Control Sensorles

Each of the three welfare funds was created by the law of the respective country. The earliest established was the Philippine Overseas Workers Welfare Administration, OWWA, by Presi- dential Letter of Instruction in 1977. It was originally named Welfare and Training Fund for Overseas Workers and was an office under the Department of Labour. The Fund’s legal status was strengthened by the 1980 Presidential Decree (law) that created OWWA in its current form, as an attached agency to the Department of Labour and Employment. An agency “attached” to a department operates with more autonomy than a regular unit of the department. It is governed by a board of trustees or directors and administered by a separate office or secretariat. The OWWA board is chaired by the Secretary of Labour and Employment and its members represent related departments (such as Foreign Affairs and Finance), the Philippine Overseas Employment Ad- ministration (an attached sister agency), and major groups of OWs (seafarers, land-based OWs and women). The OWWA remains a government agency and is subject to civil service law and government auditing standards.

Pakistan’s 1979 Emigration Ordinance created the Bureau of Emigration and Overseas Employ- ment (BEOE) which has the power and responsibility “to control and regulate emigration” and “to look after the interest and welfare of emigrants”. The Ordinance created the Office of the Protector of Emigrants, a field office of the Bureau, and the welfare fund under the control of the

Overseas Pakistani Foundation (OPF). It is a non-stock corporation managed by a board of governors. The board is chaired by the Minister of Labour, Manpower and Overseas Pakistanis, and its members include the managing directors of the Bureau and of OPF, and one representa- tive each from academe, hospitals and the private sector. According to the relevant by-laws, the OPF has many more responsibilities than the Philippine OWWA or Sri Lanka’s Welfare Fund, including providing social services to the community at large. OPF may also engage in real estate enterprises and establish schools and hospitals. The BEOE provides insurance against accidental death and disability and assists OWs who need to be repatriated. However, the airfare for repatriation is provided free or at a large discount by Pakistan Airlines.

The Sri Lanka Bureau of Foreign Employment Act No. 21 of 1985 created the Sri Lanka Bureau of Foreign Employment (SLBFE) as a semi-corporate body. It also established the Overseas Workers’ Welfare Fund (OWWF) as a unit of the Bureau. The Bureau is administered by an 11-member board of directors, all appointed by the Prime Minister including three members appointed upon consultation with the Ministers of Finance, Foreign Affairs and a female by Women Affairs. Of the remaining eight, four represent licensed foreign employment agencies. It remains a government agency and is subject to government audit standards. While the SLBFE manages the Welfare Fund as one of several administrative units, the Fund’s financial transac- tions are handled separately and reported from the Bureau’s accounts.

All three welfare funds derive their main income from OWs’ membership or registration fees, which was originally set at the uniform level of US$ 25. The Philippines and Pakistan charge domestic currency equivalents which are not automatically adjusted to the exchange rate. The Philippine Overseas Employment Administration (POEA) collects a fee of P1,275 (US$ 22.80) from each outgoing OW whose employment contract it has processed for approval and registra- tion (see Table 1.1 for currency exchange rates used). The fee covers OWs’ insurance against death and disability and pays for all other OWWA services. OWs at the jobsite may volunteer to become members of the OWWA and some do so.

TABLE 1.1

NOMINAL EXCHANGE RATE, CURRENCY/US$, 1996-2004

Year Sri Lanka Pakistan Philippines

1996 55.3 35.9 26.2 1997 59.0 40.9 29.5 1998 64.4 44.9 40.8 1999 70.6 49.1 39.1 2000 77.0 53.6 44.2 2001 89.4 61.9 51.0 2002 95.7 59.7 51.6 2003* 96.5 57.8 54.2 2004** - - 56.11

Notes: *ExchangeRate.com. Exchange rate as of 30 June 2003. **Asian Wall Street Journal as of 30 August 2004. Source: International Financial Statistics, 2003.

The OWs who wish to be insured against ill health may pay P900 (US$ 16). This is voluntary for those OWs who are already insured through other insurance schemes. In Pakistan, the OPF collects a membership fee of US$ 18.20. In Sri Lanka, all registered OWs are automatically insured against death, disability, medical and repatriation. OWs become registered members upon payment of a registration fee of US$ 25 to the SLBFE. Of this amount, 70% is paid to the placement agents for their services, 10% goes to the Welfare Fund for services at job site and the rest is retained for local welfare and other services. In addition, the Welfare Fund receives the fees collected from foreign employers set at US$ 25 per OW hired. The Bureau is also reim- bursed for embarkation fees paid by OWs on their departure.

The three funds receive income from OW fees and other charges, on a per capita basis: US$ 31.20 in Pakistan, US$ 49.50 in Sri Lanka and US$ 21.81 in the Philippines. This source of income comprises the bulk of the welfare funds’ revenues and pays for most of their services and administrative and operating costs. The fees collected seem to be adequate for financing the more critical on-site needs of OWs, especially repatriation and the operation of welfare offices abroad. The death insurance benefits are, however, paltry and do not cover lifetime income loss. Death insurance benefits averaged US$ 4,953 in Pakistan, US$ 3,690 for accidental death and half the value for natural death in the Philippines and only US$ 1,048 in Sri Lanka. The benefits in Sri Lanka were raised substantially in 2003 and are comparable to those in the other two countries. These benefits would be equivalent to approximately two years income abroad for the lowest paid Filipino housemaid, who receives US$ 200 per month.

The three funds differ in mode of delivery for some services. Sri Lanka makes extensive use of existing specialized institutions for providing such services as death and disability insurance, health insurance, education and credit. All its insurance is channelled through the existing state insurance system. It grants scholarships for enrolment in the school system starting at the end of primary education and going on to university or college. Its loan programme for pre-departure costs, housing and self-employment is implemented through three state banks. The Sri Lanka Welfare Fund gives merely subsidized interest to OW borrowers. The Fund, however, provides skills training directly to would-be OWs and offers pre-departure orientation, mainly for house- maids. In the Philippines, the insurance for death, disability and ill health is carried out by OWWA. Health benefits are at rates similar to those used by the national health insurance system. The OWWA does not run schools, but sends OWs for skills training at accredited institutes and works with accredited non-government groups in providing pre-departure orientation. However, the OWWA directly provides training for upgrading the skills of seafarers. As in Sri Lanka, the Overseas Pakistani Foundation (OPF) channels its insurance through state insurance companies. The OPF differs from the other two funds in that it can itself engage in real estate enterprises, and establish and operate hospitals and schools. The OPF has already created 21 lower level schools, 14 vocational-technical schools (called poly-trade schools) and three colleges. It organ- izes medical camps or visits to poor communities and even conducts children’s educational tours, albeit on a relatively modest scale.