Terms of Reference for a Social Protection Risks and Needs Analysis in the Building and Construction Industry Value Chain 1. Background a. The UN Green Jobs Joint Program and its Social Protection Component Page 1 The ILO has partnered with other UN agencies to harness the potential of the construction sector to promote decent work in the country. The UN Joint Program Enhancing competitiveness and sustainable business among MSMEs in the building construction industry aims at the promotion of sustainable livelihoods, through the creation of green jobs in sustainable MSMEs operating in the Zambian building industry. The programme is further predicated on the concept of sustainable business, which responds to the pressing need for integrated economic growth with social progress and environmental concerns. The Project has a component on Strengthening a Social Protection Floor for Vulnerable Workers and their families in Zambia s Building and Construction Industry. It aims at (1) generating evidence on the need for social protection, to (2) make recommendations on major social protection options and to (3) assess the feasibility of given sets of instruments to extending social protection coverage to vulnerable workers, in the construction sector in Zambia, and along the construction industry s Value Chain. One of the policy objectives of the Government of Zambia is to ensure extension of social security coverage to excluded groups. In addition the extension of social security to the informal sector is one of the objectives of the current social security reforms. Government has constituted a Technical Working Group comprising key stakeholders to facilitate formulation of comprehensive strategies on extension of social security to the informal economy. It is assumed that the practical approach would be to adopt a progressive sector based strategy beginning with more organized sectors in addition contributions should be set at appropriate levels based on cash flows in each sector. Among other goals the Social Protection component of this Project will collaborate with Government efforts towards extending coverage to vulnerable groups. In order to accomplish this, the Project will support the work of the Technical Working group, by assisting in development of specific and general tools to protect vulnerable workers and their families against distress arising from the occurrence of severe poverty inducing social risks. It could significantly contribute to help defining modalities of coverage for private sector employees and particularly those in non standard forms of work and devise modalities to extend coverage of existing contributory provisions to workers in the informal economy or in atypical forms of work, including to many workers in the target economic sector, for example through a mix of contributory and non contributory 1
instruments. This would contribute to strengthening decent work and living conditions faced by workers and their families in such a fast rising and growing important sector of the economy. It is also expected that by improving working conditions in the sector this component will also lead to productivity gains. High levels of income security and access to health care increases motivation, physical and mental ability to focus on work. Is it therefore expected that by extending social protection coverage this Project component will enhance and maintain the productivity of workers and creates possibilities for new employment through enterprise growth. Page 2 This Project component will contribute to establishing the linkage between social protection and enterprise growth by generating evidence that will be used to address the gap regarding the appropriate social protection needs and systems for the construction sector. Activities in this component will be implemented in line with the national policy aimed at increasing employment and making labour markets work better for vulnerable workers through effective development and governance of social protection systems. b. Problem definition i. The construction sector The construction sector played a central role in Zambia s growth in recent years and presently makes up approximately 21.1 per cent of the economy. The Economist Intelligence (EIU) has predicted that construction growth will average 12 percent between 2012 and 2014 as a result of planned investments. At the same time the sector is typically characterized by a number of vulnerable forms of work, and is often the sector with most poor human rights records, steaming from usually poor regulatory, governance and enforcement mechanisms. Typical vulnerabilities of contract workers include absence of formal contracts of employment, absence and lack of awareness of legal rights at work, limited and unequal access to information on job opportunities by lower skilled workers. Following the mining sector, it is probably the second most prone to industrial accidents and injuries, and workers are amongst the most vulnerable to ill health, and poverty in case of maternity, disease, unemployment, disability, or old age, for lack of any form of social protection. Poor living and working conditions reflect the absence or weakness of regulation, governance and enforcement of existing labour and social laws and programmes for workers in the construction sector. To this fact also contributes the existence of a large number of casual workers, notably in the form of contract work. 2
ii. Social protection environment in Zambia Social protection consists of policies and programmes designed to reduce poverty and vulnerability by diminishing people s exposure to risks, enhancing their capacity to protect against hazards and interruption/loss of income, and promoting the resilience of workers and their families to risks and adverse chocks, notably by promoting efficient and well regulated labour markets, and accessible basic social and health services. Social protection must adopt a holistic approach, by considering both service provision, jobs and cash benefits. Page 3 The ILO conducted a thorough Zambia Social Protection Expenditure and Performance Review in 2008 and an Economic Feasibility for a Social Pension in 2012. The first analysis showed that the scope and extent of personal social security coverage in Zambia is extremely insufficient and confined to providing compensation to formal sector employees, essentially in the event of income loss due to old age or retirement, disability or loss of bread winner, and in the event of industrial injuries and occupational diseases. Social security in Zambia is confined to the waged workers in the formal sector. According to the Labour Force Survey conducted in 2012, of the 5,845,250 persons reported to be employed, a total of 4,775,404 persons or 88.7% were employed in the informal sector compared to 610,714 persons or 11.3% in the formal sector. Therefore only 11% of the labour force is covered by some form of social security. The larger majority of the population both within the labour force and outside is excluded from social security coverage. The narrow coverage of the existing provision is due, among other things, to factors such as the informalization of the labour market, casualization and exemptions of certain categories of employees. Given the nature of work in the Building/ Construction industry, many workers are currently left without any form of social protection. A new national health insurance scheme is currently in the process of being designed and its implementation is foreseen within the next 12 months, starting with civil servants, followed by workers with formal contracts, but aiming in the mid-term to cover also workers in the informal economy. There are also limited social assistance schemes such as the Public Welfare Assistance System (PWAS), and a Social Cash Transfer Scheme which is being implemented on a pilot basis, including Child and Old Age benefits. Other programmes include the food security pack (FSP), Micro- Bankers Trust (MBT), and national trust for the disabled (NTD). The Ministry of Sport, Youth and Child Development administers the Zambia National Service Street Kids Rehabilitation Programme. They are however only targeting a few localities. They are not yet legally established under an Act of Parliament. They are limited in terms of coverage and are insufficiently funded. Currently, the country is undergoing a process of definition of its national social protection policy that can be an important step towards a more systemic approach to the sector. 3
iii. Project approach to the problem This Project component proposes a five phase approach to build and disseminate Knowledge/Evidence in the context of sector social dialogue. Using the methodology used under F. Lund and J. Nicholson (2003) Chains of production, ladders of protection social protection for workers in the informal economy, School of Development Studies, UKN, the project will analyze the social risks and social protection needs of the target population throughout the Building Industry Value Chain 1 (PHASE 1), followed by PHASE 2, which includes a Social protection Gap analysis, through a review of existing and applicable social protection measures. Page 4 Under PHASE 3, the project will establish priority areas of focus, in the context of social dialogue, and building on good practices in the country, regionally and internationally. A holistic approach such as promoted under ILO Recommendation R202 (2012) on Building National Social Protection Floors will be considered, including the strengthening of in kind/service provision and cash transfers (non contributory and contributory), looking particularly at basic guarantees over the life cycle. PHASE 4 will involve the conduct of economic and social impact studies on agreed priority options for coverage. PHASE 5 will pave the way for implementation of new measures to extend social protection, through building the capacity of constituents via the development of tools, instruments, processes and training in the context of social dialogue. The project will build on previous work by the ILO in the area of social protection in the country, notably the Zambia Social Protection Expenditure and Performance Review (2008) and the Economic Feasibility for a Social Pension (2012). 2. Objectives The team of Consultants will be responsible for carrying out a Social Protection Risks and Needs Analysis in the Building and Construction Industry Value Chain, that constitutes the Phase 1 of the above-mentioned approach The objective of this analysis is to improve the understanding of the situation of workers in this industry, in terms of the risks they face and the impact that those risks have in their lives, including also its impact in their working capacity and therefore its impact on enterprise productivity. It will contribute to the production of evidence on needs, risks for social protection in the Building and Construction industry in Zambia that will assist preparing the following phase that will already include a Social Protection Gap analysis, through a review of existing and applicable social protection measures. 1 See http://wiego.org/informal-economy/occupational-groups/construction-workers. 4
The process of development of this output should also contribute to create awareness on national stakeholders on the negative impacts of risks in their livelihoods and on the importance of Social Protection to minimize the impact of these risks. 3. Methodology Page 5 The production of the Social Protection Risks and Needs Analysis will involve inter alia a study of existing literature on living and working conditions and social protection in the construction sector in Zambia. This will be complemented by consultations and an industry supply/ value chain analysis of employment relationships and related social risks. International Literature on the topic of living and working conditions and social protection in the construction sector can provide important elements to define the analytical framework to be used in the Zambian Analysis. The analytical framework should benefit from ILO relevant conventions and recommendations. The Social Security (Minimum Standards) Convention, 1952 (No. 102), with its nine social security branches covering all social security risks provide a relevant starting point for the definition of the risks to be looked at. The Social Protection Floors Recommendation, 2012 (No. 202), its live cycle approach and its relation with services provides additional important elements for the analytical framework. The Consultants will be expected to conduct, (1) on site field interviews and observation, (2) interviews/focus group discussions with representatives of employers and (3) interviews/focus group with representatives of employees in the construction sector (4)interviews with other players in the value chain that includes but not limited to retailers, wholesalers among others (5) interviews with line ministries (including Ministry of Labour and Ministry of Health), social security schemes (National Pension Scheme Authority (NAPSA), Pensions and Insurance Authority (PIA) and Workers Compensation Fund Control Board (WCFCB) (as these cover the private sector) and (5) interviews with the National Association of Medium and Small Scale Contractors and (6) will consult other relevant policy makers. The fieldwork should be undertaken in Kitwe, Lusaka, Choma and Chipata, these project areas represent urban and rural geographical areas to insure that distinct typologies of work and respective risks and needs are covered in the analysis. The proposed guide for sources of data is indicated below: 5
Province Copperbelt Eastern Lusaka Southern District Kitwe Chipata Lusaka Choma Architects/ Designers/ Engineers 1Employers 2 workers 1 Employers 2 workers Contractors 2 Employers 1 Employers 4 workers (IDI/FGDs Saw Millers/Timber Growers 2 Employers 8 owners Other MSMEs in the construction value chain 2 Employers 2 Employers Policy makers/asso. Min. of Labour Min. of Health NCC Social Security schemes (NAPSA, PIA, WCFCB etc.) Associations (NAMSCA, ZAWIC, ZACSMBA, ZFE, etc.) Page 6 Note: The proposed guide does not limit the consultant from covering other relevant categories or increase the proposed coverage numbers which might enrich the findings. Concerning the Focus Group, the recommendation is that at least one focus group with workers should be organized in each of the covered districts. If possible, a focus group (or Seminar) with the presence of both employers, workers and government should be envisaged. The Seminar should be organized by the Consultant with ILO assistance. To feed the dialogue with representatives of employers and representatives of employees the team of consultants will prepare distinct background documentation for both groups aiming at sensitizing them to the theme and create the conditions for an informed discussion. ILO will facilitate the contacts with the organizations and when possible will participate in the meeting. These consultations will result in determining a typology of employment relationships in the construction industry and the perceived social needs and risks at different levels of the Building/ Construction industries Supply/Value 6
Chain. It will also include an analysis of the impact of these risks in terms of productivity. During the interviews with Employers and their representatives special focus should also be given to their perception on the negative impact of social risks in enterprise productivity. Page 7 Particular attention should also be given to small scale contractors and their workers who despite not currently being covered by social protection arrangements have conditions (for instance related with the income level) that makes them a potential target for coverage in the short to mid-term. Additional information can be collected from other studies carried in the recent past by the ILO and other UN Agencies in the construction sector. The ILO also commissioned a baseline quantitative study in the construction sector that can provide statistical relevant information for this research. Simultaneously, a profile on Occupational Safety and Health in the Construction sector is also being commissioned by the ILO. It would be important if the teams working in this parallel studies can try when possible to create synergies between their work. The Draft report will be shared with the ILO team and a validation meeting should be organized with representatives of employers, workers and government stakeholders. 4. Deliverables and time frame The duration of the consultancy will be twelve weeks, effective from the date of signing the contract. Key deliverables of this assignment will include the following: Product 1 Inception Report: within two weeks of signing the contract, presenting the detailed methodology to be applied in the research, including analytical framework to be used in the analysis and materials for in-depth interviews and focus group discussions meant to create ground for informed discussions Product 2 Draft Report: within eight weeks from the submission of inception report the service provider should submit a draft report on the risk and needs assessment outlining the preliminary results of the assessment; Product 3 Final Report: within two weeks from receiving the comments to the first draft report the service provider should submit the final report, documenting the findings of the entire study. The final report should take into account the comments received from key stakeholders. 5. Expected Activities 7
In addition to the substantive delivery of the products itemized in 4 above, the consultant will be expected to: (i) (ii) (iii) Present the draft report to a workshop of stakeholders for review; Consolidate comments that will be made by stakeholders into the draft report; and Present the final draft report to a workshop of stakeholders for validation. Page 8 6. Team Profile The Contract will be awarded to a Service Provider that proposes a team including at least the following members: A team leader with more than 10 years of experience in the area of Social Protection, particularly with relevant experience in the extension of social protection to workers in non standard forms of work, including workers in the informal economy, casual workers, working experience in Southern Africa Experience and strong knowledge in social protection in Zambia. Knowledge in the construction sector in Zambia and the construction industry s value chain, including experience with representatives of employers and workers in the sector will be an added advantage. The consultant should have ability to conduct the study using qualitative and quantitative methods. 7. Payments The payment schedule for the above mentioned assigned will be as follows: 20% of the consultancy fee to be paid upon reception and approval by the ILO of Product 1 30% upon reception and approval by the ILO of Product 2 50% upon reception and approval by the ILO of the Final Product 8