The Decent Work Agenda and Sustainable Enterprises

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1 Workshop on Sustainable Enterprises and Social Responsibility in Business Education A Dialogue with Business Schools The Decent Work Agenda and Sustainable Enterprises José Manuel Salazar-Xirinachs Executive Director, Employment Sector International Labour Organisation Geneva, Switzerland 23 February-2009

2 Objectives of this workshop Raise awareness of ILO s work on promoting sustainable enterprises in the context of our Decent Work Agenda, Share information on how business schools are incorporating concepts of sustainable enterprises and social responsibility into your teaching and research agendas Identify ways in which ILO and business schools can collaborate in this area, for instance: Development of teaching materials Organization of knowledge-sharing platforms and events Participation of ILO in academic conferences and increased participation of academics in ILO events Formation of consultative network between the ILO and business schools Joint research activities Others, as raised during discussion

3 Objectives of this presentation Clarify why we want to talk to you and work with you Introduce the ILO to you and begin to establish a common language Persuade you that it is important for you to talk to us and that there are important opportunities for win-win colaboration

4 Content I. The ILO Mission: Social Justice, Fair Globalization and the Decent Work Agenda II. III. Business Schools: How to you deal with the role of the entrepreneur in society? How does this relate to Social Justice, Fair Globalization and Decent Work? The ILO approach to the role of the entrepreneur in society and the promotion of sustainable enterprises.

5 I. The ILO Mission Promoting Social Justice and Fair Globalization through Decent Work

6 Constitutional Mandates and Mission 1919: Promote Social Justice (Preamble of the 1919 Constitution) «Whereas conditions of labour exist involving such injustice, hardship and privation to large numbers of people as to produce unrest so great that the peace and harmony of the world are imperilled; and an improvement of those conditions is urgently required» «as for example: by the regulations of the hours of work, the prevention of unemployment, the provision of an adequate living wage, the protection of the worker against sickness, disease and injury, the protection of children, young persons and women, provision for old age, recognition of the principle of freedom of association, the organization of vocational and tecnical education.» 1944 Declaration concerning the aims and purposes of the ILO (Philadelphia) 1944 Declaration concerning the aims and purposes of the ILO (Philadelphia) Labour is not a commodity Poverty anywhere constitutes a dange to prosperity everywhere Lasting peace can be established only if it is based on social justice All human beings have the right to pursue both their material well-being and their spiritual development in conditions of freedom and dignity, of economic security and equal opportunity It is the responsibility of the ILO to examine and consider all international economic and financial policies and measures in the light of this fundamental objective It is a solemn obligation of the ILO to further programmes among the nations of the world which will achieve: Full employment and raising standards of living Facilities for training Policies in regard to wages and earnings and other conditions of work The effective recognition of the right to collective bargaining, the cooperation of management and labour in the continuous improvement of productivity The extension of social security

7 Constitutional mandates and mission The 1998 Declaration on Fundamental Principles and Rights at Work Freedom of association and the effective recognition of the right to collective bargaining Elimination of all forms of forced or compulsory labour Effective abolition of child labour Elimination of discrimination in respect of employment and occupation Decent work 1999 Definition: Opportunities for women and men to obtain productive work in conditions of freedom, equity, security and human dignity.

8 Decent Work has gained support and has been adopten by the international community. At the 2005 United Nations World Summit, heads of state and government declared, We strongly support a fair globalization and resolve to make the goals of full and productive employment and Decent Work for all, including for young people, a central objective of our national and international macroeconomic policies as well as poverty reduction strategies. In 2006 and again in 2007, the ECOSOC Ministerial Declaration called for the mainstreaming of Decent Work throughout the UN system.

9 ILO Decent Work Agenda: An operational framework to promote social justice and fair globalization Social Protection Links Social Protection- Economic and Social Policies Expansion of Social Security Improved conditions of work and Safer working environments Regulating Labour Migration Employment Inclusive-Job Rich Growth Policies to influence the demand-side Skills and employability Enterprise development Labour Market Institutions and Policies Informal Economy Global Initiatives Strengthening the response to HIV/AIDS Target groups: youth, women, vulnerable through the workplace Decent Work Country Programmes (DWCPs) Integrated approach to promoting good governance Standards Policy National Policy Frameworks/ DWCPs Strengthening Labour administration Fundamental principles and rights at work Strengthening employers organizations Strengthening workers organizations Social Dialogue Elimination of Child Labour Improved application of Int l Labour Standards Improved ratification and supervision of Int l Labour Conventions Standards and rights Regional Agendas/ Platforms

10 2008 Declaration on Social Justice for Fair Globalization Another landmark in the work of the ILO Expresses the contemporary vision of the ILO mandate for the 21st Century particularly relevant in the present financial, economic and jobs crisis - a crisis of globalization? Raises the concept of Decent Work to constitutional level: the commitments and efforts of Members and the Organization to implement the ILO s constitutional mandate, including through international labour standards, and to place full and productive employment and decent work at the centre of economic and social policies, should be based on the four equally important strategic objectives of the ILO, through which the Decent Work Agenda is expressed. The four strategic objectives of the ILO are inseparable, interrelated and mutually supportive. Provides a blueprint to make the ILO more effective in responding to Members needs and realities.

11 ILO Means of action Tripartism Standard Setting Promotion and supervision of compliance with standards Research Diagnostic tools to identify policy priorities Policy advise Capacity building Monitor trends Evaluation of policy impacts Integrated approaches Technical cooperation

12 II. Business Schools How to you deal with the role of the entrepreneur in society? How does this relate to Social Justice, Fair Globalization and Decent Work?

13 What is the proper role of business? The CEO & business school views High Performance Strong, sustained growth Competitiveness Superior products and services Durable benefits to Shareholders Other stakeholders High Integrity Adherence to the spirit and the letter of the formal rules (financial, legal, social) Voluntary adoption of ethical and other global standards (Codes of conduct) Other stakeholders Management and employee commitment to core values. (What values?) High performance put pressures on employees to increase income, cash flow, stock price. These pressures can cause corruption when unconstrained by high integrity. Laws, regulations, stakeholder expectations, media scrutiny can make major integrity lapses not just damaging but devastating, with CEOs fired in disgrace. Combining HP with HI also has positive benefits: trust, reputation Profit People Planet

14 Debates you probably teach in your courses The Corporate Governance Debate The Pay-for-performance debate The maximize shareholder value vs CSR debate Good Corporate Citizenship synthesis The business ethics debate The management of supply chains debate

15 III. A 21st Century vision from the ILO on the promotion of enterprises and development The Promotion of Sustainable Enterprises

16 Sustainable Enterprises as a source of Decent Work Recognizing that the private sector is the principal source of growth, wealth creation, and productive jobs, the ILO constituents decided to have the following subject for the general discussion at the International Labour Conference (2007): Promotion of Sustainable Enterprises

17 ILO Approach to the Promotion of Sustainable Enterprises External conditions: Enabling environment Political: Peace and political stability, Respect for universal human rights, Good governance, Social dialogue Economic: Sound and stable macroeconomic policy, Trade and economic integration, Enabling legal environment, Rule of law and secure property rights, Fair competition, Access to financial services, Physical infrastructure, Information and Communication Technologies Internal (Enterprise Level) Conditions and principles Social Dialogue and Good Industrial Relations Human resource development Good conditions of work Fair benefits for workers in terms of productivity, wages and shared benefits Use of Corporate Social Responsibility Good Corporate Governance Social: Social justice & social inclusion, Education, training and lifelong learning, Entrepreneurial culture, Adequate social protection Environmental: Responsible stewardship of the environment Sustainable Development

18 Enterprise-level principles for responsibility 1) Social Dialogue and Good Industrial Relations 2) Human resource development 3) Good conditions of work 4) Fair benefits for workers in terms of productivity, wages and shared benefits 5) Use of Corporate Social Responsibility 6) Good Corporate Governance

19 What do ILO constituents mean by a Sustainable Enterprise? At the enterprise level, sustainability means: operating a business so as to grow and earn profit, while recognizing the economic and social aspirations of people inside and outside the organization Long-term viability implies that the management of enterprises should be based on the three pillars of sustainability: economic, social and environmental.

20 Enterprise Development Programme Key objectives: 1. Enhance job creation potential of enterprises 2. Improve the quality of the jobs Four major levels: National: Policies and regulation for an enabling business environment Sectoral: Methodologies for upgrading value chains and clusters Local, regional: Methods and tools for local development Enterprise: Promoting productive and decent work place practices Target groups: MSMEs, MNEs, COOPs, IE units

21 ILO approach and tools Business Environment (BE) Advice and training on why and how to reform the BE Support for mapping and assessing the BE Strengthen small business associations to identify, prioritize and influence areas for reform Facilitate dialogue with government on these issues Some key concerns: Ensure that reforms support formalization of enterprises Create a level playing field for cooperative enterprises Reduce regulatory barriers to women s entrepreneurship Balance the need to reduce regulatory burden on MSEs with protection of workers Promote enterprise culture and entrepreneurship in education and training systems

22 Labour standards and high performance Enterprises that achieved positive results usually applied a mix of workplace practices in the fields of: employee involvement compensation working time and work-family balance policies training and development employee well-being programmes equity and non-discrimination occupational safety and health job security International Labour standards provide a foundation for developing these practices but they need to be embedded in the management practices within the enterprise. Thus we increasingly see reference to ILS in codes of practice and in company competitive strategies.

23 Multinational Enterprises (MNEs) ILO approach and tools, including CSR Main instrument: Tripartite Declaration of Principles on MNEs and Social Policy 1977), framework for contribution of MNEs to: General economic and social policies Employment Training Conditions of work Industrial relations Main areas of work: Promote the Declaration Inform of good practice: cases and surveys on Declaration follow-up Research: Key sectors, monitoring and reporting systems Good practices on CSR

24 To Conclude The ILC conclusions on the promotion of sustainable enterprises are forward looking, drawing on the latest thinking on sustainable development, entrepreneurship promotion and good corporate citizenship. They provide a powerful 21 st century vision from the ILO on enterprise and development. A key challenge for you as business educators is how to prepare your students to be responsible future managers and entrepreneurs. Through this workshop, the ILO wants to develop a common vision with you on how we can work with your to meet this challenge and identify opportunities for win-win colaboration

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