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Process for pensions payment to Baldia Factory Fire Incident victim families starts

Naimat Khan

KARACHI: Sindh Employees Social Security Institution (SESSI), working under Labour Department of Sindh government on Thursday initiated the process of disbursement of the pension to the legal heirs of victims of Baldia factory fire incident after signing a Memorandum of Understanding (MoU) with the International Labour Organisation (ILO).

The MoU was signed by Abdul Rasheed Solangi, Secretary Labour and HR Department, Government of Sindh and Vic Van Vuuren, Director Enterprise Department of ILO, where as the representatives of labour organizations, ILO and Sindh government were also present at the signing ceremony, held in Karachi.

The funds amount to US Dollar of 5.15 million USD including a margin of 0.25 million USD has been provided by German company KiK Textilien after the agreement with Pakistan Institute of Labour Education and Research (PILER) in 2012 under which the KIK had initially paid US Dollar 1 million for emergency relief during the same year. The incident happened on 11th September 2012.

The ILO, under the Convention 121 – Employment Injury Benefits Convention, has played an important role in finalization of long term compensation, which is now being distributed in the form of pension.

The German company transferred the amount for long term compensation to the ILO and that fund still lies with the ILO, which would provide the part of it to the SESSI for disbursement. During the initial period of implementation of the Baldia Arrangement, whose duration will be determined by the ILO in consultation with the other Parties during Provisional Period, the Fund will provisionally be held and administered by the ILO, in accordance with the ILO’s applicable rules, regulations and procedures and actuarial practice.

During the Provisional Period, the ILO will transfer the required monies from the Fund as authorized and requested by the Oversight Committee, provided the ILO is satisfied that the funds are used in accordance with the Baldia Arrangement and this MOU.

At the end of the Provisional Period, the ILO will transfer the full remaining principal of the Fund to the authorities appointed to be in charge, under the responsibility of the Sindh Government, of the financial management and reporting of the Fund as acceptable to the OC and the Parties to this MOU with due account of the need for financial efficiency, for the exclusive purposes and uses to which the Fund is intended and subject to certification by the ILO of: satisfactory calculation and disbursement of periodic payments, health and allied care and rehabilitation services; delivery of financial advice and actuarial planning services; and all appeals on entitlements resolved and/or time-barred.

Under the MoU the SESSI can invest the funds in secured investments expected to be capable of a foreseeable annual real rate of investment return expected of at least 2 percent and, taking account of the market conditions; without assuming any further financial liability towards the Baldia victims than that provided under this MoU.

An Oversight Committee with tripartite mechanism has been established to look after the process of disbursement of the pensions. Members of the OC included from the government side, Sindh Government’s Labour and HR department and federal government’s Ministry of Overseas Pakistanis and Human Resource; employers’ organizations including Employers’ Federation of Pakistan (EFP) and SITE Association of Industry, Karachi; Workers’ organizations including Pakistan Workers Federation (PWF) and National Trade Union Federation (NTUF); Non-governmental organizations including Pakistan Institute of Labour Education & Research (PILER) and All Enterprises Factory Fire Affectees Association (AEFA). There are Non-member participants and advisers of the OC, which included Technical advisers International Labour Organization (ILO), Finance Department, Sindh Province (Investments). The executing agency will be Sindh Employees’ Social Security Institution (SESSI), where as funding agency is German Federal Ministry for Economic Cooperation and Development (BMZ) in a capacity as financial donor to support administrative costs of implementation of the Baldia Arrangement.

The provincial Sindh government will report to the Oversight Committee on the status of the account of the Fund, namely its certified annual income and expenditure statements, including its investment performance and its demographic development, on the basis if initial actuarial projections used for the ILO Technical Report 2016, and its effect on the remaining balance of the Fund.

The MoU entrusts the provincial government of Sindh to ensure that the disbursement of the funds is made exclusively for the purpose of funding under the gap benefit payments for loss of earnings and medical and allied care and rehabilitation services of the disabled victims and, as applicable, surviving dependents as intended by the Baldia Arrangement and this MOU.

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