Contrary to many predictions, the informal sector is not diminishing. It is increasing everywhere. Globalization and the associated search for lower labour costs is one significant factor in this. Privatization and the contracting out of services and activities are others. Contrary to some views the informal sector is, by and large, neither innovative nor full of opportunity. Working conditions in the sector are oppressive and dangerous. Thousands of children, often as young as 4 years old, work in this sector; most incomes are well below the poverty line; workers usually do not have access to state-provided social protection, training, and social services; exploitation and infringement of workers' rights are common. The vast majority of people do not work in the informal sector by choice and it is certainly not for them a stepping stone to improvement. Rather it represents a means of survival.

There is a high proportion of women workers in the sector. In general, the working conditions for men and women are different, for example in terms of hours and type of work and also remuneration. Due to economic, social and cultural factors women are particularly vulnerable among the working poor of the sector. The informal sector is heterogenous in terms of activities and occupations, and its features vary considerably from region to region and from country to country. Participants discussed at length the difficulties in precisely defining the informal sector. They agreed on the necessity to avoid using this concept as a catch-all term. Moreover, it was agreed that the informal sector should refer to informal work or informal employment, and not only to informal enterprises.

Three main segments were identified in the informal sector workforce. The first segment corresponds to the owners or employers of micro-enterprises including farmers who may employ a few workers and/or apprentices. They do not generally constitute a target group for trade union organizing activities but may benefit from trade union lobbying of governments and international organizations. The second segment comprises own-account workers, which is comprised of the nominally self-employed and street vendors and small farmers. It is the largest and most visible segment in the informal sector. Despite being nominally self-employed many workers in this segment are economically dependent on a single enterprise or a middleman for their survival. The third segment encompasses employees engaged in full-time or casual employment. It includes wage labourers working in micro-enterprises on a regular, casual or contract basis, unpaid workers, including family members and apprentices, homeworkers and paid domestic workers. The workforce in this segment is often physically hidden and therefore more difficult to locate, contact and organize.

Participants recognized that this classification did not fully convey the complexity of the sector but it provided a basis for the further development of policies. It was decided that trade union recruitment efforts should focus on both the second and third segments mentioned above.

1. Recommendations for trade unions

The substantial shift of the workforce into the informal sector raises significant questions for trade unions and represents for them one of the most crucial challenges of the present era. The major focus of the Symposium was on trade union strategies to organize these workers and better represent their interests.

Participants stressed that women and young people constitute two important target groups in the informal sector because they constitute the bulk of the labour force. It is clear that for unions to be credible and attractive to both women and young people in the informal sector, changes are required in union priorities and in particular instances in internal structures.

Unions have recorded some notable successes in organizing the informal sector in countries such as India, Ghana, South Africa, Argentina and Colombia. However, given the rapid and ongoing expansion of informal activities, the level of organization remains inadequate. In the past unions have experienced difficulty in organizing informal sector workers because they are often difficult to contact and because their needs are usually different from workers in the formal sector. This explains why up until recently in most countries, trade union activities and policies regarding informal workers have been fragmented. Because of these factors the level of success for unions from their past efforts in trying to organizing informal sector workers has often been disappointing. At a time when financial and human resources are very scarce, unions sometimes find it difficult to devote more attention to the informal sector.

Nevertheless, participants felt that the trade union movement had to adopt a longer term perspective and recognize that organizing the informal sector is critical if the trade union movement is to have a wide membership base and retain the capacity to protect workers. A century ago the trade union movement was created through organizing workers who confronted similar constraints and problems to those prevailing in the informal sector today. History would therefore suggest that workers in the informal activities can be successfully organized.

However to successfully organize the unorganized today, unions must do more to accommodate the needs of informal sector workers through specially tailored activities. At the heart of the struggle to organize is the ability of trade unions to deliver tangible benefits and increased protection to workers in informal activities. Participants recommended that national trade union centres and affiliated organizations urgently review their own priorities, internal structures and resource allocation to determine whether sufficient attention is being devoted to the informal sector.

The Symposium adopted the following specific recommendations. Trade unions should:

• Review and where necessary revise internal regulations and statutes to remove any limitations on their ability to admit informal sector workers as members.
• Establish and/or strengthen special structures within their existing centres with responsibility for mobilizing and organizing informal sector workers.
• Promote gender equality in the workplace and in union structures. This should include establishing or expanding specialist units devoted to gender issues within trade union centres and mainstreaming these activities.
• Ensure greater gender equality in trade union leadership positions.
• Ensure that structures are representative of young people and take youth issues seriously and that young people are part of union decision-making and are trained in leadership.
• Introduce measures that will assist women who wish to attend trade union meetings and activities. This could include: scheduling meetings at times that are most convenient for women who have to combine trade union activities with family responsibilities; and making available childcare facilities and meals for children of women attending union meetings.
• Implement special projects to promote trade unions and their objectives with young people. This might include using music, drama, youth magazines, posters and sporting events to attract the attention of young people and to project a contemporary image of trade unions.
• Ensure that women are involved to recruit and organize women in the informal sector, and that young people are similarly involved.
• Consider developing a "community-based" approach to organizing in conjunction with other proven "shop-floor" organizing methods. This dual organizing strategy might be more effective in reaching workers in informal activities, particularly when access to the workplace is denied or the workplace is unknown, as is often the case with homeworkers or domestic workers.
• More fully utilize the potential for building "bridges" between the trade union movement and informal sector workers. For example, links with previous union members who have been forced out of the formal sector and connections between union members who are employed in the formal sector but have relatives working in the informal sector should be used to publicize union policies and activities. The union "experience" of members and activists who have been pushed into the informal sector should be capitalized upon.
• Make access to information about the location of workers and details about the "contracting-out" process a top priority. Trade unions should establish mechanisms to systematically collect information that tracks the contracting-out process and the flow of work down the production chain from the point of sale of the final product or service down to the most basic unit of production. This information can be used by unions trying to identify potential members and also for media campaigns about the exploitation of contract workers and homeworkers. The State has a significant role to play in facilitating the collection of such information (see below for details).
• Promote the "organizing model" of trade union organization in order to empower workers to find solutions to their problems. This approach devotes particular attention to empowering rank-and-file activists to do the work of organizing their co-workers and it emphasizes a distinct methodology for achieving trade union objectives.
• Implement comprehensive education programmes with the objective of developing real leadership potential among informal sector workers. A holistic education approach, which simultaneously expands normal union issues like collective bargaining to the informal sector and in addition address the special needs of informal sector workers, seems to work best.
• Consider providing or extending the range of special services that are available to workers in informal activities as a recruitment strategy. This is one way to immediately address their economic and social needs such as health, education, savings, loans, etc.
• Consider establishing or expanding the links with cooperative economic activities. This approach has proved successful in both empowering these workers, through the provision of support services, such as access to credit, technology and raising awareness among them about the benefits of unionization.
• Develop a comprehensive communication strategy. One way increasingly used by trade unions to build solidarity and public support is through awareness-raising campaigns and rallies. Radio and television programmes or announcements may be more effective than print media to transmit information to informal sector workers. Attention should be devoted to developing ongoing relationships with reporters and media groups who will objectively reflect trade union views in their reports.
• Build coalitions with appropriate informal sector unions and organizations which already exist and who share the basic principles and objectives of the trade union movement. These groups provide opportunities for organizational partnerships or integration with existing trade union centres.
• Retain their identity as organizations of workers acting in defence and promotion of their interests, and should on this basis build more general alliances with NGOs, religious groups and other civil society groups as one component of the overall campaign to organize and improve the conditions for informal sector workers. Issue-based alliances are the most common and should be carefully considered at the national level. Event-based alliances are also common, for instance on May Day. The objective should be to establish ongoing alliances between unions and community groups.
• Expand cross-border cooperation between union centres. International trade union cooperation aimed at implementing better conditions in the informal sector is concentrated in four areas: the promotion of a link between labour standards and trade matters; the negotiation and implementation of codes of conduct; the development and implementation of framework agreements between international trade union organizations and multinational companies; and social labelling schemes. International trade union centres should devote more resources to these activities. The Symposium set an objective to have framework agreements, underpinned by enforceable legal obligations, that cover all segments of the economy and include viable mechanisms to enforce all significant ILO Conventions at all levels in the chain of production.
• Mandate their international centres to lead and coordinate efforts to attract external support for organizing activities in the informal sector. It is important that trade unions retain control over the objectives and implementation process of projects that are implemented with external funds.

2. Recommendations for governments and international organizations

Participants criticized governments and international financial organizations (IFIs) for not focusing sufficient attention and resources on the transformation of the informal sector activities into more highly productive, organized and socially responsible enterprises. It is essential that informal sector activities are upgraded into enterprises that: respect trade union rights and provide protection to their workers; conform with all legal and tax requirements; utilize appropriate technology and environmentally sustainable production processes; and, make a more substantial contribution to national income. In short, to mainstream and increasingly formalize the informal sector.

In the past many governments and the IFIs have paid lip-service to this transformation process but their policies and programmes have had the opposite effect. For example, anti-trade union policies and infringement of worker rights by governments remain major factors explaining why trade unions have encountered difficulties in organizing informal sector workers. Many governments, often acting on the advice of the IFIs, have claimed that they were promoting the employment and income-generation potential of the informal sector by failing to implement their own labour legislation in the sector and by infringing trade union rights. In many cases an excessively optimistic perspective on the informal sector has led the IFIs to recommend increased labour market flexibility and consequently reduced labour protection and social security provisions in the formal sector rather than an upgrading of standards in the informal sector.

More specific recommendations for governments, IFIs and the ILO are outlined below.

(a) Labour standards, labour legislation and inspection

There is overwhelming evidence that basic rights, which are reflected in the core international labour standards, are often flagrantly abused in the informal sector.

• The ILO InFocus programme to promote the Declaration on Fundamental Principles and Rights at Work should include activities specifically designed to remove obstacles to trade union organization in the informal sector and the implementation of the other core Conventions in this sector. This Declaration states that all governments have an obligation to respect, promote and realize the core international labour standards. The Declaration makes no distinction whatsoever between the formal and informal economies.
• The IMF, World Bank and WTO should fully support and create conditions to realize, through their policies and programmes, the implementation of ILO core Conventions.
• The ILO report Decent work recognized that all workers have rights regardless of whether they are in the formal or informal sector. Therefore it is unacceptable to have a dual or differentiated system of labour legislation. Rather there should be a single level of labour protection that applies to all workers regardless of whether they work in the formal or informal sector. The ILO should therefore promote reform of national labour legislation to ensure that existing laws and regulations apply in an effective manner to all "workers" rather than just "employees" with a contract of employment. The ILO should recognize the vulnerability of many informal sector workers by promoting additional protective safeguards for these workers. In particular, it is essential that all workers possess the enforceable legal right to secure their entitlements directly from those parties in the production chain who have the greatest financial ability to provide them (whether or not such parties deal directly with these workers).
• Implementation of the ILO Rural Workers' Organisations Convention, 1975 (No. 141), and the Home Work Convention, 1996 (No. 177), would help extend a minimum level of labour protection to the informal sector. The ILO should vigorously promote ratification and implementation of these Conventions and explain to governments and the social partners that the protection provided through these Conventions is very basic but highly desirable.
• The ILO should do more to extend protection to dependent contractor workers. These workers are often victims of exploitation and require greater protection. It was regrettable that the ILO failed to adopt a Convention on contract labour at the 1998 International Labour Conference. The ILO should ensure that the research now being carried out on contract labour and that the tripartite discussions scheduled on this topic for the year 2000 lead to the adoption of new instruments to protect contract workers.
• The ILO should focus on ways to implement the Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy (1977) throughout the supply chain of multinational enterprises, including in the informal sector.
• Governments should ensure that trade unions facilitate the organization of all workers in the formal and informal sectors.
• In order to facilitate access to information about "production chains" and the "contracting-out" process governments should pass legislation requiring all enterprises to collect and make publicly available information about activities that are subcontracted. This information should be collected for all elements in the production chain and should include situations where the work is subcontracted in the home country and also situations where the work is ultimately performed in other countries. Information collected should include details about the quantity of work given out (and the price to be paid) at each stage in the production chain, as well as the location of enterprises or individual workers performing contract work.
• The system of labour inspection is understaffed and ill-equipped in most countries. A major priority for governments should be an increase in the resources and trained staff available for these functions. Consideration might also be given to supplementing government labour inspection systems through the establishment of legal rights of inspection for trade unions and/or joint trade union-management inspection systems.
• Participants endorsed the recommendations of an ILO Meeting of Experts on Labour Inspection and Child Labour in September 1999.
• Governments should strengthen labour ministries and ensure that they have the resources and expertise to adequately reflect social and labour considerations in the public policy formulation process. The ILO should maintain and upgrade the technical assistance it is providing in the fields of labour inspection and labour administration.

(b) Economic policies

After two decades of failure with traditional structural adjustment policies, some governments and some people within the IFIs are becoming more interested in the views of trade unions. This provides an opportunity to elaborate policy recommendations that are directly relevant to people in the informal sector. Consequently the following recommendations were adopted in regard to economic policy.

• Governments and the IFIs should act immediately to implement policies that would: mitigate the adverse implications of adjustment programmes; stimulate aggregate demand; and provide comprehensive international debt relief for the poorest nations. All these policies will benefit the informal sector because a major economic problem in the sector is insufficient demand for their products.
• The IFIs should ensure that the polices they recommend and the conditions they impose on governments result in macroeconomic, industry and labour market policies that will facilitate the transformation of informal sector activities into more productive, organized and socially responsible enterprises.
• Government economic policy should promote the transformation of the informal sector through: establishing a link between tax and financial incentives provided to SMEs and the implementation of labour standards and trade union rights in micro- and small enterprises; and by ensuring that government procurement policies foster the implementation of labour standards.
• The organization of informal sector workers is an important public good for every society. Accordingly, all appropriate instruments of public policy should be used to facilitate such organization, including the use of subsidies, provision of infrastructure, etc.
• The IFIs should urgently provide increased financial support for infrastructure development in their programmes. Informal sector workers often do not have access to land and are often forced to squat on public and private property or simply operate on the pavement or street corners. This in turn means that they do not have normal access to basic services such as water and electricity. Poor infrastructure (roads, drainage and communication facilities) undermines their productivity and ability to expand and succeed.
• Governments and the IFIs should substantially increase the resources available to provide adequate housing for informal sector workers.
• Governments should incorporate within urban plans and development projects space and facilities for street vendors.
• The ILO has an important role to play in labour-intensive infrastructure development. One of the most important aspects of this programme is that it demonstrates that the ILO can combine employment promotion activities with enforcement of labour standards. Resources allocated by the ILO to work in this area should be substantially increased.
• Policies to promote human capital development through better education and training are of vital importance to transform the informal sector. Consequently, trade union campaigns to promote universal access to education and training are particularly relevant to people in the informal sector and should be maintained. Government and private vocational training policies should be adjusted to make them more relevant to the specific needs of informal sector workers who usually have little schooling. The cost of admission to formal training institutions should be reduced and special courses designed for illiterate or semi-literate people.
• The ILO InFocus programme on investing in skills, knowledge and employability should promote policies that reflect the specific needs of workers in informal activities and ensure that trade unions are integrated in the planning and implementation of activities carried out through this programme.
• Micro-entrepreneurs and own-account workers face difficulties in gaining access to institutional credit. This problem is particularly acute for women. Many international institutions and NGOs have established programmes to extend small loans to people in this sector. The international trade union movement fully supports these initiatives but recommends adjustments to programmes to ensure that the beneficiaries include the poorest groups.
• ILO programmes and activities related to microcredit should be adjusted to incorporate the effective and consistent promotion of ILO Conventions. The ILO should more fully integrate appropriate trade union representatives in the management and oversight of these ILO projects.
• ILO activities concerning the promotion of small and medium-sized enterprises (SMEs) should be closely monitored to ensure that increased emphasis is placed on improving working conditions and the implementation of labour standards in the informal sector.
• Training on local labour laws should be automatically included in all ILO activities related to SME promotion. The ILO staff backstopping projects on SMEs must ensure that national staff are given information on national labour laws and international labour standards and on the ILO's policy of promoting international labour standards through technical cooperation activities.
• Governments should review and revise regulations concerning the establishment and operation of SMEs. The informal sector tends not to comply with regulation and licensing because it is often over complicated, ambiguous and corruptly administered. Better compliance might come from more transparent and clear regulations.

(c) Social protection

Participants were concerned about the absence of social protection in the informal sector and recommended that the extension of social protection to informal sector workers should be a major objective for the ILO. The following recommendations are relevant to this objective.

• The ILO should continue to promote equitable and universal social protection systems because they are necessary to diminish income inequalities and provide protection for everyone in the society. ILO policy advice should focus on explaining to governments and the social partners how to provide protection to those who need it most, including workers in the informal sector, at a cost that can be borne by the workers themselves, their employers (if any) and the State.
• In the absence of universal social protection schemes, local level mutual insurance schemes have been created in many developing countries. These schemes provide valuable protection to many informal sector workers. However they do not offer the same scope for solidarity as national, compulsory schemes which cover both low-income and high-income earners. Also they could have the potential to undermine universal social protection schemes because they do not normally involve employer contributions. Consequently the ILO should actively promote trade union involvement in the design and implementation of these local level mutual insurance schemes to guard against these dangers and help ensure they are utilized as a first step towards compulsory social protection.
• The ILO should encourage national debates on the future of social security where the issues to be addressed should include:

-- the best ways to achieve universal social protection and what forms and level of basic protection everyone, including informal sector workers, should enjoy;

-- sources for financing social protection and how much society as a whole can afford to spend on social protection; and

-- mechanisms to administer social protection schemes in an equitable manner.

• Informal sector activities are plagued by occupational accidents and health problems. Government expenditure on information campaigns about the economic costs of such problems and ways to improve the health and safety record in the informal sector should be increased. Trade unions should be involved in the planning and management of occupational health and safety organizations and activities. The ILO has an impressive programme of technical assistance in this field which should be expanded.

3. Recommendations for follow-up activities by the Bureau for Workers' Activities (ACTRAV)

ACTRAV should:

• Receive additional regular budget resources to strengthen activities on the informal sector and establish a focal point dedicated to the informal sector.
• Design and implement follow-up activities, including seminars and projects, at the regional and national level. Regional and national level seminars are necessary to enhance awareness about the need for trade unions to extend organizing activities and protection to informal sector workers.
• Conduct research on organizing strategies for informal sector workers, and develop a data bank of best practice in this field. This research and information should be used to produce operational guidelines and workers' education tools for trade union intervention in the sector.
• Undertake pilot programmes to promote the transfer of expertise and know-how among selected trade unions on techniques and practices to organize in the informal sector.
• Seek donor support for pilot projects designed to assist trade unions establish structures and activities that focus on organizing informal sector workers and incorporating their needs into the priorities and policies of unions at the national and sectoral level.
• Undertake research and implement activities that will assist the national and international trade union movement with the implementation of codes of conduct, framework agreements, and labelling schemes which are designed to extend appropriate labour standards to the informal sector. This should include facilitating exchanges of information between union centres and research concerning "chains of production" as well as the social and economic implications of subcontracting and atypical forms of work.
• Continue to assist the international trade union movement to promote ratification and implementation of ILO Conventions on home work and rural workers' organizations. ACTRAV should also design and implement trade union educational material concerning new ILO standards that would assist informal sector workers, including a Convention on contract labour.

ACTRAV should establish and expand cooperation with other ILO technical programmes at headquarters and in the field structures in order to:

• Assist with the full and rapid implementation of these conclusions.
• Provide support services (training, consultancy, information exchanges) on small enterprises development to trade unions.
• Promote additional joint activities between cooperatives and trade unions.
• Design and implement awareness-raising campaigns among trade unions about the potential benefits of building alliances with representative groups of civil society.
• Document models of best practice to promote and implement innovative social protection schemes (childcare, education, health insurance, health and safety), and provide support for implementation.
• Provide technical advice and support in the design and implementation of trade union training programmes that meet the skill needs of informal sector workers.

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Updated by TH. Approved by MSV. Last updated: 1 November 1999