Observation (CEACR) - adopted 2009, published 99th ILC session (2010)

Social Security (Minimum Standards) Convention, 1952 (No. 102) - Bolivia (Plurinational State of) (Ratification: 1977)

Bolivia has accepted the Parts of the Social Security (Minimum Standards) Convention, 1952 (No. 102), concerning medical care, sickness benefit, old-age benefit and survivors’ benefit. It has also ratified Conventions Nos 121, 128 and 130 which set higher objectives relating to social protection. Given that the problems relating to the application noted by the Committee are essentially the same for all these Conventions and are of a systemic nature, the Committee wished to make a number of general observations concerning all the international obligations arising from these instruments for Bolivia. It referred to the information provided by the Government and to the studies carried out by the ILO concerning the Bolivian social security system (Diagnóstico del Sistema de Seguridad Social, April 2009).

Recognition of the right to social security by the new
Political Constitution of Bolivia

Since February 2009, a new Political Constitution has guaranteed the right of citizens to benefit free of charge from social security based on the principles of universality, comprehensiveness, equity, solidarity, standardized management, economy, opportunity, inter-cultural approach and efficiency (articles 35–45). Under the new Constitution, the State shall be responsible for administering the system under the supervision and with the participation of the social partners. The Constitution extends the right to medical care to the entire population and lays down the duty of the State to protect the right to health, in particular by promoting free access by the population to health services. The State has a duty to ensure access to universal health insurance and the irrevocable obligation to guarantee, financially support and ensure the right to health. The Constitution also expressly guarantees the right to a universal, solidarity-based and fair old-age pension, as well as the principle that public social security services will not be privatized or contracted out.

Under article 256 of the new Constitution, the rights recognized by the Constitution shall be interpreted in accordance with the provisions of the international Conventions ratified by Bolivia whenever those conventions contain more favourable standards. Article 410 of the new Constitution provides that the international treaties and agreements ratified by Bolivia form part of the constitutional provisions and take precedence over laws. The Government emphasizes in this regard that, contrary to the situation which prevailed under the former Constitution, international labour Conventions are therefore placed above national laws. For that reason, the Government envisages drafting new laws and regulations to give effect to the international labour Conventions ratified by Bolivia.

The Committee notes with the greatest interest the adoption of the new Constitution which establishes a series of basic principles with regard to social security and the provisions of which are among the most progressive in Latin America. It also notes that the recognition under the Constitution of the principle of the supremacy of international law over national law paves the way for the use by Bolivia of international social security standards as a regulatory framework and legal lever for putting the social security system on the road to sustainable development.

The Committee would be grateful if the Government would indicate whether it intends to examine the current social security legislation in the light of the provisions of the ILO Conventions ratified by Bolivia. It hopes that any future reforms of the social security system, such as the reform currently under way of the pension system, will be based on the principles of solidarity and collective financing enshrined in the country’s new Political Constitution and aimed at the gradual extension of the benefit of social protection to the entire population of Bolivia.

Extension and restructuring of the social security scheme

The level of coverage of the social security scheme currently remains one of the lowest in the region. However, a number of recent measures have resulted in progress being made, with regard to health protection, through the introduction of universal insurance for mothers and children (SUMI) and free old-age medical insurance (SMVG). However, the health system remains very fragmented between the public assistance targeting the most vulnerable, the social security scheme directed at the employed population and their beneficiaries, and the private actors focusing on the higher income brackets. A rational restructuring would allow efforts to increase membership of the system to be coordinated, a series of basic health benefits to be defined giving effect in practice to the right to health protection for all and major economies of scale to be made with regard to both administrative management costs and the financing of care facilities.

Membership of the pension scheme also remains very low despite the introduction in 1997 of the new funded pension scheme which replaced the pay-as-you-go scheme based on solidarity. In order to remedy that situation, the Government recently established a universal non-contributory pension paid to all persons over 65 years of age, which has produced tangible results. A reform of the pension system is currently under way and a bill has already been approved by the Chamber of Deputies and is to be submitted to the Senate. The bill establishes a mixed pension scheme comprising a contributory and semi-contributory scheme and a non-contributory system. It also creates an invalidity and survivors’ scheme for common and occupational risks, as well as a specific invalidity and survivors’ insurance scheme for self-employed workers.

According to the 2009 ILO study, the weak coverage of the social security system with regard to health protection and pensions is largely due to the structure of the labour market and the fact that the social security scheme is essentially focused on covering the employed population benefiting from a relatively stable formal employment relationship and working essentially in large urban enterprises. However, given that this workforce accounts for only 25 per cent of the total workforce, the large majority of the economically active population, which comprises self-employed, domestic and rural workers, is excluded from the compulsory social security scheme, even though they represent more than two‑thirds of the country’s population. This situation is compounded by considerable evasion of contributions even within the formal economy. The combination of these two factors leads to a very low overall rate of health coverage of the economically active population (13.5 per cent in 2003). Access to health services in rural areas remains very limited with only 6 per cent of the rural population being covered. Furthermore, the high number of actors and the lack of coordination constitute yet more factors which contribute to keeping the coverage of the population at a very low level and perpetuating the lack of a comprehensive strategy in this regard. As regards old-age, invalidity and survivors’ risks, the Government indicated in its report that only 38 per cent of employees of large enterprises employing over 20 persons are covered. The economically active persons affiliated to the old-age, invalidity and survivors’ scheme represented only 5 per cent of the total number of residents. The problem of poor coverage is particularly pronounced with regard to self-employed workers and in agriculture, with only 4 per cent of Bolivian self-employed workers being affiliated to a pension fund administrator in 2007. In view of these factors, there is a need to adjust the Bolivian social security model in line with the economic and social reality of predominantly self-employed informal employment. The gradual compulsory membership of self-employed workers is a possible means of ensuring coverage of a large proportion of the population not yet benefiting from any social security coverage. State support in the form of social contribution subsidies would be an important component to ensure the success of such an initiative. The Committee would be grateful if the Government would provide information in its next report on the solutions found to increase the rates of membership and coverage and indicate the progress made with regard to reforming both the pension scheme and the health scheme.

The separation, since 1987, of the management of the short-term benefits scheme and the basic long-term scheme has resulted in each of these schemes devoting a significant proportion of their resources to the performance of administrative and operational functions, particularly those relating to membership and the collection of social contributions. Studies show that the establishment of centralized management with regard to the collection of benefits and supervision of compliance with the obligation to join the social security scheme would allow significant results to be achieved in terms of coverage and would ensure better coordination, planning and linking of strategic activities regarded as priorities from the point of view of the entire system. The creation of an independent specialized body responsible solely for supervising and controlling the social security system, without participating in the management of the system’s programmes, is another necessary component for the proper operation and viability of social security systems. The Committee requests the Government to provide information on the structural measures taken or envisaged with a view to optimizing the structure of the social security system.

Creation of a national strategy for the development of social security

In 2001, the International Labour Conference (ILC) reaffirmed the central role of social security and reiterated that it was a challenge which all member States had to tackle as a matter of urgency. The resolution adopted by the ILC in 2001 recognizes that “the highest priority should be given to policies and initiatives that bring social security to those who are not covered by existing systems”. To achieve that objective, the Conference urged every country to devise a national strategy closely linked to other social policies. States such as Bolivia which are party to the International Covenant on Economic, Social and Cultural Rights (ICESCR) are also required, according to the general observations made in 2007 by the United Nations Committee on Economic, Social and Cultural Rights (CESCR), to devise a national strategy for the comprehensive implementation of the right to social security and to allocate sufficient budgetary and other resources at the national level. The Committee considers that the need to devise a national strategy arises from the general responsibility of the State, established by Convention No. 102, to ensure the continuity and proper operation of the social security system. The launch of a national strategy designed to ensure the strengthening and sustainable development of the social security scheme, taking into account the above concerns, would allow the State to exploit to the full all the potential offered by international social security standards with a view to ensuring the proper administration of schemes and enabling the gradual extension of coverage to the entire population. The Committee draws the Government’s attention to the possibility of making greater use of technical assistance from the ILO with a view to devising, together with the social partners, a national strategy for the sustainable development of social security.

[The Government is asked to reply in detail to the present comments in 2010.]