support enterprises to adapt working hours and staff costs to sudden fluctuations in economic activity and demand; maintain existing employment relations and prevent large job losses; protect the income of workers, thereby reducing poverty and preserving purchasing power and consumption; avoid the loss of skilled and experienced workers at company level, and allow for a rapid return to increased activity once demand increases; and increase solidarity by sharing the costs of the crisis across different sectors. These measures consist of changing one or several parameters including: substantially increasing the budgetary envelope earmarked for partial unemployment and short-term work; relaxing eligibility requirements, such as the reduction in the minimum required number of employees on short-term work in a company; the lowering of the minimum required working time reduction; or the reduction or waiving of waiting periods; extension of eligibility to contract and temporary workers; increase in benefit levels; payment of social security contributions for workers on partial unemployment or short-term work by the unemployment insurance or the government; and active promotion of schemes by social security institutions, and flexibility regarding administrative requirements in the application process.

Similarly, both the employment injury insurance scheme and the pension insurance scheme may play a role as an automatic stabilizer of individual income. As in many countries, these schemes provide for temporary disability benefits, support for rehabilitation and return to work, permanent disability benefits, and survivor’s benefits.

Project outputs

1. Identify climate change-related shocks and stresses or impacts relevant to the three schemes in the past and affected areas (e.g. heat wave, storm, sea level increase).
2. Identify government interventions through the three schemes against the above impacts in the past.
3. Assess effectiveness of the three schemes against the above impacts in the past.
4. Discuss the role of the three schemes against climate change-related impacts.
5. Review GOI's strategy and policy.
6. Formulate recommendations.
7. Facilitate tripartite dialogues on social insurance and climate change.

Duration

March 2022 – June 2023 (16 months)

Finance

Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ)