15 Feb 2020 – NTUC Phl says compliance certificate and/or clearance on compliance with certain laws
should be a requirement for granting loans or financial aid to private individuals or companies
There should be a law requiring banks and other financial institutions (SSS) to require borrowers to disclose compliance with labor laws and social legislation, says NTUC Phl Vice President Ruben Torres.
Currently, among the usual requirements for a loan are:
1. Submission of a business plan
2. Financial Statement
3. Credit worthiness assessment/investigation
4. In some cases borrowers are required to submit police and NBI clearances, and
5. Environmental protection schemes/clearance
These requirements are supposed to make sure that borrowers deserve the credit and could be trusted to repay their loans.
There is no requirement that companies or individuals seeking loans are complying with mandated obligations under labor laws and social legislation. There are companies which successfully secure loans from banks and financial statements even as these companies/individuals have transgressed labor, social and environmental legislation.
Among the most number of transgressions of business owners are:
1. Busting labor unions, including commission of other unfair labor practices
2. Non-payment of mandated minimum wages and other benefits
3. Non-remittance of employer and workers SSS contributions
4. Non-payment of overtime, night differential, holiday pay
5. Discrimination against women and workers with disability in hiring, promotion and
in other terms and conditions of employment
6. Hiring child labor as in agricultural and quarry operations
7. Non-compliance with health and safety regulations
Violations of labor and social legislation are redressed only through complaints of workers or through government-initiated inspections. If workers do not complain for fear of losing their jobs or if workplaces are not inspected by government inspectors, then employers are not made to account and workers do not get redress for their grievances.
Requiring companies/individuals to submit clearances from appropriate government agencies that they have no record of transgressions of labor, social and environmental laws before they can be given loans by banks and other financial institutions will improve the compliance rate of these legislation.
RUBEN D. TORRES
NTUC Phl
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