Country Report

Fellowship Training on Employment Insurance (EI) and Employment Injury Insurance (EII) in collaboration with the Korea

Workers’ Compensation and Welfare Service (COMWEL),Seoul, Republic of Korea, 5-13 October 2011

KINDOM OF CAMBODIANation Religion King

Located in Southeast Asia.

Covers an area of 181,035 km2

Borders Thailand to the West and Northwest, Laos to the North and Vietnam to the East and Southeast

In the South it faces the Gulf of Thailand

Country Profile

DemographyFigure 1: quick information about Cambodia

Official language Khmer

Area 181,035 km2

Capital Phnom Penh

Currency Riel

Calling code 855

Internet TLD .kh

Population 14.45 million (2010 estimate)

Population growth 1.71% (2010 estimate)

Birth rate 25.73 births/1,000 population (2010 estimate)

Death rate 8.08 deaths/1,000 population (2010 estimate)

Infant mortality rate 54.79 deaths/1,000 live births (2010 estimate)

Life expectancy Male: 60.03 y, Female: 64.27 y (2010 estimate)

Urban population 22% of total population (2008 estimate)

Population density 81 persons /km2 (2008 estimate)

Multiparty democracy under a constitutional monarchy.

The King is the chief of state, and the Prime Minister is the head of government.

The king formally appoints the prime minister to head the government.

The prime minister heads a cabinet.

A bicameral (two-chamber) parliament holds legislative power.

Political System

From 2004 to 2007, the economy grew about 10% per year.

Growth dropped below 7% in 2008 as a result of the global economic slowdown.

The real GDP per capita grew steadily from 2002 to 2004 and reached the peak of 20.20% in 2008.

Cambodia had a labor force of 8.6 million (2008 estimate)

The garment industry currently employs more than 320,000 people and contributes more than 85% of Cambodia's exports.

Economy

Year

GDP at Current Prices

(billion riel)

Real GDP Growth

(Constant Price

1993) (%)

Real GDP per capita Growth

(%)

Inflation (%

increase, YoY)

Inflation (%

increase, Year

Average)

Inflation, Food

Group (% increase,

YoY)

GDP Deflator

(%)

Riel/US$ Exchange

Rate (EoP)

Real Effective Exchange

Rate

Population (millions)

2000 14,083 8.80% 2.10% -0.80% -0.80% -3.40% -3.10% 3,905 601 12.7

2001 15,633 8.10% 7.30% 0.70% -0.90% -2.50% 2.60% 3,910 598 12.9

2002 16,781 6.60% 6.10% 3.70% -0.10% 1.80% 0.70% 3,934 633 13.1

2003 18,535 8.50% 7.60% 0.50% 1.20% 1.50% 1.80% 3,983 659 13.3

2004 21,438 10.30% 12.90% 5.60% 3.90% 6.40% 4.80% 4,030 698 13.5

2005 25,754 13.30% 16.40% 6.70% 5.80% 8.40% 6.10% 4,127 737.7 13.8

2006 29,849 10.80% 16.00% 2.80% 4.70% 6.50% 4.60% 4,056 747.9 14.2

2007 35,042 10.20% 14.70% 10.80% 5.90% 10.00% 6.50% 4,003 758.2 14.5

2008 41,968 6.80% 20.20% 13.50% 19.70% 33.00% 14.00% 4,043 773.6 14.7

2009 45,815 2.00% 6.30% 7.50% 4.00% 33.00% 3.30% 4,180 772.5 14.9

Macro Economic Indicators

Figure 2: Macro Economic Indicators

Social Security was initiated in Cambodia since 1955 in accordance with the Royal Decree No. 55 and 306.

During the genocide rule (1975-1979), it was demolished.

The Department of Social Security was established in 1993.

The current Labour Law of Cambodia was passed in 1997 by amending the 1992 Labor Law.

The first Social Security Law was passed by the Parliament in September 2002.

In 2004 the ILO experts came to study the feasibility of the scheme and the administrative design.

In 2007 the sub-degree concerning the establishment of the National Social Security Fund (NSSF) was adopted.

NSSF was fully functional at end of 2008

Historical Development Process of Social Security

VisionThe vision of NSSF provides the Social Security Insurance by “the Law on Social Security Scheme for Persons Defined by the Provisions of the Labor Law” to employees in order to guarantee the security of income towards contributing the reduction of poverty and promotion of social stability. MissionThe mission of NSSF has the following:To strengthen “the implementing Law on Social Security Scheme for Persons Defined by the Provisions of the Labor Law”.To study for enlarging the social security scheme towards Health Care and Pension Scheme.To increase the public awareness on employment injury insurance policy.To enlarge the occupational risk insurance scheme covering all over the country.To offer the occupational risk benefits in effectiveness, accountability and equity.

Vision and Mission of NSSF

Coverage

Legal entity with autonomy in administration and self-financing.

Administers the schemes of Social Security protection in accordance with the National Social Security Law and the provisions of the Social Security related Sub-Decrees.

For all matters other than finance are under the supervision of the Ministry of Labour and Vocational Training (MoLVT), while the Ministry of Economy and Finance (MEF) administers all finance related issues.

Organizational Structure

Figure 3: Organization Structure

Registration

In 2010, 927 enterprises and 143,454 employees have been registered

to NSSF. Among them 551 enterprises came from Phnom Penh

municipality,24 from Kandal province, 08 from Kampong Speu Province

, 61 from Banteaymean Chey province , 33 from Kampong Chhnang

province , 34 from Svay Reang Province, 80 from Preah Sihanouk

province, and 136 from Siam Reap province. By the end of 2010, the

total amount of 1,910 enterprises and about 594,686 employees were

registered. (Please refer to the list of registration below).

Implementing of Employment

Injury Insurance Scheme

Figure 4: Number of Enterprises Registered by month in Capitals/Provinces

MonthsPhnom

Penh

Kampong

SpeuKandal

Banteay

Meanchey

Kampong

chhnang

Svay

Reang

Preah

Sihanouk

Siam

ReapTotal

January 37 01   34 06 20 18 57 173

February 30   02 02   03 09 08 54

March 55   01 05 06 03 01 01 72

April 21     01     03 01 26

May 38 01 03 03       0 45

June 45 02 04 06 10 01 01 01 70

July 77   04 01 05 01 06 14 108

August 55   03 06 02   21 23 110

September 44 02 02 03     04 10 65

October 25   02   02 01 10 06 46

November 50   03     02 04 07 66

December 74 02     02 03 03 08 92

Total 551 08 24 61 33 34 80 136 927

Contribution

Until 2010, 1,910 enterprises were registered at NSSF in which 1,867 were bound by contribution obligation and 1,564 enterprises and 530,599 employees were contributed equivalent to 84 %.

MonthsEnterprises to

Contribute

Contributed

Enterprises

 

Number of

workers

contributed

 

Total amount of

Contribution

(in Riels)

Percentage of

Enterprises

contributed

Jan-2010 1,303 1,216 426,369 916,340,387.00 93

Feb-2010 1,308 1,223 430,800 981,472,050.00 94

Mar-2010 1,328 1,233 430,857 979,339,550.00 93

Apr-2010 1,355 1,261 444,189 1,011,471,950.00 93

May-2010 1,642 1,496 468,599 1,200,338,392.00 91

Jun-2010 1,652 1,499 479,626 1,225,647,183.00 91

Jul-2010 1,685 1,517 491,970 1,338,400,225.00 93

Aug-2010 1,734 1,550 506,522 1,298,495,305.00 89

Sept-2010 1,778 1,580 510,725 1,325,566,804.00 89

Oct-2010 1,800 1,586 525,971 1,259,332,475.00 88

Nov-2010 1,843 1,607 525,892 1,378,569,131.00 87

Dec-2010 1,867 1,564 530,599 1,451,848,899.00 83

  TOTAL 14,366,822,351.00  

Inspection and Legal AffairThe inspection and legal affair have the main function of ensuring the implementing the law on Social Security Schemes for Persons Defined by the Provision of the Labor Law and other regulations. This process focuses mainly on some points such as: inviting enterprises/institutions to register and pay contribution, investigating employment injury, strengthening the implementing of law by via inspection, setting deadline for fining, and complaining to the court in case of the enterprises/institutions don’t implement the law and regulation.

Employment Injury InvestigationIn 2010, NSSF have investigated occupational risk of 8,567 employees. Among them, 8,132 persons were work injury and 435 persons non-work injury. Whereas in 2009, 3,853 persons were work injury and 168 non-work injury, and it’s shown that the work injury has increased 4,279 persons and 267 non-work injury.BenefitsIn regards to the provision of benefits, the NSSF paid great attention to providing a good benefits to employees exposed to occupational risk to receive a stability of revenues in work life, family and social. The institution made changes some procedures so that the provision of benefits could be better and faster carried out and facilitate with the hospital contracted with NSSF to ensure better medical service. To do this, the institution assigned its agents tostation at some hospitals in order to facilitate the victims during the day. Moreover, in case of severe injuries, NSSF sent the officers to incidence scene to provide on time facilitation and intervention

Occupational accident refers to the accident inflicted on the body of the employee during working hours, regardless of the cause and employee’s fault.

Accident occurs along the direct route between the employee’s residence and workplace is called commuting accident excluding social activities that are not part of the employee’s job.

Occupational disease arises out of the exposure to the harmful substances or hazardous condition in the processes.

Occupational Accident and Diseases

The benefits are categorized as followings: medical treatment benefit, temporary disablement benefit, nursing benefit , permanent disablement benefit, constant attendance benefit and survivor benefit.

Benefits and Payment

The claiming for all benefits is made on the prescribed forms and submitted to relevant office within the prescribed time.

Related documents have to be submitted along with the forms in order to support the claim.

Benefit Claiming

Benefits

Medical Treatment Injured employee is provided with medical treatment

benefits including medical care and transportation.

Temporary Cash 70% of the daily contributory average wage, but it

lasts only 180 days. Allowance for the care taker is 50% of the

temporary cash of the victim

Benefits (cont.)

The employee receives a lifetime pension based on the loss of earning capacity

A constant attendance benefit is 50% of the beneficiary’s pension

P DCAW 70% (LEC 1/5 LEC) APV P: Pension DCAW: Daily Contributory Average Wage LEC: Loss of Earning Capacity APV: Actuarial Present Value

Permanent disablement benefit

The employee will be awarded lump-sum payment instead of pension.

LS DCAW 70% LEC 20% APV LS: Lump-Sum DCAW: Daily Contributory Average Wage LEC: Loss of Earning Capacity APV: Actuarial Present Value

Permanent disablement benefit

with the loss of earnings is less than 20%

To ensure compliance with the scheme requirements and to hinder fraudulent claims, penalties in the form of fines and jail sentences have been allocated by National Social Security Law in accordance with Sub-Decree.

The offence includes non-registration of the enterprise or employees, non-payment or underpayment of contributions, and a refusal to comply with the other administrative requirements.

Other wrongdoings include the submission of false information to claim benefits or other fraudulences.

Penalty

Obstacles and Challenges During its implementation in the first phase on the Occupational Risk Scheme, NSSF encountered main

challenges as described below:

Quality of medical services were not good enough

Providing not enough service and not right to the goal

Did not cooperate well in providing information concerning to the number of

employees, employees’ salary and branches of company.

Did not send their monthly reports on the number of their employees and

contribution on time.

Provided inaccurate report on occupation risk and were often late.

NSSF started its first operation amid the global financial crisis (late 2008)

Penalties and law enforcement to ensure compliance with the standard and hamper fraudulent claims.

Internal capacity building.

NSSF staffs needs to be trained to understand the social security schemes.

Educational campaign to raise the public awareness.

Equips necessary furniture and IT equipment.

Recruits more staff

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