The Dangerous Reality of Laborers Changing Ethiopia's Landscape
Making just below 100 Birr a day, Derbie Getie is a daily laborer and he feels he is a lucky man. Most of his friends can’t even secure such a laborer position. Known as a hand-to-mouth wage and with little savings at home, he had been hired by a construction company for the building of a 10 storey building.
“My friend is disabled having overworked his body in such a position and getting into an accident and I fear that might also be my fate”, the 34-year-old said. “His employer just covered his medical bills and refused to give him any other compensation and he is physically unable to work”.
He sees little possibilities for his own to escape such a hard-life of no possibilities.
“I have heard there are few contractors who buy insurance coverage for their employees, but that privilege has not been extended to the lower end of the workforce,” he complained.
In Ethiopia, employers are liable for a work-related accidents and occupational diseases. The nation’s civil code also makes employers liable for occupational diseases and injuries, even death.
However, there is no legal framework that obligates employers to buy insurance coverage for their employees in case of job-related injuries.
“There is no law forcing employers to buy an insurance policy to compensate their workers for any death or injury while on duty. So most businesses prefer paying large sums of money after the occurrence of the accident,” Meseret Bezabih, CEO of United Insurance, told Financial Perspective (FP).
A policy that covers medical expenses and loss of income for employees who are injured on the job is called workers' compensation insurance, which is commonly referred as workmen compensation by most firms in Ethiopia.
Although insurance companies have been selling such products, the demand has been significantly low compared to the growth in business activities and establishment of thousands of companies with workplace safety concerns and a higher prevalence of injuries.
Last fiscal year, the country’s 17 insurance companies wrote a premium of an aggregate ETB11.1 billion from both life and non-life lines of businesses. Of this, the share of workers compensation insurance policy is below five percent, while it is over 50 percent for motor insurance- which accounts for the lion share of the firms’ portfolio ever since it became compulsory almost eight years ago.
“It is unfortunate that many businesses fail to understand the importance of buying this policy,” says Tigistu Shiferaw, CEO of Oromia Insurance, which has written a premium of ETB7 million from workers’ compensation insurance policy, accounting for 1.6 percent of its gross premium.
“Construction activities have expanded, industries engaged in different lines have been opened and several other businesses have been opened. But though such a development should have been enough reasons for the rise in demand for the policy, the response from investors has been disappointing,” he added.
A study conducted by Yoseph Merkeb et al. last year concluded that nearly half of the labor workers in Ethiopia experienced an occupational injury, which was more prevalent among daily laborers of construction sites and whose working place was at the Addis Ababa city administration respectively.
“Being male, working more than eight hours per day, lack of personal protective equipment, lack of supervision, and lack of training about occupational health and safety had increased odds of occupational injury in Ethiopia”, the study said.
In fact, the horrifying experience of Derbie, whom FP met without wearing safety materials in a hectic construction site, can be evidence to show the situation is becoming more concerning than ever.
“None of us wear personal protective equipment and being injured is a part of our daily life and no one cares about our safety. We are used and disposed of when not needed or are not good enough to perform such a backbreaking job,” he says.
With the absence of a comprehensive national surveillance and reporting system for occupational injury, evidence suggests that the frequency of work-related accidents, illnesses, and even deaths is underestimated in Ethiopia.
“Most workers hired by companies with a higher prevalence of job-related injuries have low awareness about their rights of being compensated after sustaining an injury. Taking advantage of such a situation, some employers don’t report when their employees are injured and they try to settle this by making a small compensation or covering medical bills,” Tigstu observed.
“Such worries can be avoided easily by sharing the risk with insurance companies, which only requires buying workers compensation insurance policy.”
The cost of the policy may vary based on the level of risk involved in the job.
Certain jobs with a higher risk of injury and the death of the labor might be required to pay more, while the reverse is true for low-risk jobs. It also depends on the employee’s job profile, experience, and the claim history of the client.
Like any other policies, workers' compensation also requires premiums, with the employer bearing the cost. Employees, in case of unfortunate circumstances, get coverage from medical expenses to compensation to a family if the employee dies. But the standard amount of compensation paid by insurance firms ranges from ETB10,000 to 150,000. The policy also excludes any liability by accident or disease resulting from war, riots, and strikes or due to involvement in political affairs.
“It is very affordable compared to most insurance policies in the industry,” says United’s CEO, Meseret, who argues that the government must come up with a law that will make workers compensation mandatory, at least for those businesses with a greater risk of job-related injuries.
“Considering the capacity of industries and construction companies, the premium rate is very low and if, for instance, we compare it to motor insurance, the rate is so low,” she adds.
Many countries, including neighboring Kenya, require employers to buy an occupational injury insurance policy, which is almost similar to workers' compensation, to cover the liability of employees injured at work or who contract an occupational disease.
“The time when businesses would be required to display their worker compensation policy should not be far,” Meseret reflected, hopeful things will change before the names of more preventable victims pile up and the sector is forced to act.
“Making this policy mandatory should be the priority of the government to keep both employees and employers safe.”