Earthquake insurance is a new tax, Turkish labor group claims

Published September 27th, 2000 - 02:00 GMT

Turkey's new compulsory earthquake insurance comes into effect Wednesday, but some workers groups are calling it nothing more than a new tax. 

 

The Confederation of Progressive Labor Unions (DISK) issued a statement claiming the government was always in search of new revenue sources. 

 

"The decree with the force of law that has been presented as earthquake insurance is actually only a new tax," said General Secretary Murat Tokmak. He said the government was concerned with patching up the budget rather than healing the country's earthquake wounds. 

 

"The government is always in search of new revenue sources because it lacks the competence required of an efficient state," he said.  

 

"They aren't ashamed to exploit the earthquake. We're about to have a new tax on top of the existing ones. The legislation they would like to pass is a new tax in the real sense of the word, although it is being presented as 'compulsory building earthquake insurance.' The method of collecting, levying and spending this money confirms our opinion that it is actually a new tax." 

Tokmak said the state was mortgaging the future of the people instead of worrying about their welfare. 

 

"They want to levy an annual tax, but when the time comes, they will pay back only 20 percent," he said. "What will happen to the remaining 80 percent? It will be used for plunder and exploitation." 

 

Tokmak said the earthquake insurance was "mistaken, unfair and against the people" and warned the government to withdraw the proposal as soon as possible. 

The decree on compulsory earthquake insurance, which was printed in the Official Gazette on Sept. 8, would make housing insurance compulsory. Public buildings would be excluded, and the money would be used for earthquake reparations. 

 

"The aim of the new insurance system is to lower the state's costs in the wake of possible earthquakes, and to cover all residents' losses," the treasury said in a statement last week. 

The Natural Disasters Insurance Agency would sell earthquake insurance documents and license insurance companies to do the same, the latter of which would receive a 12.5 percent commission on their work. 

 

While the ceiling for earthquake insurance would be TL 20 billion, the exact amount of premiums is not yet known. People who are remiss in paying premiums wouldn't be able to enter public transactions; they would be barred from selling or buying title deeds and would also be unable to pay their bills. 

 

Premiums would depend on building quality and official maps of earthquake risk zones. 

According to Turkish official sources, 8 million homes may be covered under the new system, which also does not cover commercial buildings. 

 

Turkey's biggest insurance company, Milli Reasurans, would manage it. The treasury would also control the accounts. Sector officials said there were uncertainties about the involvement of international insurance companies. 

 

"Without insurance companies, it would not be possible to run this system. There are some bids from insurance firms, but their shares will become clear by the end of this month," Milli Reasurans General Manager Cahit Nomer told Reuters

 

The government paid TL67.8 trillion in total compensation for homes that suffered small or medium damage in last year's Aug. 17 and Nov. 12 quakes. It also held TL141.8 trillion worth of tenders for the construction of new 46,662 homes in quake-hit provinces. 

 

Meanwhile, a court sentenced a building contractor to four years in prison Friday, holding him responsible for the death of 20 people trapped in a building that collapsed in the devastating August 1999 quake. 

 

Survivors have filed hundreds of lawsuits against contractors over poorly built structures that collapsed in the 7.4 quake that hit northwest Turkey, killing at least 17,000 people. 

Contractor Kemal Uz, whose building crumbled in the town of Yalova, became the first contractor to be convicted of charges of negligence. 

 

The court in Yalova also sentenced Uz's project manager, Mehmet Nuray, to three years in prison, while another manager, Sukran Uzun, received a one-year prison sentence, the Anatolian news agency said. The sentences can be appealed. 

 

Relatives of the victims attending Friday's hearing protested the ruling, saying the prison sentences were too short. "Their rotten building became our grave," shouted Gulten Polat, whose son and daughter-in-law died in the building. "Who will pay for this?" 

Authorities have said that the poor quality of the buildings in the area was partly responsible for the high death toll. 

 

One contractor, who is standing trial for allegedly causing the death of hundreds of people, has admitted to improper practices, such as mixing salty sea sand with concrete. –(Albawaba-MEBG) 

 

 

 

 

 

© 2000 Mena Report (www.menareport.com)


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