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In recent news, Sindh` Labour Department is toying with the idea of donating one billion rupees from Sindh Workers Welfare Fund (SWWF) to CM’s Relief Fund. Despite reservations raised by Employers’ Federation of Pakistan (EFP) itself a member of SWWF’s board - channel checks suggest that approval for the donation has been granted and the monies will soon be donated to CM’s Relief Fund at the expense of what duly belongs to workers.

Sources say that EFP had categorically disagreed with the proposal to for donation on the premise that (in EFP’s own words) the “SWWF is employer’s money contributed to be spent on welfare of industrial workers and should not be dished away for any purpose which does not meet this criterion”.

Sindh WWF Act 2014 clearly outlines objectives for which funds may be used for. This includes: (a) financing of projects relating to housing estates, flats or development of plots for workers; (b) financing of other measures for the welfare of workers; (c) cost of management administration; (d) repayment of loans taken for workers’ welfare measures such as education, training, reskilling; (e) investment in government approved securities.

None of these purposes may be stretched to include CM’s Relief Fund as a legal use of SWWF monies, which is why the donation is likely to invite litigations. It would also be a stretch to allow SWWF money to employers, so they pay wages to workers, which the EFP suggests on the premise that employment of industrial workers is under threat due to Covid-19. Granted, that section 8(b) allows the SWWF money to be used for “financing of other measures for the welfare of workers”. But salary or wages is not welfare.

Risks of Sindh’s welfare fund being misused is heightened by the fact that the SWWF has not made public the audited financial statements since its inception to date, and despite repeated requests by its board members, financial statements have not been shared. Nor has other important ancillary information been made public; information such as total contribution made by employers to WWF in Sindh before and after the promulgation of SWWF Act 2014, and the list of employers along with their contribution in recent history.

In addition, documents available with BR Research suggests that minutes of the meetings of the SWWF board are not properly maintained where dissenting notes are not duly recorded; nor are the minutes circulated within the stipulated timeframe. Various board committees such as risks, audit, or legal have not been notified either.

But these are not the only governance risks at the SWWF. According to a May-2018 amendment to the SWWF Act 2014, the secretary, or the CEO of the SWWF Board shall be appointed either from the PAS, ex-PCS or PSS groups, “not below the grade of BPS-20.”

Yet, both the current secretary, appointed in October 2019, and his predecessor, were BPS-19 officials. Both, these officials were ad-hoc appointees, who were later unlawfully regularised and continue to be given important positions in stark violation of a 2015 order by Supreme Court (SCMR-1752 and CA No. 28-K of 2013) which is still pending implementation. Such lapses in governance only add risks to workers’ welfare in Sindh. (For more on unlawful appointments, read: Sindh's governance at greater risk, Aug 8 2019)