Drive toward total national insurance

Sok Chan

While the construction sector is booming in the Kingdom and has been attracting high numbers of young workers, it also suffers one of the highest rates of occupational injury and illness.

Government wants benefits for formal and informal workers

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While the construction sector is booming in the Kingdom and has been attracting high numbers of young workers, it also suffers one of the highest rates of occupational injury and illness.

However, the government’s social security insurance has not yet covered informal workers who need it the most to increase their potential to fully participate in social-economic development.

The National Social Security Fund (NSSF) was established by the government in 2007 and was implemented in late 2008.

It was founded to manage the protection of social security in conformity with the National Law on Social Security and the Provisions of Social Security.

Income protection

Social security insurance is extremely important in providing income protection for Cambodian workers and was designed to prevent them from falling into poverty forever.

It aims to play a vital role in contributing to the eradication of poverty, involving the well off helping the low-paid, the healthy assisting the sick, the disabled or victims of miscellaneous accidents, and the young aiding the aged.

This move is intended to help people across society to live contented lives and ensure the maintenance of social stability and harmony.

Although the construction sector is considered to be hazardous work, construction workers, especially those hired informally, have not yet received access to the NSSF, to gain medical support, general healthcare, accident coverage or a pension.

A report from the Land Management, Urban Planning and Construction Ministry, shows that the construction sector employs around 230,000 to 260,000 unskilled and skilled workers a day. In Phnom Penh alone, there are around 160,000 to 180,000 people at work in the industry on any given day.

From 2000 to May 2019, Cambodia recorded 45,265 projects valued at $44.5 billion, according to the Land Management’s detailed report.

However, in the first four months of 2019, 1,420 real estate projects with a total value of $2.7 billion were approved, representing a sharp year-on-year increase of 67.3 per cent from 1,171 projects over the corresponding period last year.

‘Jobs are risky’

“Construction jobs are risky and it is easy to fall from a height if we do not pay much attention or are not careful,” says Sorn Sina, 30, a construction worker in the residential project in Kambol district, Phnom Penh.

Sorn says that because he possesses few construction skills, he can only earn around $9.30 a day – about $280 a month – while skilled labourers can earn more than $400 a month.

“I have yet to meet any difficulties in our family because we have only one child. What we have to spend money on is only just the school fee for our kid, daily food, medicine or medical checkups and accommodation,” Sorn adds. “For now my family’s living standards are not very low, but we do not know what will happen in the future.”

‘Hospital fees’

When asked whether he knows the NSSF is offering cards covering medical care and pensions from the government, Sorn says that he is aware of it, but he does not have either one. He does not know whether the contractors or the company he works for registered his name in the NSSF’s system.

“If we have the NSSF’s [health insurance] card, it would help our living standards because we will not need to pay hospital fees when we get sick or injured at work,” Sorn adds.

The establishment of the NSSF is a critical step that helps people to get essential services. However, the NSSF does not yet cover informally hired workers who need them the most.

People in the informal economy, including construction workers and domestic workers, make up 83 per cent of Cambodia’s workers. Informal workers are responsible for Cambodia’s 7 percent economic growth over recent decades.

‘Social protection’

“They (informal economy workers) have escaped extreme poverty, which demonstrates the massive success of Cambodia’s social achievement so far. Therefore it is necessary that Cambodia now invests in a social protection scheme for informal workers and then works towards universal social protection for all Cambodians,” says Lim Solinn, country director of Oxfam in Cambodia.

“Why such a big investment?”she asks. “Without this investment that is aimed at protecting vulnerable informal workers from social and economic as well as climate shocks, those workers cannot sustain their escape from poverty and remain at risk of falling back into poverty.”

Lim adds that access to modern health and having accident coverage as well as pension schemes, through government social assistance and social insurances programmes, will bring a huge positive change to improving the living standards and reduce inequality in Cambodian society.

She says that it won’t just lift all Cambodian out of multidimensional poverty but it will increase the ability of those informal workers to strive and contribute more to Cambodia’s economy and social wellbeing.

‘Injuries, disabilities, death’

Sok Kin, president of the Building and Wood Workers Trade Union Federation of Cambodia, says the law on the National Social Security Fund covered all formal workers in various sectors. However, it has yet to cover informal economy workers, particularly in the construction sector. “A lot of construction workers have yet to receive social assistance and social insurance programmes from the government, so it is still an issue for the construction workers and contractors to this day,” Sok adds.

“A lot of construction workers suffer injuries or disabilities or even death during their work on the construction sites, but they are not in the insurance scheme of the NSSF, so their families suffer and their living standards plummet. Their children’s future is not good,” says Sok.

“We should strongly pressurise construction contractor’s companies or their parent companies to register their staff in the NSSF’s system,” Sok adds. However, the NSSF’s procedures are not strong enough to force the construction contractors or companies to register with it.

As of August this year, around 241 construction companies with a total of 11,455 construction workers had registered with the NSSF, according to its report.

‘Security net’

NSSF spokesman Heng Sophannarith agrees that the government now registers only formal economy workers Some companies register their construction workers themselves but the system has yet to widely cover informal construction workers.

He adds that some construction workers are freelancers. It often means they work every other day and their employers do not register their names, so they cannot receive any NSSF benefits. Heng adds that the informal construction worker will also be included when the new law on the NSSF is ratified by the National Assembly, ensuring they are covered.

Earlier in August, Prime Minister Hun Sen approved the draft law to expand the NSSF to provide a financial security net for civil servants and for those in the private and informal sectors.

The purpose of having a social security fund law in Cambodia is to ensure economic and social stability for the people and improve their welfare and standards of living.

“It covers four sectors: pensions, healthcare, employment risk and unemployment.” the statement says. “It is for people in the public and private sector who are protected by the Labour Law, including those in the informal sector, such as domestic workers and also the self-employed.”

‘Voluntary registration’

With the new NSSF’s law, informal economy workers can either register with the NSSF through their company or they can register by themselves because the new law also allows voluntary registration, Heng adds.

“If they have the NSSF’s [health insurance] card, they can use the services free of charge,” Heng says. “There are two types of NSSF health insurance cards. If they pay the fee for the service, they will get a daily allowance if they are in hospital.

“However, if they get an equity NSSF card, they receive only basic medical care services,” he adds.

Heng adds that so far, around 2 million members have registered with the NSSF. Those included are only civil servants and formal workers. More than 70,000 NSSF cardholders used the service at the NSSF’s hospital partners in July this year.

Self contractors

“We will bring in universal health coverage in 2025 to enable the general people to have insurance. When the new law is ratified, formal workers will be able to claim a pension and they will be obliged to join the scheme,” Heng adds.

BWTUC’s president says that the association now has more than 8,000 members across the country and there are about 40 unions.

He says he will use BWTUC’s business certificate to register with the NSSF.

Therefore, it will provide advantages to his members.

“We urged the NSSF… to enable the workers and self-contractors to receive the NSSF like other sectors,” Mr Sok adds.

Oxfam’s country director in Cambodia, Solinn Lim, however, says that authorities have to change their mindsets and think of the NSSF for informal workers as well as for all Cambodians as an investment.

“It is complex but it can be done,” she says.

‘’Lot of anxiety’

Lim adds that Oxfam stands ready to support the government to take on one of the first steps, which is to map out all forms of informal workers, their dynamics and needs, and propose a strategy and mechanism to enrol them into the already existing NSSF scheme. The improvement of the NSSF is an important to step toward the implementation of social protection floors.

“What the government should do right away is to raise public awareness about the NSSF. There is a lot of anxiety and concerns about what these schemes are and how they will materialise as well as the quality of NSSF services,” Lim adds.

“I understand that it will be a huge and challenging undertaking but this can be achieved with greater collaborations across stakeholders including government line agencies, the private sector, NGOs, employees and employers,” Lim stresses.

She adds that the government should make it mandatory and they should incentivise employers and employees to co-invest in full coverage for informal workers.

More work can be done by the government and other stakeholders to raise citizens’ and employers’ awareness of the importance of this investment – that it is for citizens’ benefit to co-invest in this and for the private sector that such investment makes business sense for them in terms of productivity and the sustainability of their operations.

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