The Asia Pacific Social Protection Week 2023, hosted by the Asian Development Bank (ADB) in Manila, the Philippines, brought together experts and thought leaders to discuss critical issues surrounding social protection in the face of rapid economic and environmental transformations. Among the panellists was Ippei Tsuruga, ILO Social Protection Programme Manager, who shared valuable insights during 'Session 1B: Just Transition' on 26 September.

The session delved into the complex challenges associated with the urgent need to decarbonize our economies. Such a transition promises the creation of new and sustainable jobs, greening of industries, and the potential to bridge development gaps. However, it also carries socio-economic risks that need to be identified and managed effectively to prevent exacerbating existing inequalities and disproportionately impacting disadvantaged groups and sectors.

In this session, Ippei began by shedding light on Indonesia's distinctive challenges in the context of climate change and the need for a just transition. The nation faces short- and mid-to long term challenges. For the short-term challenge, Indonesia, being prone to disasters such as floods, landslides, and droughts, anticipates a higher number of residents being affected by climate-related shocks in the short term.

“For the mid- to Long-term challenge, the Indonesian government aims to achieve net-zero emissions by 2060, necessitating the early retirement of captive coal-fired power plants. This ambitious goal, while environmentally crucial, presents a significant challenge for the workforce employed in these power plants,” he said.

In addition, Ippei underscored the potential role of existing social security schemes in facilitating just energy transitions within this unique context. He highlighted two key schemes: Pension and Employment Injury Benefit Schemes and Unemployment Benefit Scheme.

He further explained that the fist scheme can provide disability and survivor benefits, medical care, and rehabilitation services to those affected by disabilities or fatalities and their families, whether at work or elsewhere. “Thus, ensuring adequate benefits, coverage, capacity in implementation in post-disaster scenarios is vital to providing effective protection.”

Meanwhile, the unemployment benefit scheme can aid workers transitioning from declining sectors by providing temporary cash benefits during job searches. According to Ippei, recipients also gain access to public employment services and reskilling and upskilling programs. Expanding the scheme to include workers in micro-businesses, those with fixed-term contracts, and construction workers would make it even more effective.

In the session, he also acknowledged that contributory schemes, while valuable, cannot address all challenges. By construction, the Unemployment Benefit scheme cannot protect self-employed individuals who supply goods and services to closing businesses in the affected local economy, or unemployed workers with spells longer than six months.

“The current scheme does not provide mobility allowances for workers and their families to find new jobs and lives in other cities. Additionally, employers may face obligations to pay severance in alignment with labour laws when they participate in the Government's initiative to retire power plants. Some of these issues could be potentially addressed by non-contributory social security schemes or subsidy schemes,” he explained.

The panel discussion at the Asia Pacific Social Protection Week 2023 highlighted the importance of proactive planning to ensure a just transition. Responding to the highlight, Ippei shed light on the unique challenges faced by Indonesia and the potential for social protection schemes to play a pivotal role in mitigating the impact of these challenges.

“As we navigate an era of rapid transformation, it becomes increasingly important for governments, employers’ and workers’ organizations to work together to build robust, inclusive and sustainable social protection systems. These systems can facilitate just transitions, while ensuring that no one is left behind during the transition to a more sustainable and equitable future,” he concluded.