Grave concern

Dying is big business in Poland and companies are cashing in on an unregulated industry.
By : Celia Barnes

    Between heaven and earth: The modern secular chapel in Antoninów, near Warsaw.

   Jan Szczuciński is the director of Warsaw’s largest, privately owned funeral company. He’s also a marked man who carries a gun for protection.

   Behind the soothing smiles and the understanding eyes of this country’s funeral operators, Szczuciński said there is an industry in turmoil, where competition is fierce, regulation non-existent, and corruption rife.

   The last time Szczuciński spoke out about it, four years ago, an arsonist twice attempted to torch the premises of his funeral business, Fosa. The office was robbed on several occasions and he received a death threat.

   “You don’t have much time left,” growled the voice at the other end of the phone, prompting Szczuciński to buy his gun and employ round-the-clock security.

   As for who was behind this terror campaign, Szczuciński shrugged his shoulders. “Competition?” he suggested. “The mafia?”

   Following the fall of communism in 1989, like most industries in Poland the funeral business underwent its own revolution. Where once there was just one state-run funeral operator, these days in Warsaw an estimated 120 private funeral parlors operate without any regulations.

   The style of funerals has also changed. Under communism, they were a spartan affair. The government paid for and organized the event, transporting the body to the service and the cemetery. Merchandise was almost non-existent except for a small selection of locally made coffins of unreliable quality.

   Today, customers have a wide choice, not only of operators, but also of all the associated paraphernalia that Westerners take for granted. Hundreds of coffins and urns are available, imported from as far away as Iran and Egypt, and are made of wood, plastic or metal with padded or lace interiors. The bereaved can hire a Mercedes, a Pontiac or a Kia for the service. The deceased can be touched up by a mortician or, for around an extra $175, embalmed.

   Many funeral directors have also adopted the uniform and manners of their Western counterparts – dark suits, somber faces and a moderated air of empathy. There are counselors for the bereaved and people to help organize the wake. Szczuciński is working on another new concept – Warsaw’s first pre-paid funeral plan.

   “The funeral industry has evolved like this all over the world,” said Szczuciński, who opened Fosa 12 years ago. “It’s only natural that it would do the same here, and will continue to do the same.” Today, Fosa has grown to handle 2,000 burials a year and now has 50 staff, 12 hearses and two embalmers (who studied in Paris at a cost of $15,000 each).

   The government still plays a role in the industry, providing a Social Insurance Administration (ZUS) payment of zł. 4,087.10 toward the cost of every funeral, but Szczuciński said it’s common for people to top this up with their own cash, spending on average zł. 6,000. The most expensive funeral Fosa’s handled so far cost zł. 32,000.

   “These people bought two grave plots at Bródno (catholic) cemetery,” he said. “They bought an American coffin for $4,700 and they had a wake for 200 people.”

   But companies like Fosa aren’t the only ones benefiting from this growth. According to Szczuciński and other industry members who spoke to the Business Journal, corruption is costing the industry dearly.

   Many in the industry allege that the main form of corruption is kickbacks to those doctors, emergency workers, ambulance drivers and police who refer business to funeral houses. The going rate, “for information about a dead person,” said Szczuciński, is up to zł. 1,400. He admitted Fosa has yet to succumb to the practice. But he added that ultimately the cost of this graft is passed on to the consumer in the form of inflated prices and service fees.

   “This corruption is very well developed,” Szczuciński said. “There is no law in Poland protecting funeral houses … And you can’t fight it. The doctors in Poland are not well paid, so this is how some of them earn their money.”

   Włodzimierz Adamczyk, director of Warsaw’s biggest funeral provider, the local government-run Miejskie Przedsiębiorstwo Usług Komunalnych (MPUK), calls the level of corruption a “pathology.” His business, which started as a financially independent entity from Warsaw’s City Council in 1996, has 11 offices in Warsaw, handles up to 4,000 burials a year, and earned a pretax income of zł. 14 million ($3.3 million) in 2000. It offers specialized items such as sarcophagi and a range of clothing for the deceased and the bereaved.

   In Adamczyk’s opinion, the company’s size puts it beyond the reach of corruption. But corruption is something he sees everywhere. He said that one private operator he spoke to relies on corrupt doctors to supply 50% of his business. “Ultimately it’s the state treasury that loses this (corruption) money and it’s a lot of money,” Adamczyk said. “I can’t really give you an estimate because private companies disclose very little information about how much they make and what money they spend on ‘buying’ funerals (from doctors).”

   The secretary of the Superior Medical Board Dr. Konstanty Radziwiłł, said he is aware of this problem. “I may comment on this with only one word: illegal,” he said. “It’s illegal. It’s against the (doctors’) code of ethics.”

   He takes the insouciant position by saying that the board has never received an official complaint, which is required before legal action can proceed. The best solution, he said, is improving doctors’ wages and the health care system.

   The monthly net wage of a doctor – most of whom work in the public sector – is zł. 1,000-zł. 2,000. Radziwiłł said this, combined with long waiting lists for surgery, has helped foster an environment ripe for corruption.

   “We’re not interested in establishing secret police to control corruption possibilities,” he said. “But I think this is not just a problem of the health care sector; it’s a problem of Poland. “There are many other sectors that are affected by corruption and it’s a problem of our (country’s) administration and political and bureaucratic life.”

   But the problem is systematic in some sections of the health industry, according to Wojciech Krawczyk, chairman of the board of the Polish Cremation Association and the Polish Association of Cemetery Administrators and Funeral Companies. He and a handful of colleagues established these associations in 1998 in an attempt to set some sort of standard in the industry.

   He said there is a “phenomenon” in this country, where some Polish hospitals have representative offices for funeral parlors on the premises. They also lease hospital morgues. He suspects that in some cases, they could be a front for the mafia, organized crime or money laundering operations. “The corruption basically occurs because these funeral parlors cooperate with the police and emergency services,” Krawczyk said. “And what happens is there is one company that has a monopoly within the hospital. And even if, as the bereaved, you want another company to handle the funeral, the company in the hospital will still try and get zł. 400 off you or your funeral company for allegedly washing the body.

   “It’s a business where the money is made on grief and on sadness and most of them are like vultures because they want to make money out of that.”

   Waldemar Gliński, from the Healthy Minstry’s press office, said that while the ministry is aware that corruption is occuring in hospitals, it believes the level is only marginal and ultimately the hospital directors and the doctors are responsible for keeping it in check.

   “Some weeks ago,” Gliński said, “the minister of health, Grzegorz Opala, spoke with the media and said … it’s important to appeal not only to doctors and managers of health, but also to nurses, to do their jobs well, without corruption; without taking bribes.”

   For conditions to improve, Krawczyk said the only solution is self-regulation and legislation. “In Warsaw, there aren’t many (funeral) companies that are not involved in this corruption,” he said. “But it’s a very young business – it’s only around 10 years old, so hopefully with time it will become regulated.”

   As it stands, anyone can set up a funeral business. All that’s required is a certificate from the government sanitary authority, Sanepid.

   “The problem is the lack of law. The current law from 1959 (on Cemeteries and Burial of the Deceased) has no definition of a funeral parlor or a funeral parlor employee. There’s no law pertaining to cremation as such, so this is what our association is fighting for.”

   In 1995 Krawczyk and Szczuciński prepared a list of recommendations for the Sejm. Nothing has come of it.

   “Basically it has been sent from one party to another and no one wants to talk about it because no MP is going to base his career on a new burial law,” Krawczyk said. “Nobody has any interest in it.”

   Funeral pyres

   Until 1984, the church strongly objected to using cremation on religious grounds – for Catholics, being cremated is to lose one’s soul.

   But in 1995, the government opened Poland’s first public, Swedish-built crematorium in Warsaw’s northern communal cemetery.

   Since then, the number of Varsovians choosing to cremate their loved ones has grown annually by 25-30%. As a national total it still only represents about 1.5% of all burials. By comparison, at 74%, the U.K. has one of the highest cremation rates in Europe.

   According to Wojciech Krawczyk, chairman of the board of the Polish Cremation Association, the industry will continue to grow.

   “In the next 10 years, we’re expecting to achieve the same cremation levels as France and Spain, which is about 12%,” he said.

   Public crematoria have subsequently opened in Poznań and Wrocław and plans are underway for others in Gdańsk, ŁodŸ, Szczecin and Częstochowa.

   “There are at least 10 investors at the moment who are interested in pursuing it as a business.”

   Investments are typically zł. 4 million-zł. 5 million ($952,000-$1.1 million), with one furnace accounting for some zł. 1 million ($238,000). In 1997, Poland’s first privately operated crematorium opened in Ruda Œlšska.

   “This is the future,” said Kazimierz Opoka, president of Ruda Œlšska’s private Park Pamięci crematorium.

   “We’re actually planning to build another crematorium in the area.”

   Expansion to Poland’s eastern neighbors is not out of the question either.

   The crematorium handles about 100 burials a month, charging zł. 600 for the service, and Opoka said business is growing slowly despite Poland’s historical reticence for cremation, which he said stems, in part, from its use in World War II death camps.

   Cost is an important factor. A basic gravesite in one of Warsaw’s three communal cemeteries can cost zł. 600- zł. 720. A site for an urn begins at zł. 300. In one of Warsaw’s 442 catholic cemeteries – most of which are closed to new burials – the price is at the priest’s discretion. A plot at Warsaw’s Pawšzki cemetery is rumored to cost about zł. 25,000.

   Also, as is common throughout Europe, buying a basic plot or urn space means you get it for only 20 years. After that time, if the family doesn’t renew the space, the remains can be transferred to an ossuary, and the plot resold.

   On the southern edge of the capital, at Warsaw’s newest architect-designed communal cemetery, there is a special field for people who prefer to scatter the ashes of the deceased, rather than bury them.

   This ultra-modern cemetery, which cost Warsaw City Council about zł. 40 million ($9.5 million) to build, opened in October 1999. Out of the 220 burials they have performed so far, one-third have been cremations. The government has lowered burial prices here by 10% to encourage more business.

   “At some point, I don’t know when, I think Warsaw could privatize its cemeteries,” said Krzysztof Pełka, director of the southern communal cemetery. “… (but) For the next 20 years, it’s not going to be profitable because you still have to invest so much in it.”