Implementation of the Agreement concerning additional employment injury benefits to the victims of the Ali Enterprises fire and strengthening of the employment injury insurance and benefit system in Sindh Province
On 11 September 2012, more than 255 workers were killed and 55 injured in the fire at the garment factory in Baldia, Karachi, considered as the most serious industrial accident in Pakistan’s history. At the request of the Government of Pakistan the ILO from 2016 onwards, worked closely with international and national stakeholders to reach an agreement for the financial settlement of additional and voluntary compensation to the beneficiaries provided by KiK Textilien.
At a glancePartners
Federal Ministry of Overseas Pakistanis and Human Resource Development (MOPHRD), Sindh Department of Labour and Human Resources, Sindh Employees' Social Security Institution (SESSI), Federal Employees Old-Age Benefits Institution (EOBI), Workers’ Welfare Fund (WWF), Employers’ Federation of Pakistan (EFP), Sindh Industrial Trade Estate (SITE), Pakistan Workers’ Federation (PWF), National Trade Union Federation (NTUF), Pakistan Institute of Labour Education & Research (PILER) and Representatives of the victims of Ali Enterprises Fire.
German Federal Ministry of Economic Cooperation and Development (BMZ), KiK Textilien, IndustriALL Global Union and Clean Clothes Campaign
BackgroundOn 11 September 2012, more than 255 workers were killed and 55 injured in the fire at the garment factory in Baldia, Karachi, considered as the most serious industrial accident in Pakistan’s history.
Against this background and at the request of the Government of Pakistan the ILO from 2016 onwards, worked closely with international and national stakeholders to reach an agreement for the financial settlement of additional and voluntary compensation to the beneficiaries i.e. the injured victims and the dependents of the deceased workers, provided by the main buyer from the factory i.e. KiK Textilien. This process was supported by social partners, international partners and the Federal German Ministry for Economic Cooperation and Development leading to an agreement of an additional amount of US$ 5.15 million for long term compensation (“Baldia Arrangement”) to ensure that regular benefit payments go to the beneficiaries in line with the Employment Injury Benefits Convention, 1964, (No 121) and relevant national and provincial legislation.
Project ObjectivesThe immediate objectives of the project are
- Organized oversight and delivery mechanism for the provision of compensation cash benefits, health and allied care and rehabilitation, namely through SESSI, to work injury victims of the Ali Enterprises fire victims, guided by ILO recommendations drawing upon Sindh legislation and the Employment Injury Benefits Convention 1963 (No. 121).
- Reinforced national and provincial capacities, in particular in Sindh Province, towards the longer term objective of the effective coverage compliance, delivery and sustainability of employment injury insurance and protection to all workers in Pakistan including for women and persons with disabilities.
The immediate objectives will in turn contribute to the development objective:
- The working conditions in terms of the social protection for workers in case of work injury will be significantly improved in Sindh Province, with possibility of spill over to other provinces, through the reinforcement of capacities and the architecture of the Pakistan authorities and institutions in charge of employment injury insurance and protection.
Contribution to SDG and other frameworksThis intervention contributes to the SDG target 1.3 aiming at “implement[ing] nationally appropriate social protection systems and measures for all, including floors, and by 2030 achieve substantial coverage of the poor and the vulnerable”, recognizing the SDG indicator 1.3.1 “all employees covered in case of work accidents”. The intervention further supports the work towards achieving SDG target 8.8 on safe and secure working environments for all workers.
The project also supports the achievement of the Decent Work Country Programme III (2016-2020), in particular Priority Area 4 concerning extending social protection floors.
- Establishment an operational Oversight Committee for the supervision of the Baldia Arrangement;
- SESSI administrative and financial reporting capacities supported for the delivery of periodical benefits to Baldia Arrangement beneficiaries
- Reinforced policy and financial planning for the employment injury insurance and benefits provisions administered by SESSI
- Reinforced social dialogue for an improved tripartite governance of SESSI
- Streamlining and integration of principles enshrined in C121 and enterprises obligations towards coverage and dues to SESSI in synergies with other promotional and advocacy activities targeting workplaces, including small and medium-sized enterprises (SMEs) and multinational enterprises
- Consultations for legal reforms to strengthen SESSA and to achieve better policy coherence and coordination (e.g. in case of death at work via SESSI, EOBI, Workers Welfare Fund, Workers Compensation Act), guided by C.121 and other international labour standards
- Development of a pilot for an IT-based SESSI registration and contribution payment tool to facilitate access to coverage under SESSI by SMEs
- Linkage established between employment injury insurance/SESSI dimensions and the Multinational Enterprises and Social Policy Declaration
- Policy brief on gender case study
- Technical assistance to set-up of a Trust Arrangement for the compensation to the victims of Ali Enterprises
- Temporary structure for good governance and transparency, with clear roles and responsibilities, namely an Oversight Supervisory structure, for decisions for the planning and delegation of the payment of additional benefits to the Ali Enterprises fire victims under the Arrangement signed on 9 September 2016
- Individual counselling to victims for them to better understand their vulnerabilities, concerns and needs and provision of guidance and channelling to possible service providers for their different needs other than for the compensation, health and allied care and rehabilitation
- Recommendations to improve service to workers (claims process, benefit payments)
- Review of current monetary value of benefits and conduct actuarial studies
- Development of an internal SESSI handbook and IT Tool for handling of long-term benefits, medical assessment of permanent disability due to work accident and work-related diseases;
- Gaps analysis and legal recommendations relating to the promotion of the ratification of C 121;
- Recommendations on how to reinforce the auditing/inspection system for Social Security of work injury insurance, including opportunities for synergies, cooperation and coordination with the OSH and labour inspection system in Pakistan
- Facilitation of exchange and experience between SESSI and other provincial employees’ social security institutions to enhance the national capacity on employment injury benefits