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Economic incentives in OSH

Economic incentives in OSH. Key results of the case study report Workshop 4-5 Feb 2009, Bilbao. Marc De Greef. Content. Introduction Case studies Conclusions. 1. Introduction. Introduction. Report: 12 successful case studies and 5 snapshots in 10 member states

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Economic incentives in OSH

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  1. Economic incentives in OSH Key results of the case study report Workshop 4-5 Feb 2009, Bilbao Marc De Greef

  2. www.prevent.beEconomic incentives in OSH: Case study report 2 Content • Introduction • Case studies • Conclusions

  3. 1 Introduction

  4. www.prevent.beEconomic incentives in OSH: Case study report 4 Introduction • Report: • 12 successful case studies and 5 snapshots • in 10 member states • Focus on financial incentives • Distinction between • accident insurance premium differentiation • subsidies, grants

  5. www.prevent.beEconomic incentives in OSH: Case study report 5 Overview of the incentives (1)

  6. www.prevent.beEconomic incentives in OSH: Case study report 6 Overview of the incentives (2)

  7. 2 Case studies

  8. www.prevent.beEconomic incentives in OSH: Case study report 8 Innovative case studies • Insurance premium variation: Premium discount in the Farmers’ workers’ Compensation Insurance – Finland • Funding scheme: Business financing for Programmes and Projects in OSH - Italy

  9. www.prevent.beEconomic incentives in OSH: Case study report 9 Premium discount model - Finland • Farmers employment accident insurance (MATA) • Premium discount • Purpose: decrease in accident rates • Target group: Self-employed Finnish farmers • Mandatory scheme for farmers • with annual income > 3093 euros • with > 5 hectares of land • Voluntary for other farmers

  10. www.prevent.beEconomic incentives in OSH: Case study report 10 How does it work? • Efficiency rating of individual company based on the accident rate • Each claim free year: • premium reduction: 10% • every consecutive year: +10% • max of 50% for 5 consecutive years • Each compensated accident: • 10% loss of discount • Upper limit

  11. www.prevent.beEconomic incentives in OSH: Case study report 11 Results and evaluation • Decrease in injury rate (5%) after programme implementation • Decrease in overall injury rate: 10.2% • Decrease in severity rate • 0 days: 16% 7-13 days: 19% • 1-6 days: 14% 14-29 days: 8% • Under-reporting • Could contribute to decrease • But: amount of premium discount is lower than amount of claim

  12. www.prevent.beEconomic incentives in OSH: Case study report 12 Success factors • Programme is mandatory, nation wide • Self-employed -> no difference between employer and employee motivation • Experience rating at individual level • Assessment and follow-up of results

  13. www.prevent.beEconomic incentives in OSH: Case study report 13 Business financing - Italy • Financial funding for SMEs in the craft and agriculture sector • Initiated by INAIL (Instituto Nazionale per l’Assucurazione control gli Infortuni Sul Lavoro) • Aim: compliance with safety regulations, decreasing # of accidents, improving of OSH • Two types of projects: • programmes to improve compliance with OSH regulations • training and information programmes to increase the level of OSH

  14. www.prevent.beEconomic incentives in OSH: Case study report 14 Scope of the project • Compliance programme: • Renewal of machinery, refurbishment of work environment, system renewal, installation of monitoring systems, promotion of a safety management system • € 232 M • Training and information programme: • Increasing workers’ awareness of OSH risks and reducing the human error • € 78 M

  15. www.prevent.beEconomic incentives in OSH: Case study report 15 Interest account funding • Credit line (loan) by banking institutions for selected projects • Zero interest for company • Related interest, charges and additional charges covered by INAIL (max. 155.000 € per project)

  16. www.prevent.beEconomic incentives in OSH: Case study report 16 Capital account funding • Financial support, additional to interest funding, in case of excellence • INAIL covers max. of 30% of interest funding (max. of 46.000 €) • Non refundable • Funding strands: • modification and reengineering of systems, machinery, devices and processes, decrease of exposure to hazardous products, refurbishment of work environment • implementation of safety management systems.

  17. www.prevent.beEconomic incentives in OSH: Case study report 17 Criteria • Priority to companies with high # of accidents according to the severity index parameter • Characteristics of the applicants • # of workers that are targeted • Features and target group of the planned actions • Collaboration between different bodies • Completeness/adequacy of the proposed actions/tools • Level of usability and transferability to other groups.

  18. www.prevent.beEconomic incentives in OSH: Case study report 18 Results and evaluation (1) In general • Increasing interest of applicants • Decision to widen the target group to all companies accross all sectors of activity • Sectors with highest number of applications • machine tools • agriculture

  19. www.prevent.beEconomic incentives in OSH: Case study report 19 Results and evaluation (2) Compliance programme • Projects on prevention and accident reduction • Applications for tangible projects such as purchase of equipment • Variation in application according to company dimensions • micro-enterprises: purchase of equipment (productivity) • > 10 employees: actions to improve working conditions

  20. www.prevent.beEconomic incentives in OSH: Case study report 20 Results and evaluation (3) Training and information • Applicants: employers associations, consortia of companies, bilateral organisms • Sectors: espec. services, construction, agriculture, metal working

  21. www.prevent.beEconomic incentives in OSH: Case study report 21 Results and evaluation (4) • Comparison of group with and without funding • Injury trends from 2001-2005 • Injury frequency index shows stronger decrease in group benefiting from funding than the control group

  22. 3 Conclusions

  23. www.prevent.beEconomic incentives in OSH: Case study report 23 Some conclusions (1) • Bonus/malus schemes are often mainly interesting for larger companies • Incentives based on prevention efforts are more interesting for SMEs • Attractiveness of scheme enhanced by • The extent of the incentive • The transparency of criteria • The importance of the administrative burden • The straightforwardness of the communication

  24. www.prevent.beEconomic incentives in OSH: Case study report 24 Some conclusions (2) • New approaches: focus on sustainability and future actions. • Combination of schemes • Subsidised loans for SMEs • Compatibility of different co-existing incentives, social security schemes and other relevant legislation • Effective indicators to evaluate and monitor results are needed.

  25. Thank you ! Marc De Greef marc.degreef@prevent.be

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