Skip to main content

Costs due to lack of occupational health and safety measures estimated at $76 billion yearly in Latin America

More than a hundred international experts discussed policies and mechanisms to prevent exposure to physical, chemical, biological and psychosocial hazards in the workplace at a conference at the Inter-American Development Bank on June 19-20. The meeting on Occupational Safety and Health focused on the economic and social costs of this frequently overlooked issue of work-related hazards in Latin America and the Caribbean.

Lack of conscience and poor enforcement of occupational safety legislation expose up to 80 per cent of Latin America´s rapidly growing labor force of more than 200 million people to work-related accidents and health consequences with a yearly estimated cost of $76 billion, according to calculations.

Although information is scarce due to under-reporting and inconsistent registration of injuries and illnesses, data presented at the conference showed that developing countries suffer huge losses due to work-generated illnesses, accidents and deaths, amounting to up to 10 per cent of gross domestic product.

The United Nations International Labor Office reports also show that these costs are absorbed by both the region’s private and public sectors. The latter still concentrates the largest portion of the workforce even after the privatization process that took place in Latin America.

"We should work with countries and international organizations to assure safe and efficient labor conditions for workers and to install this issue in center stage for debate, because it is a critical factor for economic and social development," said IDB President Enrique V. Iglesias in the opening session of the two-day conference.

As a key element in development, occupational safety and health conditions not only have direct and indirect impact on public health, but also on areas such as income and poverty, labor productivity, labor market, social security systems, environment and international trade.

"Many efforts are lost in the region due to a general lack of consciousness among the population about risks in the workplace, the underestimation of the magnitude of the problem and the lack of adequate institutional infrastructure," added Iglesias. "But there is growing interest in the subject in the region as shown by reactions, like those against sweatshops and child labor."

In Latin America, factors such as the expansion of the informal sector ¾ including self-employment, domestic service and microenterprise — higher unemployment rates, low collective bargaining, greater labor mobility and growing women participation in the workforce are factors to consider when analyzing better enforcement of safety measures, said Ricardo Paredes Molina, dean of the School of Business and Economics at the University of Chile.

"Besides the fact that the priority in the region is to generate employment, the occupational safety problem is not visualized clearly," said Paredes, who delivered comments on an IDB working paper.

Underscoring the importance of public policy and enforcement instruments, he stressed that "the challenge is sometimes to achieve a trade-off between having less safe employment or a more expensive one." But in many cases one might not exclude the other when there is an increased productivity. Incentives to businesses for prevention may play an important role, so that employers do not see safety measures as "a tax on employment," he added.

Paredes also pointed out that the dimensions of Latin American cities, larger than most urban centers in the rest of the world, create problems such as pollution, longer transportation times and security.

Experts from international institutions and the public and private sectors and labor organizations from Argentina, Brazil, Chile, Colombia, Costa Rica, Mexico, Peru, Sweden and the United States participated in different panels that examined the economic dimensions of occupational safety and health, as well as global policies, regulations and initiatives to improve safety in the workplace.

El Salvador Labor Minister Jorge Isidoro Nieto, who also coordinates the Group of Labor Ministers of Central America, spoke about an Occupational Health Plan the group is preparing for their region. Brazil´s Ambassador to the United States Rubens Barbosa commented on the Brazilian Government´s plan to introduce elements of occupational safety and health in negotiations with the multilateral community.

Panelists discussed standard-setting in relation to free trade and integration. They also reviewed the impact of health and social security reforms, the situation of vulnerable social groups, incentives for small- and medium-sized enterprises, and sectoral approaches for high-risk industries, such as mining, construction and farming.

For economic and human reasons, data and examples discussed showed plenty of opportunities for improvement in occupational health and safety in easy and cost-effective ways, particularly in the formal sector of the economy, to give more opportunity to around three million workers that loose their well-being or their lives yearly for preventable conditions.

Seventeen million children between the ages of 5 and 14 work in Latin America, many times under hazardous conditions. Other vulnerable groups include women, migrants and minorities, working frequently in unsafe and uncontrolled conditions in the informal sector.

Experts from the International Commission on Occupational Health, the IDB, the International Labor Office, the Organization for Economic Cooperation and Development and the Pan American Health Organization/WHO debated the role of multilateral agencies in policy-setting.

A closing panel summarized the issues and trends for an occupational safety and health agenda for the IDB to help finance and foster reforms and projects in countries interested in improving their productivity, efficiency and safety in the workplace.

The conference was sponsored by the Swedish Trust Fund and the IDB’s Multilateral Investment Fund.

Jump back to top