Under the Labour Market Governance Reform Programme of ILO (Nepal), social security is a crucial component. The Interim Constitution of Nepal (2007) stipulates the right to social security and the duty of the State to adopt a policy of providing economic and social security to the dispossessed and vulnerable.
The improvement of labour market governance in Nepal must be accompanied by the development of appropriate social security mechanisms to protect workers and their families from the insecurities associated with flexibility and to make adjustments to labour market changes as painless as possible.
The Government of Nepal and the social partners recognize the need for social security reform and development that is compatible with the social needs and available fiscal space in Nepal.
A tripartite workshop on social security held in January 2010 in Kathmandu recommended to follow a two-dimensional strategy consisting of a horizontal and a vertical dimension, with employers’ emphasizing the vertical dimension.
During the workshop, the Government of Nepal and the social partners conclude to promote the following strategy for the extension of social security in Nepal:
- The extension along the horizontal dimension should consist in the provision of the social protection floor through the four social security guarantees. As there are already components of the basic benefits in place in Nepal, it is envisaged to undertake as a first step to carry out a comprehensive review of all existing basic social security provisions and measures. On the basis of this review, an analysis of gaps in scope of coverage and levels of benefits should be undertaken. A social budget should be carried out, priorities identified and measures proposed and financially assessed. On the basis of this analysis, proposals for policy decision should be formulated and put forward for implementation.
- The extension along the vertical dimension will consist in the reform of the existing social security system and particularly the development of new social insurance benefit schemes. The reform strategy should be guided by basic social security principles, international social security standards, and in particular ILO Convention No. 102, and international best practices. In order to ensure the sustainable and comprehensive development of social security, the ratification of Convention No. 102 is envisaged as priority. It is also recommended that the ratification of Convention No. 158 is pursued at the same time. The establishment of a study on the implications of the ratification of both Conventions will be undertaken. As Convention No.102 requires the existence of at least three social security branches, including one long-term benefit or unemployment benefit, the strategy will focus on the extension of social security to new branches, namely: unemployment insurance benefit, employment injury insurance benefits, maternity insurance benefit and sickness insurance benefit.