Unpaid Kuwait funds to be used for migrant worker pension scheme

The Sri Lanka Bureau of Foreign Employment (SLBFE) will start a contributory pension scheme for overseas employees using leftover Kuwaiti compensation money remitted to pay Sri Lankans affected by Iraq’s invasion of that country in 1990.

The Auditor General’s 2015 report said there was a balance of more than Rs 3.2 billion (around US$ 20 million at the prevailing exchange rate) in the Kuwait compensation fund. This was falsely shown in accounts as ‘capital reserve’ when it should be ‘long-term liability’.

But the total outstanding amount of unsettled claims is a little more than Rs 251 million or one percent of the total number of claims, the SLBFE said, issuing a statement after the Sunday Times wrote the story last week.

More than Rs 2.962 billion was interest income earned from 1997 to 2005. It also said the 2016 financials were rectified to identify these amounts as non-current liabilities.

The SLBFE has transferred Rs 1 billion to the Treasury last year. Under the 2017 budget proposals, a contributory pension scheme for overseas employees will be set up using the balance.

Around 120,000 Sri Lankans working in Kuwait lost their jobs and possessions in the Gulf War which took place in 1990- 91, the SLBFE said. The United Nations Compensation Commission ( UNCC) approved 88,875 of the 94,820 applications received by the SLBFE from affected Sri Lankans. A unit named ‘Kuwait compensation’ was established locally to handle the process.

The UNCC approved US$ 308 million (around Rs 20,900 million at the time). This was placed in temporary deposits from the inception and the interest accrued was credited to the Kuwait fund. The compensation unit processed 87,934 claims on confirmation of their authenticity. The value of the balance one percent of unsettled claims was Rs 251mn.

The SLBFE wrote to the claimants who had failed to provide necessary documentation. It also pub- lished newspaper advertisements asking them to come forward. “However, this figure remains unsettled due to want of requisite documentation,” the Bureau said.

Meanwhile, the claims of 5,945 Sri Lankans were rejected by the UNCC. In response to their continued appeals, the Cabinet in September 2002 approved the settlement of 1,692 verified claims from the interest accrued.

The same year, the SLBFE conducted a countrywide survey to gather details of remaining victims. This led to the identification of 15,500 cases ( including claims lodged after December 1994), rejected claims from previous payments and claims not made.

On Cabinet approval granted in September 2007, compensation of Rs 75,000 per claimant (there were 5,472 of them) was paid from interest income. The balance remains unsettled due to want of documentary proof, the SLBFE says.

The SLBFE was also taken to task by the Auditor General for an overall weakness in facilitating compensation for registered workers in relation to various losses. An insurance scheme was launched in June 2012 by SLBFE together with Sri Lanka Foreign Employment Agency ( Pvt) Ltd for the workers who travel abroad on employment after registering with the Bureau. The SLBFE paid the agency an annual sum of Rs 594,890,103 (inclusive of taxes) as insurance premium from 2013 to March 2015 until the agreement ended.

The dependents of an insured and registered migrant worker are entitled to Rs 400,000 in case of his or her demise. But, by stating that the dependents of 281 migrants who died in 2014 and 2015 had not lodged their claims under the insurance agreement, it had been neglected to pay out compensation totalling Rs 112.4 million, the Auditor General’s report said. The dependents had simply not been informed of their entitlements.

The SLBFE said this week that these dependents had not lodged their claims to the welfare division within the specified time period. “As such, no claims could be processed,” it asserted.

The Auditor General’s report pointed out that, while the SLBFE’s legal division had identified the heirs of 46 deceased migrants, compensation totalling Rs 18.4 million due to them had not been paid even up to January 19, 2016. The Bureau said this has now been settled in 37 cases while four were rejected. Five could not submit complete documentation and the dependents have been advised to do so. All other cases highlighted by the Auditor General were also dealt with.