MPS STOP ESRIC’S 40-YEAR MONOPOLY

MBABANE – For the past four decades, ESRIC has been the sole insurer for the compensation and medical treatment of workers who suffer injury or contract disease in the course of their employment.

But members of the House of Assembly Portfolio Committee on Labour and Social Security have raised concerns on how the Eswatini Royal Insurance Corporation (ESRIC) has held this monopoly for such a long time. They have, as a result, recommended an end to the monopoly by amending the Workmen’s Compensation Act (WCA) of 1983, so as to open the door for the inclusion of other insurers registered in the Kingdom of Eswatini. Although the ESRIC is not opposed to the move to end the monopoly, a labour specialist has warned that this is ‘absolutely unwarranted’ and the ‘wrong thing to do’ because the monthly and annual premiums paid by liable employers would be ‘eaten’ as privately earned dividends by private individuals through their shareholdings in the private insurance companies that would be collecting the compulsory workmen’s compensation.

According to the specialist, Dr. Cleopas Sibanda, the monopoly that was given to ESRIC was wrong in itself and allowing other insurers to come in was a perpetuation of this wrong. “What the proposed amendment to include all and any other registered insurance companies in the collection of workmen’s compensation insurance premiums seeks to do is not to bring the collected workers compensation insurance premiums back into the domain of public or government ownership, where they rightfully and correctly belong, but to just perpetuate an already and long-time wrong situation whereby these premiums have been and continue to be annually ‘eaten’ or shared out as privately earned dividends by these very lucky insurance companies,” Sibanda told the portfolio committee.

compensation

He submitted that in the face of the known need to de-privatise these workmen’s compensation insurance funds and bring them back to public or government ownership where they actually belong, this proposed amendment was not in good spirit at all. “It just seeks to perpetuate a fundamental wrong! Already, and since 1983, the Government of Eswatini, employers and workers have lost billions of emalangeni in excess collected workers compensation insurance premium funds to shareholders of Eswatini Royal Insurance Corporation,” Sibanda informed the committee. A report of the committee, which contains submissions made by stakeholders, who include Sibanda, the ESRIC, the Umbutfo Eswatini Defence Force and the Sincephetelo Motor Vehicle Accident Fund, has been tabled in Parliament for consideration and adoption. Sibanda is a qualified and experienced Occupational Health and Social Protection Specialist Physician, who worked for the Ministry of Labour and Social Security from 2008 to 2016 and was Head of the Workmen’s Compensation Unit (WCU) under the Department of Labour, and was Acting Head of the Department of Social Security from 2009 to 2015. He was legally gazetted as Chairman of the National Social Security Technical Working Group from 2012 to 2013.

According to Sibanda, there is no justification whatsoever to have these funds parceled out to other insurance companies to further perpetuate the loss of public funds through the proposed amendments of the Act. “Instead, what the Workmen’s Compensation Act cries out for and has been crying out for since 1983 is an urgent redress of this terribly unkind and anomalous situation,” he said, while stating that the most urgent amendment was that which would bring back the excess workers compensation insurance funds or premiums back into the domain of the public ownership, and not to further privatise these funds and proposed in the amendment.

benefit

He said when he was head of the Workmen’s Compensation Unit, he immediately advised and sought for the excess and unclaimed workers compensation insurance funds or premiums to be brought back to government, where they rightfully and correctly belonged. “To my surprise, for trying to do the professionally sound, right and correct thing and for the benefit of the country as a whole, and also for the benefit of government and its people, but especially for the benefit of all the under-compensated workers and employers of the country, I found myself being victimised and being engineered out of my job at the Ministry of Labour and Social Security. That is when I realised that I had touched the cash cow of some very powerful people in both government and the private sector,” Sibanda claimed.

He alleged to have been victimised by his own bosses and engineered out of his job at the ministry and in government but did not believe that the victimisation was from national Government of the Kingdom of Eswatini for correctly advising it in this issue and for trying to do the right thing. “And for that, I have been made to suffer, and have suffered and still continue to suffer, good people! But one day, God willing, justice will be served. And I believe,” Sibanda added. The ESRIC, on the other hand, reportedly expressed concern at not having been previously warned about the impending legislative changes. Also, the company is said to have showed concern on the transition to the proposed structure. “They highlighted that the Bill does not have a provision to cater for the transition into the proposed arrangement,” reads the portfolio committee report.

assessment

Further, ESRIC reportedly submitted that a risk assessment of the current registered insurance company would need to be done by the Financial Services Regulatory Authority (FSRA) to determine the capability of these insurers to handle and honour workmen’s compensation compliance requirements, such as fitness, in addition to simply being registered. The ESRC is said to have also pointed out the need for a new insurer to prepare itself to handle this class of business and that the ministry would have to satisfy itself that the insurer(s) has a firm understanding of its responsibility in terms of the Act. “They (ESRIC) then requested that a transition period of eighteen (18) months be given so that all stakeholders could undertake the activities outlined above,” the report states. Having considered the submissions of the stakeholders, the committee recommended ending the ESRIC monopoly and that a transitional provision be included in the amendments to allow for any loose ends and handover process that may be necessary.

To accommodate other insurers, the MPs have recommended an amendment to Section 25(1) of the Act, which will then read: “Every employer other than the government who employs a workman or workmen shall insure and keep himself insured in respect of all liability, which he may incur under this Act with an insurer envisaged in the Insurance Act No.7 of 2005.”
On the request by the ESRIC to be granted an 18 months transition period, the MPs recommended one year. This will be done through a new sub-clause 25(2), which will read: “Notwithstanding the provisions of sub-clause (1), the Eswatini Royal Insurance Corporation shall continue to be the only approved insurer for a period of twelve (12) months after the commencement of this Act.”

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