Employment Injury Insurance: A Boon for the Labour
Employment Injury Insurance Programme (EIIP) is an insurance mechanism for providing the financial benefits to the employees injured in the workplace during the course of employment. This insurance in essence covers bodily injuries, accidental death, and occupational diseases. The EIIP can do more for well-being of the workers and/or their dependents than a conventional insurance policy in that it addresses the issue of in-kind health care and the rehabilitation of the injured employees in the financial, medical and vocational formats.
Typically employment injury is a built-in broader coverage under the employer liability insurance in some Asian countries; the EIIP has successfully been recognized for protecting workers’ rights and establishing harmonious industrial relationship, which is ultimately leading to the sustainable development of the nation.
Moreover; the EIIP is administered on low cost and no fault basis which means that the premium charged would be the least and the employers would be strictly liable. Strict liability is the liability without committing any fault on employer’s part in incident of worker’s injury, and is imposed by law on the employers due to their socially and economically privileged stands.
STATE OF WORKPLACE ACCIDENTS IN BANGLADESH
A recent statistic from International Labour Organization (ILO) shows that every year 2.3 million people (6,300 per day) die from workplace accidents and occupational diseases and the resultant economic loss amounts to 1.25 Trillion (roughly 04% of World’s GDP).
In Ready-Made Garments (RMG) sector of Bangladesh the recent-past incidents of bodily injuries and death toll, particularly in the collapse of Rana plaza and in the fire of Tajreen fashion have malignantly tainted the country’s image to the buyers’ community and subsequently the pressure group “Accord and Alliance” has raised their voice anew for the safety and security of garments’ workers in the workplace.
In the regards the concern from the EU and the USA, the top consumers of our RMG products, needs to be addressed meticulously for sake of the survival of the industry. Optimistically enough, the government, till date, has taken corrective measures in order to upgrade the working environments of more than 16,000 RMG factories for regaining the consumers’ trust.
The financial compensation package and rehabilitation programme injured workers has to be recognized with due emphasis. Moreover; the concerned stakeholders should lend their hands toward the public agencies so as to ensure the safe place, safe plant, and safe system for the country’s workforces, the nation builder.
ROLE OF RMG IN SOCIO-ECONOMY OF BANGLADESH
Bangladesh’s ready-made garment (RMG) industry has set its export target of USD 50 billion by the year 2021. A ray of hope has already been observed in export statistics of Bangladesh Bank for the FY 2012-2013 where the RMG industry encompasses 80.1% (Knitwear-45.7% and Woven garments-34.9%) of country’s exports and become the second largest contributor of our gross domestic product (GDP). The expert views are that the set target is achievable if a few initiatives in legislative as well as infrastructure development are implemented for making sure a better working environment.
THE EIIP ACROSS THE GLOBE
Majority of the lower or middle income countries whose economy more or less banks upon RMG exports have already adopted EIIP as seen in Cambodia, Malaysia, Thailand and Korea where they have either adopted EIIP or updated the employers liability insurance in to a national insurance scheme for the labors.
With regard to financial aids for the affected families, the existing compensation scheme in our country, no doubt, is inadequate in terms of purchasing power of taka due to high inflation. A fixed amount of BDT 100,000 (USD 1,250) is paid for death and BDT 125,000 for permanent total disability and the payout for temporary disability and illness are far below the actual medical expenses usually incurred as it is calculated for the period of their disablement or one year whichever is less.
The role here played by BGMEA is in no way satisfactory. That is why; the state intervention is much sought-after. In the UK, the government has effectively shifted its responsibilities to insurance industry making it compulsory for the employers to have employers liability insurance for a liability of at least £5 million under Employers’ Liability (Compulsory Insurance) Act 1969.
ILO WORKSHOP ON EIIP
A Stakeholders’ workshop on “Employment Injury Insurance Programme” (EIIP) organized by ILO country office for Bangladesh at the Spectra Convention Centre, Gulshan, Dhaka on 24th January 2015 has become a platform for exchanging views and experiences regarding the workplace injuries, accidents and fatalities recently experienced in Bangladesh and particularly in the Ready-Made Garments sector.
The experts from ILO Geneva office has illustrated the technical aspects, designing and feasibility of EIIP for Bangladesh which may be covered under future national legislations. Among other participants, the labor and employment secretary of Government of Bangladesh (GoB), Mr. Mikail Shipar says that the financial benefit is not a charity by the employers but a right of the injured employee.
The contribution in the proposed EIIP in addition to the premium paid by employers for existing group insurance scheme (GIS) will be burdensome due to the market state, says Mr. Shahidullah Azim, Vice President of BGMEA.
EIIP AT A GLANCE AS PROPOSED BY ILO
The coverage encompasses all workers from the first day of employment. The benefit offered for the income protection includes temporary disablement, permanent disablement for the workers and cash benefits for dependents and funeral expenses for the deceased workers.
Furthermore; the in-kind heaths care for treatment and rehabilitation for the injured workers. The rate of contributions varies by industry (across different countries and for example the rate of contribution paid by the employers in Cambodia and Malaysia are 0.80% and 1.25 % respectively. Roughly the contribution to be paid by employer for a worker will be BDT 03 per day (£1 dollar per month), says senior actuarial advisors of ILO, Mr. Gilles Binnets. The EIIP effectively bland the short term benefit (cost of injuries in the year occurred plus administrative expenses) with the long term benefit with the accumulation of a fund at which benefit are paid over decades in the event of permanent disability.
ADMINISTRATION OF PROPOSED EIIP
As practiced worldwide, a public agency will coordinate activities/performance by applying the law and regulation formulated. The public agency will operate through regional offices each of which will be composed of two units 1) Coverage of Employers and Workers Department, this department is responsible for the supervision of registration for the employees collection of contribution, maintaining workers’ database, compliances with the regulations and conducting labor inspection, 2) Claim Process Department, It is responsible for paying cash benefit, healthcare services, implementing rehabilitation programme, supporting the victims and handling complaints and appeals. Likewise; the central office is responsible for monitoring the regional offices and will perform the statistical analysis, finance and investment, financial reporting, IT related work, and quarterly reporting to ministry of labour.
ROADMAP FOR EIIP IMPLEMENTATION IN BANGLADESH
Like another low/middle earning countries of the world, some forms of compulsory social security system must be in place in Bangladesh for providing benefits to the injured workers.
The concerned authority should arrange dialogues among the employers, workers, government bodies and buyer groups. It is expected that a national dialogue on this timely issue can result in the easy solution forth the implementation of EIIP in Bangladesh. In this regard, ILO experts are ready to offer all types of technical as well as consultative supports.
To sum up, Bangladesh to be a middle-income country as per World Bank’s Human Resource Index and for smooth continuance of RMG export to the EU and the US markets, the safe and secure workplace together with compensation package for the injured have to be made sure for the nation’s bread earner 4.1 million RMG workers (the number to be doubled in the next 05 years).
So, the introduction of EIIP initially for the garment’s workers under a public agency in collaboration with private sector insurance companies can make headway for the welfare of the labour where the financing of premium can justifiably be shared by employees, employers, government, and the consumers who are deemed to be indirect employers.
Resources: Employment injury insurance and protection
Mr. Abdul has been in insurance sector of Bangladesh for a decade. He is an Associate Member (ACII) of Chartered Insurance Institute of London.