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Calculating the Return on Prevention

for Companies

29/11/2017

Costs and Benefits of Investments in

Occupational Safety and Health in Pakistan's Textile and

Garment Sector

Romina Kochius, Project Manager, Deutsche Gesellschaft für

Internationale Zusammenarbeit (GIZ) Pakistan

Muhammad Mujahid, EHS Officer, Saeed Ahmed Awan Centre for the

Improvement of Working Conditions and Environment, Pakistan

Implemented by

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The GIZ Project on Labour Standards in the

Textile Industry in Pakistan

With ca. 15 million workers, the textile and garment industry

provides employment to almost 40% of the nation’s

workforce. It is the backbone of Pakistan‘s economy.

The industry covers the complete textile value chain and

produces for the local market as much as for export,

covering almost all international markets.

The BMZ funded GIZ project focusses on carving out

incentives for improved compliance with labour standards,

using the momentum created by Pakistan’s GSP+ status.

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The GIZ Project on Labour Standards in the

Textile Industry in Pakistan

The project’s main partner is the Labour and Human

Resource Department of the country’s biggest province, the

Punjab.

Target of the cooperation is the integration of prevention,

rehabilitation and compensation to increase the efficiency

and effectiveness of labour inspections.

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The GIZ Project on Labour Standards in the

Textile Industry in Pakistan

The cooperation with the Labour and Human Resource

Department is supported by social dialogue, involving

business associations, trade unions and other stakeholders.

Moreover, the project cooperates with selected companies to

improve both labour standards and productivity, specifically

in their interplay, using a dialogue-based change

management tool.

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Why Calculating the Return on Prevention for

Companies?

A reduced number of accidents and diseases benefit the

worker’s physical integrity and quality of life as well as the

public health system.

But is there a return on preventing accidents at the

workplace and occupational diseases for the entrepreneur?

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The Partners

• Saeed Ahmed Awan Centre for the Improvement of

Working Conditions & Environment, Labour and Human

Resource Department, Government of the Punjab,

• HomeNet Pakistan,

• Bavarian Employers‘ Association (Bfz)/ESPIRE,

• German Statutory Accident Insurance Institution for the

Energy, Textile, Electrical and Media Products Sector

(BG ETEM),

• German Statutory Accident Insurance (DGUV)

• Deutsche Gesellschaft fur Internationale Zusammenarbeit

(GIZ) GmbH

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Background of the Study

The study is based on the international study “Calculating

the International Return on Prevention for Companies: Costs

and Benefits of Investments in Occupational Safety and

Health” which was carried out in 19 countries in various

sectors.

To be more convincing for local entrepreneurs, we wanted to

source local data.

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Approach

• The companies were selected on a basic criteria: They

need to have basic OSH knowledge;

• 51 companies were selected from the formal economies;

• Additionally, 7 units from informal sector were included in

the study.

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Structural Data

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Methodology

• The methodology is taken from the international study

calculating the Return on Prevention;

• The indicator “Return on Prevention” focuses in a

quantitative sense on the ratio between:

• The costs of prevention and

• The monetary benefits of prevention

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Methodology

• Companies were asked standardised questions to:

• Qualitatively rate the effects of occupational safety and

health and

• Quantitatively provide monetary values of occupational

safety and health costs per employee.

• The questionnaire contains 8 questions:

• 5 qualitative and

• 3 quantitative questions.

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Results

According to the companies interviewed, spending on occu-

pational safety and health is an investment that “pays off”.

The Return on Prevention is

assessed to be 2.5.

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Relative Importance of Occupational Safety

and Health within the Company

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Impact of Occupational Safety and Health

within the following Areas of the Companies

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Current Occupational Safety and Health

Measures within the Company

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YES, IT PAYS OFF!

1. It protects employees against workplace accidents and

illnesses.

2. It ensures the employees’ social protection.

3. It can directly benefit the entrepreneur’ profit, both in

formal and informal economies.

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As a federal enterprise, GIZ supports the German Government in achieving its objectives in the field of international cooperation for sustainable development.

Published byDeutsche Gesellschaft fürInternationale Zusammenarbeit (GIZ) GmbH

Registered offices, Bonn and Eschborn, Germany

Labour Standards in the Textile Industry of Pakistan

GIZ Textile Cluster Office, Cavalry Ground, Street Nr. 2, House Nr. 65T +92 302 8563 391E romina.kochius@giz.deI www.giz.de

Responsible

Romina Kochius

Authors

Muhammad Mujahid, Steffen Bitterling,

Romina Kochius

In cooperation with

Implemented by