By Lucky Fiakpa
The rising incidence of collapsed buildings across the country have often left victims licking their wounds when they could have benefited immensely if the buildings were insured under the Public Building Insurance scheme, Lucky Fiakpa writes
Again, another building collapse in Lagos aÂ Â Â fortnight ago and not less than eight peopleÂ Â are reported dead. Lagos State Director of Fire Services Adedeyo Aderemi says 42 people were rescued from the rubble and given medical attention.
Several dignitaries visited the site of the collapsed building to sympathise with victims. Statements were made either regretting the collapse or condemning the poor quality building materials used.
Kunle Awobodu, the chairman of the Nigerian Institute of Building, who visited the scene of the accident with other members of the organization, said the government should expedite effort to check incessant building collapse in the state. â€œThis is a very tragic thing that we continue to lose lives in building collapses. We are not happy visiting collapsed sites.
â€œYou can see that this building is very old, and even the sand and iron used are of low quality. Our technical committee has made recommendations to the government that will help stop these collapses but nothing has been done due to bureaucratic bottlenecks,â€ Mr. Awobodu said.
Statements such as this are quite common whenever there is an incidence of building collapse and nothing further is done. The victims are left to lick their wounds and life goes on until another incidence is recorded.
Omolayo Thomas, the Director of the Mainland Local Government Elders and Advisory council, who represented the Council Chairman at the site of the collapsed building, said the local government will only pay compensation. â€œI want you to know that there is nothing that the council can do than to compensate the victims.
This is a Federal Government building. We hear that the building which was a warehouse was reconstructed into two storey residential building; the persons involved should be dealt with,â€ Mr. Thomas said.
Public Building Insurance
The hopeless situation Mr. Awobodu has given to the victims would have been a different story if the owners of the building were made to know of the existence of the Public Building Insurance scheme. Sections 64 of Insurance Act 2003 provides for the insurance of victims of collapsed buildings under construction.
Specifically, it provides for a legal liability cover since government may not force owners of buildings under construction to insure the entire liability of the asset. Similarly, insurance of public buildings covers the owners of such buildings against damage to third parties assets or destruction of lives. The policy sets a minimum standard for compensation of third victims in case of fire, or other accidents while in such buildings.
The Act stipulates compulsory insurance of public buildings and buildings in the course of erection that is up to two-storey and above. The problem had been that the relevant law was not given prominence and that is why members of the public are not aware of it. â€œEven within government circle, many are not aware,â€ Mr. Fola Daniel, the Insurance Commissioner said in an earlier interview.
In order to create the needed awareness, NAICOM had to launch the scheme in Abuja last year August. The next port of call, according to the Insurance Commissioner, would be Lagos. In fact, the Lagos leg, which is expected to represent that for the South-West geo-political zone, would have been done if the state governor, Mr. Babatunde Fashola, had given the Commission a date for the launch before now.
Well over three letters are said to have been written to the governor to give his nod for the launch of the scheme in Lagos and NAICOM is still awaiting reply. It is hoped that another building will not collapse before reply is given to the NAICOM request.
After the Lagos launch, the Commission intends to launch the scheme in all the other geo-political zones of the country. â€œThe reason we havenâ€™t done it in Lagos is because weâ€™ve not been able to get a date from the governor. But he has assured us that very soon he will give us a date because he shares the vision of what we are trying to achieve. So once we get a date we will come and launch it.
â€œWe want the launch supported or driven at the highest political level in any of the geo-political zones. If we want to do it in Port Harcourt for instance, we will not launch unless the governor is there because he is the chief security officer of the state,â€ Daniel said.
The essence of the launch, according to the commissioner, is to create the needed awareness before commencing the enforcement of the law. The Commission has warned on the consequences of not complying with the Public Building Insurance regulations as stipulated in Section 64 of the Insurance Act of 2003.
The Commissioner noted that â€œThe number of buildings that are collapsing and the innocent lives that have been lost is not comparable to anywhere else. Some buildings have collapsed in Ilorin, the Kwara State capital. Three buildings collapsed in Kano last year and people lost their lives.
A building collapsed in a remote place near Awka, a nursery school, where we saw a two-year old child being pulled out of the debris dead,â€ Daniel recalled with pains.
Arising from this background, he stated that if anyone fails to insure his or her building, â€œthereâ€™s a penalty and they can be prosecuted for not insuring and if found guilty can be sent to jail or fined or both. So it is not lame-duck legislation. There are penalties for failing to insure,â€
He stated that NAICOM will enforce the law in collaboration with other stakeholders. His words: â€œThe National Insurance Commission is just going to be the driver of this enforcement. We are collaborating with several stakeholders who are related to public buildings mattersâ€.
He however said that it will be out of place to start enforcement of the legislation when the public is not aware of it yet. â€œIt is not fair if we have not created some form of awareness and you go every day arresting people, youâ€™ll make a huge nuisance of yourself. We need to create awareness and one of the best avenues for doing is to do this launch,â€ he stated.
Incidence of Collapse Buildings
A good number of Nigerians seem to favour the Public Building Insurance awareness drive given the rising incidences of collapse building all over the country.
Over 30 people were killed in July 2006 when a 4-storey building collapsed in the in the Ebute Metta area of Lagos. The Nigerian Red Cross said around 75 people were inside the building which also housed restaurants and 18 shops on the ground floor as at the time it collapsed. Several survivors were hauled from the wreckage, and it took more than three days after the collapse for rescue operations to be completed.
The collapse of the building, said to be three years old, was blamed on poor construction. Other reports have it that approval was only given for a two storey building on the site, but was later converted into four storey.
Earlier on in March, 11 people were killed in Aba, south-east Nigeria when a building that was still under construction, collapsed, trapping workers in its rubble. Those confirmed dead were some of the 20 workers working on the building in the densely populated part of the town, the commercial heartbeat of Abia State. Reports have it that the workers were busy on different floors of the multi-storey building when the accident occurred.
It was the second building collapse in Nigeria in two days. Some 25 persons were rescued from the debris of an 18-storey building, which had collapsed in Lagos, Nigeriaâ€™s business capital two days earlier.
Budget for Public Buildings Insurance
Perhaps, disturbed by this development and the need to lead by example, the federal government, in the 2009 budget, made some attempt to provide for payment of insurance premiums on the compulsory insurance of public buildings and buildings above two floors under construction.
The Ministry of Finance, while preparing the budget, requested all ministries, departments, agencies (MDAs) to include premiums for government buildings as well as buildings to be constructed in their budgets.
The then Minister, Dr Shamsuddeen Usman, informed a gathering of insurance leaders and stakeholders in construction and building industry that the Finance ministry awaits the inclusion of funds for the payment of premiums on governmentâ€™s public buildings and buildings to be constructed in 2009.
He said the federal government has directed that all MDAs comply with the provisions of the Insurance Act 2003 as it relates to insurance of public buildings and buildings under construction.
With the commencement of the public buildings insurance, he was confident the insurance sector â€œreforms are beginning to yield dividends. He recognized the marketâ€™s increasing capacity to deal with larger risks and disclosed governmentâ€™s readiness to open up areas for local participation in mega risks in the energy industry.
Government and Insurance Premium
It is not confirmed if the MDAs complied with this directive and have been paying their premiums as well. It is one thing for government to recognize the need to insure its public buildings but it is another for it to honour its premium obligations. From records, government is the biggest defaulter in respect to payment of premiums.
At a meeting of insurance industry operators recently, it was observed that government was the biggest defaulter in respect to payment of premiums. It was also observed that government was in a position to push for more patronage by ordinary citizens if it provided a good example.
According to the operators, the government was yet to implement any of its insurance obligations stipulated in both the 2003 Insurance Act and 2004 Pensions Reform Act.
The 2003 Insurance Act, Section 65(1) states that every public building shall be insured with a registered insurer against the hazards of collapse, fire, earthquake, storm and flood.
The 2004 Pensions Reform Act, Section 9(3), made group life assurance compulsory for all employers with at least five employees and above.
The National Health Insurance Act provides for compulsory professional indemnity insurance for health monitoring organisations, which is yet to be explored.
The National Insurance Act, 1997, states that there should be adequate protection of strategic government assets; hence the protection of government assets through insurance is compulsory under the law.
Nigerian insurers have, however, begun to show their zeal, not just to call on government to pay premiums, but to also forge a stronger alliance to achieve set goals.
The Managing Director, Unity Kapital Assurance Plc, Alhaji Mohammed Kari, noted that there was need for the government to imbibe the culture of insurance and pay its premiums regularly. He said that while the government could be commended for the initiative behind the consolidation of the industry, which had helped to give the sector a new look, government was yet to put into practice most of its insurance responsibilities.
Kari said that if the government would lead by example by paying its premiums, insurance business, would no doubt; develop beyond its present level. While citing the general insurance business as an example, Kari said that the compulsory insurance of public buildings was one aspect that the government should start to pay premiums on. Just as the practitioners of the general insurance companies were still expecting their premiums from the government, the life insurance practitioners were not left out.
The Managing Director, Crusader Life Insurance Plc, Mr. Abidoye Oyelami, said that the effect of the group life policy, under the Pensions Act was yet to be felt. The group life assurance package provides compensation for death or permanent disability of workers during the course of employment. He said that the operators lacked the power to enforce the policy because the National Pension Commission is the regulatory authority in charge of it.
Despite the fact that the act stipulates its compulsion, Oyelami said that the government which enacted it had not taken the policies for the civil servants. He said that recently, the government said that its group life policies had been put in place, but that insurers were yet to get the premiums.
The Managing Director, FBN Insurance Brokers, Mr. Val Ojumah, said that there was the need for the public sector to change its ways. He said that if the government did not buy insurance and pay premiums, the citizens would invariably not be encouraged.
He said that since the enactment of the civil service group life scheme about four years ago, government had not paid premium to any life companies. He added that the scheme, if embraced would be the biggest thing to happen to the life insurance business in Nigeria.
Mr. Wole Oshin, chairman, Nigerian Insurers Association, NIA, on the other hand said that there was the need for the insurance industry to tackle legal issues if the industry was to reap the benefits of recapitalisation. He cited the issues of proper enforcement of local content policy as it affected the insurance business, enforcement of Section 64 and 65 of the Insurance Act, 2003, which dealt with public buildings and building under construction. Others, he said, were the implementation of Section 9(3) of the Pensions Reform Act and the enforcement of other compulsory insurance schemes.
The Commissioner for Insurance attributed the non-implementation of the compulsory insurance policies since their enactment, to lack of strong lobby groups in NIA.
He said that if the body could forge a stronger alliance, it would be able to achieve its objectives in getting the government to make provisions for insurance premiums in its budget, which was an area that could make a remarkable impact on the industry.
Daniel said that the implementation of the compulsory insurance of buildings under construction was being worked out. According to him, this would ensure that builders necessarily procure an insurance policy before any construction commences.
Role of Insurance Companies
Even at that, insurance operators still need to take up the challenge of marketing the policy within the targeted market. The public building insurance Act is not new. What is on is an awareness drive. Having launched the scheme in Abuja, at least, it is expected that insurance companies should have been all out canvassing for business under the scheme.
The Insurance Commissioner, Mr. Fola Daniel, also think likewise. â€œWe have done the launch in Abuja, they (Insurance companies) should go out and canvass for business under the scheme,â€ he told Financial Vanguard last week.
He believes just as they canvass for business under fire, accident and other forms of insurance policies, they should do same with the public building insurance â€œeven as we continue the launching exercise in other statesâ€.
While insurance is about providing compesation to victims, Nigerian Institute of Building (NIOB) believes there is a need to establish a law guiding building of houses in Nigeria to curtail incessant collapse of building in the country.
The first Vice President of NIOB, Builder Dachollom Dalyop Jambol, in a recent media report said that until such a law is enacted, building would continue to collapse because building is currently being handled by non professionals. He added that the association presently has only a building code which cannot be enforced because it is yet to be backed by a law.
His words: â€œThe building code is not a law; we need a law to give the code a backing. We do not have planning law to support this code; a planning law empowers those who supervise building. We should also have development control law.â€
He also said that the country need a building research institute that would guide professionals charged with the responsibility of building. â€œPresently, research in this country is suffering. We need to have confident in our research, a confident that we can do itâ€, he said.