Economic Evaluation Proceedings Paper
An overview to CERSSO's self evaluation of the cost-benefit on the investment in occupational safety and health in the textile factories: “A step by step methodology”

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Abstract

Introduction: The Pan American Health Organization (PAHO) and CERSSO collaborated to develop a new Tool Kit (TK), which became available in May 2002. PAHO already had a TK in place, and CERSSO requested that one be developed for their needs. CERSSO wanted to enable managers and line workers in garment factories to self-diagnose plant and workstation hazards and to estimate the costs and benefits of investing in occupational safety and health (OSH) as a way to improve productivity and competitiveness. Methods: For consistency, the collaborating organizations agreed to construct the TK according to PAHO's methodology. The instrument was developed to be comprehensive enough that any user can collect the data easily. It integrates epidemiologic, risk assessment, clinic, engineering, and accountability issues, organized to include step-by-step training in: (a) performing risk assessments in the workplaces (risk factors); (b) making cause–effect relationships; (c) improving decision making on OSH interventions; (d) doing calculations of direct and indirect costs and savings; and (e) doing calculation of the overall cost-benefit of OSH interventions. Results and Conclusions: Since July 2002, about 2,400 employees and officials from 736 garment factories, Ministries of Labor, Health, Social Security Institutes, and Technical Training Institutions of Central America and the Dominican Republic have used this instrument. Systematically, they have calculated a positive relationship of the investment (3 to 33 times). Employers are now aware of the financial rewards of investing in OSH. The TK is available in Spanish, Korean, and English. In July 2003, a software program in Spanish and English was developed (180 persons have been trained in the region), which requires less time to execute with better reliability.

Introduction

During the winter of 2001, the Directors of CERSSO's project (Ronald Venezia and Dr. Marvin Lund) asked the coordinator of the Pan American Health Organization (PAHO) team that developed a Tool Kit (TK; Amador and López, 2003, La Montagne, in press) to build a TK able to evaluate the cost benefit of investing in occupational safety and health (OSH) in textile factories of Central America and the Dominican Republic.

For confidentiality reasons, it was requested that this TK be used as a self-evaluation instrument and be comprehensive enough so that any user can collect the data from scratch, (considering unreliable or nonexistent current data at most factories).

It was agreed to construct this TK according to the general rationales of PAHO's methodology, so that both TK's could be complementary and homogenous in their approaches to: (a) seek endorsement from organization owners and managers by demonstrating that workplace health promotion is possible, beneficial, and sustainable; and (b) promote empowerment of the workers and their active participation in guiding the initiative. Hence, permission to PAHO's officials (Dra Maritza Tennassee) was requested to use modules 7 and 8 of the 11 modules of PAHO's TK.

CERSSO's newly developed Tool Kit was named Self Evaluation of the Cost-Benefit, on the investment in Occupational Safety and Health in the textile factories: A Step by Step Methodology.

This Tool Kit is an integration of epidemiologic, risk assessment, clinic, engineering, and accountability issues, organized in a logical way. With the use of this TK, evaluating the cost-benefit of the investment in occupational safety and health at the organizational level requires little or no professional background in data collection; all professional levels can easily use this instrument.

Through the CERSSO project, up to June of 2004 more than 2,500 people from 736 organizations in 8 countries have used the Tool Kit. Systematically, they have calculated a positive relation of the investment (3 to 33 times). No inverse relation has been seen. Employers become convinced when they learn how much money they have been losing because they have not invested in OSH.

Approximately 50% of these organizations have conducted self-diagnostics to better understand the cost of accidents and injuries. Stakeholders “unanimously [declare to the Cost-Benefit Toolkit, to be] a highly practical and beneficial diagnostic tool.”

To further improve the TK methodology, it has been converted into a software program. When using the original paper version, users typically spent up to 24 hours gathering information and doing calculations. With the software, the time has been cut down to 6 hours and the reliability has improved.

This new software version of CERSSO's Tool Kit has been integrated as part of PAHO's Tool Kit. At the same time, several official institutions and associations in the textile sector of Central America and the Dominican Republic are using it. This version is under study by the American Apparel and Footwear Association (AAFA) and the Fair Labor Association (FLA), to promote its use among their affiliated companies worldwide.

Originally, this Tool Kit was designed as a self-use instrument for organizations to calculate how much money they were losing by not investing in OSH. Once this goal is achieved in a company, the same Tool Kit can be used in the process of implementing OSH programs in the factories.

Section snippets

The process

The following are details on how the Tool Kit is used.

First, the user is instructed on how to understand the work process where he/she is to perform the cost benefit analysis. In the textile industry, the work is organized in Assembly Line format, where the work and time a worker puts in are directly related to the rest of the individuals in his/her assembly line of production.

This type of production produces an impact on the costs of production, not only caused by the person directly affected,

Analysis

When teaching about or using this Tool Kit, it has been observed that users have a tendency to overestimate the costs of the interventions (or prevention) and underestimate the cost caused by the effects. In step 6, it was explained that the cost-benefit ratio was calculated by putting the cost of the effects as the numerator and the cost of the interventions as the denominator, which arithmetically produces an underestimation of the cost-benefit ratio.

This is an important issue to have,

Rafael Amador Rodezno, M.D., M.P.H., M.Sc. Fourteen years working as a Faculty member in Medical School of National Autonomous University of Nicaragua in Leon. Teacher and Researcher. Three years working as a National Consultant for PAHO in Nicaragua. Nine years working as Consultant in all Central America, Dominican Republic, Argentina, Peru, Belize and Washington DC for PAHO, WHO, ILO, UNICEF, DANIDA, IICA, OIRSA, UNDP, USDOL, Abt Associates. Started to work on January 2003 and finished on

References (3)

  • Amador, R., López, M. A. (January, 2003). PAHO's Tool Kit to develop Healthy Workplaces in Latin America and the...
There are more references available in the full text version of this article.

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Rafael Amador Rodezno, M.D., M.P.H., M.Sc. Fourteen years working as a Faculty member in Medical School of National Autonomous University of Nicaragua in Leon. Teacher and Researcher. Three years working as a National Consultant for PAHO in Nicaragua. Nine years working as Consultant in all Central America, Dominican Republic, Argentina, Peru, Belize and Washington DC for PAHO, WHO, ILO, UNICEF, DANIDA, IICA, OIRSA, UNDP, USDOL, Abt Associates. Started to work on January 2003 and finished on August 2004 as the Regional Technical Director of CERSSO. Currently is the President of SISSAT, SA in Nicaragua. Author of CERSSO´s “Self Evaluation of the Cost-Benefit, on the investment in Occupational Safety and Health in the textile factories: “A Step by Step Methodology.”

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