Background

The Adaptive Social Protection (ASP) approach seeks to bring together social protection, climate change adaptation and disaster risk management sectors to provide comprehensive protection to all in the face of climate risks. The ASP approach traditionally puts more weight on social assistance or non-contributory schemes as mitigation measures over social insurance. This report adds value to discussions on the ASP approach as it explore the role of social insurance or contributory schemes. Social insurance schemes can be recognized as part of the strategy mix that is taken to manage such risks, especially fill the coverage gap for ordinary residents, especially middle-class workers. As Indonesia progresses in developing its first ASP Roadmap, it is an opportune moment to stocktake the potential of social insurance schemes like the Pension scheme (JP), Employment Injury Insurance Scheme (JKK) and the Unemployment Insurance Scheme (JKP) in protecting workers during and after hazards, complementing social assistance schemes that primarily target the very poor.

ILO-GIZ project “Building Social Protection Floors for All - Phase II” conducted a study to explore the potential of social insurance schemes in mitigating the impacts of climate change-related shocks and stresses on incomes and employment 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. The study mainly focused on three schemes namely the unemployment insurance scheme (Jaminan Kehilangan Pekerjaan: JKP), an employment injury insurance scheme (Jaminan Kecelakaan Kerja: JKK), and a pension insurance scheme (Jaminan pension: JP).

In collaboration with the Government, workers and employers and with financial supports from GIZ and the Government of Japan, the ILO has facilitated capacity building and policy dialogues on social protection and climate change since early 2022. The ILO organized a webinar on social protection and climate change for tripartite stakeholders to build knowledge base on 24 November 2022, and shared a concept note for further discussion with Bappenas through Deputy Minister for Population and Employment on 23 April 2022. The ILO further discussed scopes and approaches with Bappenas through Directorate of Poverty Reduction and Community Empowerment on 2 June 2022. The research team shared draft reports and received valuable inputs from Bappenas through Directorate of Population and Social Security on 13 October 2022, BPJS Employment on 13 December 2022, BNPB from 16 December 2022, and tripartite stakeholders at the online consultation meeting on 19 January 2023. This study could not have been finalized without all stakeholders.

Objectives

1. Facilitate policy dialogues among tripartite representatives and experts on the potential of social insurance to mitigate climate shocks as well as potential challenges of workers and businesses;
2. Share results of the study and recommendations to Adaptive Social Protection; and
3. Facilitate discussion on follow-up actions to be taken by the Government, workers and employers (inputs to RPJPN and RPJMN).