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onevisiononeidentityonecommunityonevisiononeidentityonecommunityResearchonEconomicJustificationofOccupationalSafetyandHealth(OSH)ImplementationintheConstructionSector
ResearchonEconomicJustificationof
OccupationalSafetyandHealth(OSH)
ImplementationintheConstructionSectorTheASEANSecretariatJakartaTheAssociationofSoutheastAsianNations(ASEAN)wasestablishedon8August1967.TheMemberStatesareBruneiDarussalam,Cambodia,Indonesia,LaoPDR,Malaysia,Myanmar,Philippines,Singapore,ThailandandVietNam.TheASEANSecretariatisbasedinJakarta,Indonesia.Forinquiries,contact:TheASEANSecretariatCommunityRelationsDivision(CRD)70AJalanSisingamangarajaJakarta12110,IndonesiaPhone:(6221)724-3372,726-2991Fax:(6221)739-8234,724-3504E-mail:public@Catalogue-in-PublicationDataResearchonEconomicJustificationofOccupationalSafetyandHealth(OSH)ImplementationintheConstructionSectorASEAN:ACommunityofOpportunitiesforAllThetextofthispublicationmaybefreelyquotedorreprinted,providedproperacknowledgementisgivenandacopycontainingthereprintedmaterialissenttotheCommunityRelationsDivision(CRD)oftheASEANSecretariat,Jakarta.GeneralinformationonASEANappearsonlineattheASEANWebsite:CopyrightAssociationofSoutheastAsianNations(ASEAN)2023.Allrightsreserved.iiACKNOWLEDGEMENTOccupationalsafetyandhealth(OSH)hasbeenanimportantissueintheworkplace,butitisevenmorecriticalintheconstructionsector.Thisindustryisoneofthemosthazardousplacestowork,withaccidentsandfatalitystatisticssubstantiallyexceedingotheroccupationalsectors.Suchaphenomenonisaseriousconcernfacedbybothindustrialanddevelopingnations.Anumberofcontributingfactorscanbeattributedtothisphenomenon;however,implementinganOSHprogrammehasoftenbeenviewedtobeineffectiveandcostly,leadingtoahesitancyinimplementingsuchintheworkplace.Toaddressthisissue,theeconomicrationalecanbeconsideredasaviableapproachforthejustificationofsafetyandhealthprogrammesintheworkplace.Thecost-benefitmodelshavebeenmoreusedrecentlyasanapproachthatacompanycanutiliseinensuringthatOSHinvestmentsprovidegoodreturnsoninvestment.Thecostbenefitanalysis(CBA)comparesthecostsofimplementinganinvestment(i.e.,safetyandhealthprogrammes)tothemonetaryvalueofoutcomesthatcanbeexpectedasshownbyrigorousresearch.Byemployingthismethod,themanagementcanidentifyandproposethemostrelevantprogrammesthatcanprovidethegreatestreturnstothecompany.Indonesia,startedapilotprojectaimedatevaluatingtheutilityofthisapproachbycollectingdatafromnationalconstructioncompaniesinASEANMemberStates.TheoverallresultsoftheprojectdemonstratedthepotentialofusingeconomicrationaleinjustifyinganOSHprogramme.ApreliminaryworkshopwasheldinIndonesiain2018,whichfinalisedthetitleoftheprojectto“ResearchonEconomicJustificationofOccupationalSafetyandHealth(OSH)ImplementationsintheConstructionSector".Thisprojectwasendorsedbythe19thASEANOccupationalSafetyandHealthNetwork(OSHNET)CoordinationBoardMeeting(CBM)heldon2-3April2018inCambodiaandreceivedfundingsupportfromtheASEANDevelopmentFund(ADF).Subsequently,aregionalconsultantfromIndonesiawascontractedfortheproject,witheightnationalexpertsrecruitedtocollectnationaldata.Theregionalreportreceivedad-referendumendorsementbyASEAN-OSHNETon21November2022.Thisprojectcouldnotbeaccomplishedwithoutthehelpandsupportfromthefollowingindividualsandorganisations:TheASEAN-OSHNETfocalpointsfromlabourministriesofASEANMemberStates,whomtherearetoomanytoacknowledgeindividually,foryourinvaluabletimeandeffortstoreviewthedraftreports,providedataandinformation,andshareinsights.TotheDirectorateGeneralofLabourInspectorandOSHDevelopment,ledbyMrs.HaiyaniRumondang(DirectorGeneral),forleadershipandguidanceduringimplementationoftheStudy,andherteammembers,particularlyMr.M.Idham(DirectorofOSHTesting),Mrs.ErdianaMuliawaty,Mr.FariedAbdurahman,Mrs.AnndalussiaFirdaFarida,Mrs.YessieKualasari,MurniSiswati,NelyJumaliyah,EkaSetiyaNova,SonyaErmina,DwiFerthasari,FitriNurani,UmiMuroahDwiYugowati.TotheASEANSecretariatparticularlyH.E.EkkaphabPhanthavong,DeputySecretaryGeneralforASEANSocio-CulturalCommunity(ASCC),DirectorRodoraT.BabaranoftheHumanDevelopmentDirectorate;andtheLabourandCivilServicesDivisionoftheASEANSecretariat,ledbyMs.MegaIrena(HeadandAssistantDirector),andherteammembers:SeniorOfficerMadyahRahmiLukriandOfficerFeliciaClarissafortheirsupportonresourcemobilisationforthisproject,professionalcoordinationandfacilitationofconsultationswithstakeholders,aswellasfortheirvaluableinputstothedraftreport.InternationalLabourOrganization(ILO)particularlyYukaUjitaMDPhD,SeniorOccupationalSafetyandHealthSpecialist,ILORegionalOfficeAsiaPacific;IndonesianOccupationalHealthDoctorsAssociation(IDKI);Regionalconsultant,HardiantoIridiastadi,PhD,CPE(Indonesia)Nationalexpertsfortheircollaborationthroughouttheproject:-Dr.YouthSokpheara(Cambodia)-Mr.ViboonSithimolada(LaoPDR)-Dr.RafaelNandaRaudranisala(Indonesia)-Ir.Dr.MohdFairuzAbRahman(Malaysia)-Dr.RosemaryR.Seva(ThePhilippines)-GohChinKeong(Singapore)-AkarapongNual-On(Thailand)-NguyenSyKhanhLinh(VietNam)ForewordForewordivivForewordForewordivivForewordForeword//////COVID-19pandemichashadaprofoundimpactonnearlyeveryaspect,notjustahealthcrisis,butasocialandeconomiconeaswell.Ithasdisturbedtheeconomiesandlabourmarketsglobally.Constructionsectorwithoutexceptionarealsoaffected,andworsentheASEANregion'seconomy.Currently,besidesattentiontoeconomicrecoveryofconstructionsector,concernonOSHimplementationinconstructionsectorneedstobestrengthened.ASEANOSHNEThasastrongcommitmentinimprovingsafetyandhealthintheworkplace.Oneofthemajorchallengesinprovidingasafeandhealthyworkingenvironmenthastodowiththecostsofimplementingoccupationalsafetyandhealth(OSH)programsintheworkplace.BasedontheASEANOSHNETWorkPlan2021-2025,IndonesiaasProgramCoordinatorofResearchhasfollowedupuResearchontheEconomicJustificationofOccupationalSafetyandHealth(OSH)ImplementationintheConstructionSector".BysayingthanksGod,thisresearchprojecthasbeencompleted.IexpressmygratitudetoASEANMemberStates(AMS)andrelevantpartieswhohavecontributedontheimplementationandfinalizationofthisresearchproject.Iappreciateandwelcomethepublicationofthee-book''ResearchonEconomicJustificationofOccupationalSafetyandHealth(OSH)ImplementationintheConstructionSector”underASEANOSHNET.Fromthisresearchreportitisfoundthatprovidingmuchsaferandhealthierworkplaces,couldnotbeseensolelyasaneconomicburdentothecompany,butmostofOSHprogramscanactuallybejustifiedeconomically.HopefullythispublicationwillmotivatethemanagementofconstructioncompaniestocarefullyevaluatetheirOSHprogramsaswellasabasisforpolicymakertocreatenationalorregionalpolicyonimplementingOSHatconstructionsector.Jakarta,December2022DirectorGeneralofLabourInspectionand
OccupationalSafetyandHealthDevelopment
MinistryofManpowerRepublicofIndonesiaDr.HalyaniRumondangM.A.
Dr.HalyaniRumondangM.A.ThisStudyonEconomicJustificationofOccupationalSafetyandHealth(OSH)ImplementationintheConstructionSectorisaregionalinitiativeintheWorkPlanASEANOccupationalSafetyandHealthNetwork(ASEAN-OSHNET)2021-2025.ItexaminedtheimplementationofOSHprogrammesintheconstructionsectoranditseconomicgainsacrosseightASEANMemberStates.Theanalysisshowedthatinvestmentsinoccupationalsafetyand/orhealthprogrammesintheconstructionworkplaceresultedinbenefitsthat,fromtheeconomicperspective,areatleasttwicegreaterthantheinvestmentspent--anaffirmationthatexpendituresforOSHshouldbeseenasaninvestmentandnotacost.IampleasedthatthisStudygivesusaperspectiveonhowaninvestmentinOSHequipmentandfacilitiesisaresponsiblebusinesspracticethatbenefitsworkers,enterprises,MemberStatesandASEANasawhole.AsASEANeconomiesrecoverfromtheCOVID-19pandemic,constructionworkisalsoexpectedtopickuppace.Itisthereforeimportantthattheworkersarewellequippedforsafetyandprotectedfromhealthrisks.Buildingasafeandhealthyworkplaceisanecessaryconditionforproductivity.Itisalsopivotalinsustainingbusinessandraisingthecompanyimageandconsumers'trust.IamconfidentthatthisStudyReportwillprovideusefulinsightsforenterprisesandgovernmentsinfurtherraisingtheprofilesoftheirOSHstandardsparticularlyintheconstructionsector.AppreciationgoestoIndonesiaforinitiatingthisStudywhichcontributestothecommonagendaofaninclusive,resilientandsustainableASEANCommunity.ThisStudyonEconomicJustificationofOccupationalSafetyandHealth(OSH)ImplementationintheConstructionSectorisaregionalinitiativeintheWorkPlanASEANOccupationalSafetyandHealthNetwork(ASEAN-OSHNET)2021-2025.ItexaminedtheimplementationofOSHprogrammesintheconstructionsectoranditseconomicgainsacrosseightASEANMemberStates.Theanalysisshowedthatinvestmentsinoccupationalsafetyand/orhealthprogrammesintheconstructionworkplaceresultedinbenefitsthat,fromtheeconomicperspective,areatleasttwicegreaterthantheinvestmentspent--anaffirmationthatexpendituresforOSHshouldbeseenasaninvestmentandnotacost.IampleasedthatthisStudygivesusaperspectiveonhowaninvestmentinOSHequipmentandfacilitiesisaresponsiblebusinesspracticethatbenefitsworkers,enterprises,MemberStatesandASEANasawhole.AsASEANeconomiesrecoverfromtheCOVID-19pandemic,constructionworkisalsoexpectedtopickuppace.Itisthereforeimportantthattheworkersarewellequippedforsafetyandprotectedfromhealthrisks.Buildingasafeandhealthyworkplaceisanecessaryconditionforproductivity.Itisalsopivotalinsustainingbusinessandraisingthecompanyimageandconsumers'trust.IamconfidentthatthisStudyReportwillprovideusefulinsightsforenterprisesandgovernmentsinfurtherraisingtheprofilesoftheirOSHstandardsparticularlyintheconstructionsector.AppreciationgoestoIndonesiaforinitiatingthisStudywhichcontributestothecommonagendaofaninclusive,resilientandsustainableASEANCommunity.EkkaphabPhanthavongDeputySecretaryGeneralofASEANfor
ASEANSocio-CulturalCommunityTableofContentsTOC\o"1-5"\h\z\o"CurrentDocument"ACKNOWLEDGEMENT iForewordbyDirectorGeneralofLabourInspectionandOccupationalSafetyandHealthDevelopmentMinistryofManpowerRepublicofIndonesia iiiForewordbyDeputySecretaryGeneralofASEANforASEANSocio-CulturalCommunity iv\o"CurrentDocument"ExecutiveSummary vii\o"CurrentDocument"Introduction 1\o"CurrentDocument"ResearchObjectives 6\o"CurrentDocument"3.ResearchProcedure 7\o"CurrentDocument"Results 9\o"CurrentDocument"OverviewsoftheSamplesAcrossAMS 10\o"CurrentDocument"AnalysisAcrossAMS 14\o"CurrentDocument"AdditionalFindings 20\o"CurrentDocument"DiscussionandConclusions 22\o"CurrentDocument"Challenges 22\o"CurrentDocument"Conclusions 23\o"CurrentDocument"Recommendations 24\o"CurrentDocument"6References 26\o"CurrentDocument"Appendix1:Questionnaire 29\o"CurrentDocument"Appendix2:NationalReport 39\o"CurrentDocument"Cambodia 41Indonesia 47LaoPDR 55Malaysia 63Philippines 73Singapore 83Thailand 97VietNam 109ResearchonEconomicJustificationofOccupationalSafetyandHealth(OSH)ImplementationintheConstructionSectorIII.DiscussionandConclusionTheimportanceofthis(andsimilar)researchasabasisforimprovingoccupationalsafetyandhealthintheworkplace.Thisstudywasthefirstofitskindconducted,perhapsinVietNam.ThisstudyisveryimportanttoensurethateveryOSHprogramis“valueformoney”.ItisalsoimportanttooltomeasuretheOSHprogramhasachieveditsobjectives.ThisstudyalsohighlightedtheratioofcostsspendforOSHtotheoverallcostoftheproject.TheOSHprogramsincludedinthisanalysisareselectedfewthatthecontractorshavedataoncostspentfortheOSHprogramsandtheirperceivedbenefits.ThereareotherOSHprogramscarriedoutbycontractorsintheirconstructionsitesbutnotincludedinthisstudy,whichmayalsocontributedtotheoveralleffectivesafetyandhealthmanagement.Datacollectionprocess(challengesfaced)DatagatheringforthisprojectwasfacilitatedbyVietNamNationalInstituteofOccupationalSafetyandHealth(VNNIOSH)throughitsconnectionwithVietNamNationalUnionofBuildingWorkers.Therequirementforfinancialandsafetydatamadeitdifficultformanyenterprisestoparticipatereadilywithouttheexpressapprovaloftopmanagement.Theenterpriseshadtobeassuredthattheywillremainanonymousbecausethedatatheysharemaybeusedagainstthemintheend.Manyenterprisesthatwereinvitedtoparticipateintheresearchdeclinedastheywereafraidthatthedataprovidedwouldbescrutinizednegativelyandwouldresultintheregulatorsfollowinguponthemwithinspectionsorinvestigationsattheirworkplaces.Therefore,enterpriseswouldfeelsomeresistancetoparticipateandprovidesuchdata.Someotherenterprisesdidnotprovideinformationaboutthemonthlywageoftheirsafetyandhealthpersonnelforthereasonthatpersonalinformationisconfidential.Theenterpriseshaveavarietyofwaystocollectdataandareinconsistentwiththedatarequiredbythequestionnaire.DetailsonthecosttoimplementtheOSHprogramswerenotwellrecorded,andthebenefitsgainedwerealsodifficulttoestimate.ThiswascausedbytheunclearobjectivesoftheOSHprogramswasconducted.Inaddition,theeffectivenessoftheOSHprogramswasalsonotassessedaftertheprogramswerecompleted.ThebenefitsandcostavoidedoneprogramweredifficulttobeseparatedordifferentiatedasthebenefitsandcostavoidedwereviewedastheresultsofOSHprogramsasawhole.Itisdifficulttofillindatarelatedtotheestimatedcoststhatcanbeavoidedduetothelackofdatafromenterprises.Mostenterprisescompletedincollectingtheimplementationcosts,butsomehavelackofcollectingdataaboutthecostsavedandpotentialbenefit.LessonslearnedfromtheBCRscollectedTheconceptofcost-benefitanalysis(CBA)andcomputationsofbenefit-costratios(BCRs),intheorycanhelpenterprisesseetheimportanceandeffectivenessofimplementinggoodOSHprograms.Thechallengeistodevelopamodelthatcontainsharmonizedwaystoclassifyandquantifycostsandbenefits.Fromthisstudy,wealsocanseethattherea
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