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Regional Seminar for Labour-Based Practitioners

"New challenges for employment-intensive investments"

1 Introduction

2 Topics of interest and concern

2.1 Introduction

2.2 Money or Politics: what drives local level investment planning to success?

2.3 Can Employment-Intensive investments really be considered as part of mainstream economic development?

2.4 Who influences technology choice and how?

2.5 How 'contractor-like' are small-scale contractors? Are they truly independent and can they independently access markets?

2.6 Decent Work: What should be included in codes of good practice and other regulatory mechanisms?

3 In conclusion

1 Introduction

This paper has been put together by the ILO/ASIST-Africa team. It is not an overview of the ASIST Programme and the services it offers within the Region; rather it looks at particular issues of concern and interest not only to ASIST, but we trust also to others involved in optimising the use of local resources in rural and urban settings. Having said that, a very brief description of the programme will help to set the context of the paper, and act as an introduction to those unfamiliar with the ASIST Programme and the ILO's involvement in this field.

The ILO's commitment to labour-based technology (LBT) results from a recognition that the widespread use of the technology, with its reliance on local resources, contributes positively to employment creation and poverty alleviation within many countries in the region. The ILO has been advocating employment-intensive growth strategies for a long time, the objectives being both to better link economic development with employment generation, and to contribute to poverty reduction through employment-based investments.

ASIST

ASIST (Advisory Support, Information Services and Training) was established in 1990 as a technical backstopping service in response to an increasing demand from countries developing labour-based technology in Eastern and Southern Africa. It operates under the guidance of the Employment-Intensive Investment Branch of the ILO. Its main objective is to support the construction and maintenance of rural and urban infrastructure works in Sub-Saharan Africa, using labour-based methods, with the ultimate aim of promoting employment creation and income generation, with fair working conditions. An additional component deals with accessibility and rural employment to enhance the planning for and impact of rural infrastructure. ASIST is therefore able to provide complementary services in terms of policy and planning advice, technical advice, and monitoring of both urban and rural labour-based programmes. The information service, which has a global coverage, includes publications, videos, and promotional information on labour-based technology. The training component is implemented through courses conducted at the Kisii Training Centre in Kenya and through support to various training institutions and universities in Africa who have included LBT in their curriculum. Building on the African experience, the ASIST programme has expanded to include Asia in 1998, and the Asia team was set up in Bangkok. Presently, work is beginning on a similar expansion to Latin America.

The issues

To return to the main theme of this paper, we should like to highlight some issues for debate and dialogue. We anticipate that the issues raised here will be complemented by the other papers to be presented later in the seminar, all of which we hope will lead to fruitful discussions in the various sessions.

So what are the areas that are attracting our attention at present and what are we catching a glimpse of over the horizon? What should we be preparing for? We have started from the position of current constraints and initiatives, but we have also tried in a modest way to predict future challenges. The following sections of this paper deal with specific individual topics, all of which we see as important for the future expansion of employment-intensive investment.

2 Topics of interest and concern

2.1 Introduction

The world economy has gone through radical changes since the 1980s with the introduction of structural adjustment. This process has emphasised economic liberalisation through the deregulation of prices and foreign capital controls decreasing state budget deficits through cuts in subsidies, devaluation of national currencies and privatisation of inefficient public enterprises. The primary aim of these polices and instruments has been to bring about improvements in the market for production and services by removing trade barriers and rigidities. However, many developing countries have been ill equipped to take part in and benefit from the increased international trade. The consequences have been reflected in an increase in unemployment, vicious cycle of poverty, social exclusion, social tension over scarce resources and insecurity in many developing countries.

In response to global economic trends and changes, the decentralisation policies (among other measures) in many developing countries have been pursued and accelerated. This has led to an increased vested responsibility in the regional and local level institutions for economic development and employment creation--though not necessarily with the means to carry these out. Subsequently, the need for building local capacity for planning, implementation and monitoring is critical if decentralisation is to effectively enable a more rational allocation of scarce resources according to real priorities.

2.2 Money or Politics: what drives local level investment planning to success?

Relevant to serious problems of unemployment and poverty in developing countries, and the addressing of some of the above mentioned challenges, current initiatives contribute to a) strengthening the local capacity for planning the use of scarce local productive resources, b) involving communities in the planning process, and c) building the technical capacity for implementation of what has been planned.

The challenge to the successful implementation of a local level planning structure, whose process includes inputs from and involvement of communities and other stakeholders, is to create/establish a conducive environment within which 'responsive local governance' can nourish and grow. Relevant experiences have shown that although availability of financial and human resources is necessary for a successful implementation of local level planning structures, it is not enough. More often than not, it has been noted that allocated resources, even in very poor areas, had not been fully utilised or appropriately used. This is not because the need for their use was not there or their appropriate use was not known. But because of inappropriate local politics, absence of an effective local governance structure, inappropriate technical standards, contractual arrangements, etc., the situation has led to constraints that seriously impeded what was intended to be achieved. No one institution or government can claim to have the answer to these problems. It is the collected and concerted efforts, both by governments and development organisations, that can address some of these difficulties that are considered serious obstacles to development. What cannot be ignored, and the importance of which cannot be underestimated, is the involvement of people to be in charge of planning what they need and their being equipped to get what they need.

So what can be done to contribute to establishing a conducive environment within which responsive local governance can flourish? There are ways and means, although modest in nature, which can contribute to addressing this challenge:

· Enhancing partnerships with governments and development organisations to increase a concerted effort at the local level that empowers communities in their role to plan and implement what they need. This has been accomplished in the past through raising awareness on relevant issues and carrying out joint project activities, an effort that can be enhanced.

· Playing a catalyst role between NGOs, government organisations, the private sector, and development institutions, linking needs with available resources.

· Producing tools that are needed to equip local organisations, communities, and small enterprises to carry out what they intend to plan, implement, and maintain. This includes production and dissemination of training guidelines, manuals, information materials, building local capacity through training of trainers, assisting relevant academic and training institutions etc.

2.3 Can Employment-Intensive investments really be considered as part of mainstream economic development?

In developing countries one of the major available local resources is labour. The concept that the ILO is currently promoting is 'employment-intensive investment' (EII). Employment-intensive means making use of as much labour as is feasible in a given economic situation. Investment means putting money into a future benefit. When money is invested, the concept of employment-intensive investment aims to promote and facilitate the optimisation of the employment content in the creation of future benefits.

The focus of our analysis is the optimum use of this labour resource. Over the last three decades a technical and management system for optimising the use of labour in infrastructure works has been developed and applied, and it is this that is called labour-based technology. One of the fundamental principles in the application of this technology is that its products should conform to the specified technical and quality standards, and that they should be cost efficient.

To answer the question as to whether EII can be considered as part of mainstream economic development, we need to examine different aspects of the impact and viability of labour-based approaches:

1 What contribution do labour-based approaches make to the Gross Domestic Product (GDP)?

2 Are labour-based work methods financially and economically viable?

3 How 'formal' or 'informal' are labour-based works, and are labour-based approaches sustainable in the longer term?

1 What contribution do labour-based approaches make to the Gross Domestic Product (GDP)?

In many developing countries, the construction sector as a whole accounts for a significant part of the Gross Domestic Product (GDP). For example in Uganda, the sector accounted in 1990/91 for approximately 7 per cent of GDP; this figure rose to approximately 24 per cent in 1994/95 ⁽¹⁾. Labour-based approaches are mostly applied within the construction sector. Therefore the implementation of labour-based programmes has to be looked at within the context of contributing to the construction sector and the domestic construction industry. If we do not take this as a starting point, the question of whether LBT approaches are sustainable in the long-term would most likely receive a negative answer. There are examples of labour-based programmes implemented in Sub-Saharan Africa over the last decades that aimed at providing temporary relief in times of hardship. Although arguably necessary, such interventions will not lead to the adoption of LBT as a recognised, economically justifiable, and technically competitive construction method. Sound labour-based approaches are only viable in the long term if the value of both the work undertaken and the assets created in e.g. irrigation, roads, and housing are recognised in the same manner as other infrastructure investments that serve the country's economy.

Certainly there are many programmes in various countries that are making use of labour-based techniques in an efficient and competitive manner. However, we should acknowledge the gap in available data about the contribution of labour-based approaches to the construction industry as an economic sector, and to the GDP as a whole. One reason for this gap is that, while many labour-based programmes are implemented with proper monitoring systems in place that keep track of financial costs, they do not monitor economic input-output relationships. Another reason is that labour-based approaches are not necessarily applied nationwide, but scattered in projects or programmes throughout the construction sector. Having said this, a number of studies have been undertaken in recent years (e.g. the ones commissioned by the ILO in Uganda, Madagascar, Lesotho, Zimbabwe, and recently in South Africa) and have provided important evidence about the macro-economic impact of labour-based infrastructure interventions versus equipment-based approaches.

Concerning the economic impact potential of the labour-based approach, it is of interest to estimate what proportion of total infrastructure investments can be executed with labour- and local resource based methods. Based on certain rather conservative working hypotheses, the potential impact in a few selected countries has been estimated. As an example, in Ghana, if 20 per cent of public investment and 10 per cent of private investment in infrastructure were to be executed by labour-based methods, this would amount to a labour-based investment budget of about 100 million US dollars per year. This in turn would create about 50,000 direct and 75,000 indirect jobs, in excess of those that would be created by conventional construction methods. ⁽²⁾

In addition, it would be pertinent to examine what additional socio-economic benefits would accrue, under existing levels of investment in the construction sector, through the use of labour-based methods of implementation for construction and maintenance of infrastructure.

2 Are labour-based work methods financially and economically viable?

Various financial cost analyses of labour-based works have been undertaken, such as those in Uganda, Lesotho, Ghana, Madagascar, and Zimbabwe. The main conclusion in all these analyses was that labour-based methods are cheaper than conventional methods for the construction and maintenance of large parts of the infrastructure network, in various sectors. Furthermore, the use of labour-based methods resulted in important savings in foreign exchange, and was able to absorb considerable numbers of unemployed and underemployed people.

The potential benefits of labour-based approaches in terms of employment creation cannot be overemphasised, and there is a need for countries to recognise and exploit their natural advantage in terms of the abundance and cost of labour, when compared with the costs of capital (and possibly foreign exchange) for equipment. In general, at current prices, labour-based methods have proved to be financially competitive where wage levels are four US dollars per day or less, although it may also be viable at even with higher wage rates.

Given the present economic climate in many developing countries, it is important that we judge labour-based methods on the advantages they bring in terms of retaining and circulating money in the local economy, in addition to the employment created. Employing large numbers of local labour raises the spending power of members of the society, which in turn impacts upon the wider economy. This is not to imply that the application of labour-based methods is a panacea for all socio-economic difficulties, but it does mean that this is a viable option for national development.

3 How 'formal' or 'informal' are labour-based works, and are labour-based approaches sustainable in the longer term?

More and more public infrastructure is subcontracted to the private sector. In this situation, for labour-based methods to be sustainable, provisions for registering small-scale labour-based contractors, and for giving them a share of the contracting market, have to be put in place. In other words, labour-based methods need to be accepted into the 'formal' construction sector.

Are labour-based methods sustainable in the long run? If there is a gradual shift towards more capital intensive modes of implementation--through cost-savings and economic comparative advantages, or high labour costs indicate that this is necessary--then it is unavoidable that the application of labour-based methods will decline over time. However in the medium term in many countries in the region, labour-based methods will continue to be a positive choice not only economically, but also in terms of employment.

Conclusion

Can employment-intensive approaches be considered as being part of mainstream economic development? In principle there is no reason why they should not be. In practice, investors are still wary of using them for mainstream infrastructure provision, for a number of reasons. It may be that public sector investors are unaware of the potential of employment-intensive approaches for improving local and national economies. There is also wide scepticism about the quality of work resulting from the application of labour-based methods. The challenge is to make investors aware of the benefits, and to instil in them a belief in the quality of the resulting product. Only then can we expect a higher level of commitment of development funds to employment-intensive solutions for the provision of public infrastructure.

2.4 Who influences technology choice and how?

Technology choice in a free economy is a function of a number of factors, such as political, economic, social, environmental, and the end product. The end product can be achieved in a variety of ways. At one end of the spectrum the client may specify the end product and leave the service provider to decide on how to achieve the expected output. At the other end of the spectrum the client also defines the methodology of achieving a particular output. The latter approach tends to prescribe the technology choice and is often meant to 'kill more than one bird with one stone' as the output goes beyond the primary objective of creation or preservation of an asset.

It has been argued that in some instances clients, donors and Governments have defined the technology to be used in order to gain extra benefits when the service provider would have preferred to use another technology option to achieve the same result. Some donors specify procurement systems that accommodate their home countries' companies at the expense of the weak local contractors who cannot compete on the same terms. Government procurement systems have also impacted on technology choice. The question thus becomes, what justification does a government have to manipulate technology in a modern economy? One answer may be that government has a social responsibility to ensure the well being of all its nationals and to achieve this it has to intervene by way of policies and legislation that create an environment conducive to the survival and development of its citizens. In terms of the objective of reducing poverty through the dual output of employment creation and infrastructure provision, the government's interventions can be broadly classified into three strategies:

· Policies which inhibit the use of capital equipment

· Policies which promote the use of labour-based methods

· Holistic policies for economic growth.

Policies which inhibit the use of capital equipment

Most countries in Sub-Saharan Africa import heavy equipment. In general, intermediate equipment, which is ideal for labour-based works, can be manufactured by local or regional industries. In an effort to discourage the private sector from using heavy equipment, the Government may:

· increase import tax on heavy equipment

· reduce depreciation allowances on heavy equipment

· increase real interest rates

· define specifications and standards in a manner that renders the use of heavy plant financially non-viable.

Policies which promote the use of labour-based methods

Encouraging the use of labour implies taking advantage of relatively low costs of labour. The following are some of the interventions that a government can put in place to promote use of labour:

· take advantage of the relatively low wages which allow labour-based methods to be more competitive than equipment based methods, while also ensuring that wages are sufficiently attractive not to be exploitative or to affect productivity

· establish local legislation to achieve an optimum balance between the protection of workers' rights and the required flexibility to encourage the use of labour-based methods

· increase labour productivity, e.g. by providing training incentives to companies that improve the skills of employees

· target procurement, e.g. by the preferential award of contracts to those who put more effort into meeting the government's social objectives.

Holistic policies for economic growth

A probably more 'palatable' approach is one which seeks a complementary scenario by having policies that ensure the thriving of both equipment based and labour-based technologies in appropriate sectors in order to contribute optimally to the micro and macro economy. For, example there is no point in taxing capital in an industry that can never have high labour absorption; and labour-based solutions are not applicable to all construction activities. There is also a limit to which labour deregulation can be effected without affecting the working conditions for the labour-force, and the level of acceptable wages, in pursuit of an increase in employment creation. Some policies, such as extreme taxation of capital in order to promote labour employment, could have short-term benefits but hamper economic growth in the long term.

Apart from governments, communities can also influence equipment choice. More and more communities are becoming involved in planning development activities in their residential areas. Besides planning, communities like to become involved in implementation, and often prefer a technology that they can handle, and which will benefit the residents through employment. Communities, if made aware of the technology options can and will influence local politicians.

What is the future beyond the current labour-based technology?

At face value the use of labour-based methods could be interpreted to mean that they are for un-developed and under-developed countries. In actual fact it is an economically justifiable use of their comparative advantage over countries with high wages and costs for employment. The creation of employment can be the springboard for increasing purchasing power, improving demand, leading to jobs in other sectors, and therefore leading to investment in capital intensive investments as the economy develops.

From the arguments presented above, governments are likely to continue influencing (but not managing) technology in order to develop various sectors of the economy and achieve equity and social justice for their citizens. Looking at the future prospects of many developing countries, the next five to ten years will require a concerted effort to arrest or reverse the vagaries of poverty. An understanding of the problem and political will to solve it are a prerequisite. Technology will drive the strategies that can be employed in pursuit of a solution.

The next question thus becomes, how can we make labour-based technology take us beyond the current level of benefits?

In most cases the apparent solution to increasing the benefit to cost ratio is to cut costs. There is a limit to how far costs can be cut. If we want labour-based technology to lead to a dramatic impact on the ground then we should be calling for a breakthrough in technological innovation. Breakthrough innovation occurs in a demand driven environment. Currently, in most countries, labour-based methods are predominantly supply driven as governments still 'drive' technology choice. How then can we change the environment so that employment intensive methods are demand driven by the private sector? This challenge goes beyond having the private sector just using employment intensive technologies for the sake of entering the contracting environment or winning contracts, but because it makes business sense to do so.

2.5 How 'contractor-like' are small-scale contractors? Are they truly independent and can they independently access markets?

What are the objectives of the development process?

The major objectives of contractor development programmes for most practitioners who are involved in development work are of two kinds:

· the promotion of affordable technology to partner countries, some of whom are suffering from debt servicing, that will enable them to provide communities with the most essential infrastructure services in a sustainable manner, that will in the process

· create employment and contribute towards improving the livelihood of communities.

What has been the experience?

The development process in various countries has taken different routes. Some development programmes have tried to give assistance to entrepreneurs that in practice may not contribute to the development process beyond the immediate development phase. Various programmes have offered equipment loans to emerging contractors ranging from US$10,000 to $150,000. As a means of loan recovery, contractors have been issued work without any competition until they have repaid their loans fully. One may ask what will be the contractors' income level be that will allow for loan repayments to enable them to settle such a huge debt within reasonable time. Similarly one questions for how long the client has to commit himself to a private "direct labour" approach.

Other programmes have offered the contractors the very minimum financial assistance but facilitated the contractors' access to commercial financial institutions. This approach has helped the contractors realise and feel closer to the real contracting environment. They have managed to learn in practice loan negotiation skills with commercial institutions. Contractors with no start-up capital have been offered the less risky routine maintenance contracts, whereas those with some start-up capital have been offered rehabilitation contracts.

Different programmes are looking at ways of addressing this issue, and a lot of experience has been gained from lessons learned. The results of the experiences should be incorporated into future projects / programmes through adjustments during the planning phase.

Issues that require some consideration

Contracting environment

We are aware that the existing systems in most countries are not conducive for small contractors. At the same time it is important to note that the development process should be sustainable and has to survive the post project period. Most programmes have tried to create an appropriate system with the intention of making the contractors' ride as smooth as possible. In the process an ideal environment was created that could not be sustained. The newly developed systems do not have sufficient linkages and could not be incorporated into the clients' system during and in some cases much after the project period. Such systems will fail. The contract management system has to be developed taking into account that they have to be incorporated into the existing system, avoiding the creation of an ideal environment. Why do we have to create the ideal world for the small contractors? Are we not protecting them from the inevitable?

Role of the government

In almost all programmes currently being implemented, governments play several conflicting roles. They are clients, supervising agents, trainers, mentors, etc. These roles conflict with each other and sometimes governments make decisions that can result in the contractors seeming to be used as an extension of a direct labour team. This practice will not produce an effective private sector that will participate in the construction sector. Governments have to remain clients and lead players in the development process by making fundamental changes that are suitable to small contractors but part with the rest of their responsibilities including:

· Supervising agent:There are already some good signs in this area. Some programmes have started engaging private consulting firms to play this role. Experience has shown that the conventional consulting firms do not have sufficient knowledge and experience of using employment creation methods of implementation in infrastructure works. This has to be addressed in a form of awareness seminars, re-orientation training, or any other appropriate interventions.

· TrainerThere is no question that the government has to allocate sufficient resources to the development process in the form of training funds and work during the post-training period. However, it may not be appropriate and sustainable for the public sector to train the private sector. In many places the public sector has a reputation for inefficiency and lack of commitment (this may or may not be justified). With these credentials and perceptions, the public sector may not be an appropriate home for training. Training should be carried out and coordinated by the private sector through various associations (Contractor, Professional, etc.), where strong associations exist. This area has to be explored further. Support, both financial and technical, should be provided to such institutions to build their capacity in the planning and implementation of the development programme. They should also be in a position to draw upon the training expertise available in the private sector.

Competitiveness

The real world of contracting is based on competitiveness. This will result in efficiency and quality of work being produced by the private sector at a reasonable cost. The government's role will be to level the playing field by putting in place appropriate legislation that will enable it to address its objectives by producing an appropriate development friendly procurement tool. I.e. a procurement tool that provides fair access to work for small contractors, and which can also addresses issues of local preference and employment creation.

If small contractors have to survive in the competitive contracting world, they have to start learning the real environment at least initially by competing between themselves and later with other contractors.

Resources requirement

It is clear that most programmes are targeting ordinary individuals who possess little or no resources, but who have good entrepreneurial skills. This situation makes it imperative that new contractors be given some initial assistance in the form of start-up capital. What will be the appropriate form and size of assistance to be provided?

Some programmes have opted for providing substantial assistance in the form of equipment. The size of the assistance varies from about US$10,000 to about US$150,000. At the same time most of us are aware that loan recovery is another weak area of government departments. Some of us have said that this is a small price that governments have to pay in building the capacity of the local construction industry.

The above creates dependency from the start and forces the government to allocate work to each of the contractors without any form of competition, since this approach is considered the only means of loan recovery. At the same time this may encourage the contractors not to execute government contracts on time and in accordance with the contract document, since this will give the contractors a guaranteed access to work. Where is the benefit to the client? It is our understanding that the contractors will not be competing since they have to repay their loans. In the process the government will be in a difficult position to recover the loans if they do not continue providing work. Is this the type of sustainable contracting we wish to promote?

Instead, we should encourage contractors to commence work from the level they can afford, thus minimising the level of their debt. Routine maintenance work is less risky and less resource demanding. At the same time the economic return to the client of routine maintenance work is very high, resulting in governments increasingly allocating funds to maintenance works. This will be the best entry point for contractors with a minimum start-up capital. In other words a form of registration has to be established where interested entrepreneurs will be eligible to participate in the development process with minimum assistance.

What will be needed for a sustainable contractor development programme?

It will be appropriate that governments concentrate on policy development and funding contractor development programmes and civil works. What are the important policy areas that have to be looked by governments?

· Governments need to develop bidding documents that will be legally acceptable and transparent favouring the implementation of government objectives in the process, i.e. supporting emerging contractors and employment creation.

· Various types of concessions/incentives have to be developed and implemented. Contractors who are favouring employment creation methods of work and who achieve a higher level of employment creation per unit of currency spent on the execution of the work and above government set employment targets have to receive some benefits for contributing to government objectives. The concessions could be in a form of tax cuts, extra points during the contract adjudication process, access to government credit support, become eligible to bid on public bids, etc.

· Facilitating small contractors' access to commercial financial institutions by removing some of the fear these institutions may have. Experience has shown that the fear is mainly the result of the lack of information.

· Accreditation of training programmes and training providers.

· Registration of emerging contractors.

What about training? It will be wise and probably more business focussed if the professional associations (e.g. Contractor Associations) or private training institutions provide training with government financial assistance. In this case the government will have the responsibility of carrying out the necessary quality control of the training programmes.

Planning of future development programmes have to offer alternatives for a contractor's starting point based on the capacity of the contractor to implement the work with minimal financial and technical assistance. Contractors could commence work from less risky and less resource demanding activities (e.g. routine maintenance) and climb up the ladder to a more risky and resource demanding activity (e.g. construction).

Governments, donor agencies, and international financial institutions have to support the development programme by earmarking part of their capital investment to infrastructure works that will be implemented using employment creation methods of work through the private sector.

What are the particular constraints faced by community-based contractors?

In community contracting the community plays an important role not only in the planning but also in implementing the infrastructure improvements or service delivery. A community contractor is normally a resident or a group of residents from the area in which the infrastructure improvements takes place.

Community contracting has been developed for various reasons. Some of the reasons include:

· To have active participation of the community in the implementation of works. It can be seen as a tool to ensure that participation is actually happening and that the communities have some kind of power position to influence how the works are implemented and maintained, thus improving sustainability.

· Capacity building for community organisation and negotiation: to empower community groups and to make them more familiar with contracts and signed agreements.

· Capacity building for community contractors: to train economic groups within the community as small labour-based (petty) contractors. In this case, the community contractors receive almost all their training on the site and learn to deal with simple contracts by implementing contracts under guidance of a technician or engineer. The community contractor normally does not own any equipment and will hire most of these types of services as needed.

· Investment strategies: funds can remain within the community and can be reinvested.

In Hanna Nassif, Dar es Salaam, the unplanned settlement construction works have been carried out by community contracts for almost five years. In the last two years, 22 community contracts showed that the quality of works is more or less similar to the quality of a small external labour-based contractor, and that the costs per unit of constructed infrastructure were much less (report by Clifton and van Esch, July 2000 draft). However, the continuous training and guidance of a labour-based engineer has not been included in the cost comparison and these training costs can be considerable. In Dar es Salaam the community contractors plan to register themselves with the board of contractors as a labour-based contractor. This should allow them to continue simple maintenance works in other areas and compete for city council contracts.

In Tanzania and Kenya similar types of contracts (petty contractors, village contracts) are used in rural areas. The contracts are often awarded after a simplified bidding system and normally contain simple maintenance works. In a sense, these community contracts can be seen as a mode of implementation that is somewhere between force account and private contracting.

Currently the World Bank also sees community partnered procurement as a suitable way of improving and maintaining community infrastructure, and has developed procurement guidelines for these kind of contracts. The advantage of starting the training of community contractors, particularly in the urban sector, is that no large credit provisions to allow the contractors to purchase equipment are necessary.

Therefore we feel that the challenge of community contractors is not so much to get access to financial resources, but rather to be trained and taken seriously by the various clients. Contract documentation and tender procedures have to be simplified to allow community contractors to carry out maintenance works and in some cases simple improvement works. These simplifications need the agreement of the rural or municipal authorities and a commitment to their continued use.

The future

In the future the main challenge will be to mainstream the various successful pilot experiences in larger scale programmes which should be reflected in policy documents encouraging community groups to take a more active role in construction works.

2.6 Decent Work: What should be included in codes of good practice and other regulatory mechanisms?

The ILO's mission is to improve the situation of human beings in the world of work. Today, that mission finds resonance in the widespread preoccupation of people at times of great change: to find sustainable opportunities for decent work. The International Labour Conference in 1999 endorsed the Director-General's proposal to set a single primary goal for the Organisation: "to promote opportunities for women and men to obtain decent and productive work, in conditions of freedom, equity, security and human dignity".

The goal is not just the creation of jobs, but also the creation of jobs of acceptable quality. All societies have a notion of decent work, but the quality of employment can mean many things. It could relate to different forms of work, and also to different conditions of work, as well as feelings of value and satisfaction. The need today is to devise social and economic systems that ensure basic security and employment, while remaining capable of adaptation to rapidly changing circumstances in a highly competitive global market.

Labour policies and practices in employment intensive programmes

The ILO's employment intensive infrastructure projects in over 30 countries have been carried out in a wide variety of conditions and national contexts. National rules regulating the temporary employment of workers and small contractors working in programmes of this nature are most often either irrelevant or need to be developed from the ground up.

Where machines are used in construction, the issues are downtime, availability of spare parts, fuel, qualified technicians, and foreign exchange. As labour-based technology is very much dependent on the availability and performance of labour, the issue is how to manage large work forces in order to provide workers with decent working conditions while maintaining satisfactory levels of productivity. Indeed, the success of labour-based works is based on the successful involvement of people in construction and maintenance works, and the ILO firmly believes that an improvement in the labour practices and working conditions will have a positive impact on the productivity and the long-term viability of labour-based operations. The question of ensuring decent working conditions at the same time as satisfactory levels of productivity possibly becomes even more relevant with the increased use of the private sector.

The Employment Intensive Investment Programme (EIIP) of the ILO has put together a guide on how to deal with labour issues in the context of employment intensive infrastructure programmes, and how to ensure these programmes conform to the relevant ILO standards. The guide is called Employment Intensive Infrastructure Programmes: Labour Policies and Practices and is targeted at those involved with the design and implementation of urban and rural infrastructure projects.

Moreover, as an active step in promoting decent working conditions in labour-based construction, and at the same time raising awareness, the ILO has conducted two national workshops on the subject during the past year, one in Zambia and one in Namibia. These national workshops were followed up with a sub-regional workshop where the experiences were shared.

So, what are the most important issues to consider?

· Minimum Age: As a first consideration, child labour should be avoided through the application of the related labour legislation in the country concerned. The international 'Minimum Age Convention' states that "No person under the age of 15 should be employed or work. No person under the age of 18 should be employed or work in hazardous circumstances".

· Forced Labour: In respect of forced labour, it must be ensured that 'voluntary' contributions are truly voluntary, in other words that the workers concerned work for their own benefit and are not forced in any way.

· Minimum Wage: The worker should get a fair wage, at least equal to the minimum wage or to applicable collectively bargained wage levels where these exist. Where these do not exist or where they are clearly irrelevant to the labour-based sector, an attempt should be made to negotiate an agreement with the social partners involved. A related issue is the choice between time-based remuneration (based on hours worked) or productivity-based remuneration (based on the amount of work done).

· Equal Treatment: Equal treatment of male and female workers is another issue to be taken seriously. Men and women should get equal pay for comparable tasks, as well as equal access to employment and higher level supervisory and management jobs.

· Social Protection: This is the issue of ensuring a minimum level of social protection. Although it will be very difficult to set up social security schemes in this sector, an essential minimum is some form of insurance coverage for work related injuries. An obligation for insurance is often included in public contracts, although it is not always respected.

· Rest and Sick Leave: Workers should have at least 24 consecutive hours off each week. Also the practices concerning workers with non-work-related sicknesses and maternity leave are included in this issue (e.g. non-payment or payment, and job security).

· Safety and Health: Finally, the basic minimum working conditions on site should be defined and enforced. Minimum measures would include availability of clean drinking water, first aid facilities, and protective clothing for dangerous types of work, such as rock breaking.

In addition to what is mentioned above, many communities are becoming involved in the delivery of their own infrastructure and services with unpaid labour as part of their contribution. In these cases we must ensure that a) the workers are the direct beneficiaries, b) the infrastructure must serve only the community and not outside interests (unless a contribution has also been secured from them), and c) even if there is no payment, decent working conditions should also be applied.

Of course, introducing labour regulations costs money, and may be difficult to enforce in the many and widely spread work sites. Use should therefore be made of the tendering and contract system to introduce regulations and to enforce adherence to these. Simple clauses can be introduced into contract documents on the treatment of workers, dealing with the issues discussed above. The client--for civil works in most cases a government agency--should define the items of particular concern in the tender documents, and be prepared to accept the additional costs involved as specified in the contractor's bid. Similarly the client has an obligation to make timely and regular payments for certified work, thereby enabling the contractor to pay the workers on a timely and regular basis.

Social Dialogue

The development of such a 'fair' working environment will take time and effort, but is indispensable for labour-based programmes to last, and for local labour-based contracting firms to have a long-term future. The involvement of representatives of government, employers, and workers in defining these appropriate standards, conditions, and regulations is very important in achieving this long-term sustainability.

Organisations of workers and employers, and dialogue between all three social partners (government, workers, employers), can help avoid problems and improve productivity and sustainability of labour-based works. Social dialogue is a powerful tool that has helped solve difficult problems and foster social cohesion, but it cannot be taken for granted. Developing an interactive process for consultation and negotiation takes time and commitment. It also needs social partners that have the capacity and will to engage in the process responsibly, and the strength and flexibility to adjust to contemporary circumstances and exploit new opportunities. The State has an important role in enabling and fostering all forms of social dialogue. It needs to create an environment in which the contributions of employers, workers, and other groups are solicited and valued. A precondition for this is respect for freedom of association and facilitation of collective bargaining.

Employers Organisations: for the future, it will be particularly important to help employer's organisations to support employment policies geared to small and medium-sized enterprises, which serve as vital growth engines around the world. Codes of conduct stipulating the roles and responsibilities of clients, contractors and workers, are the other potential areas for future attention. It will also be important to be able to demonstrate linkages between good working conditions and improved productivity.

Workers Organisations: for workers' organisations the challenges of the global economy are just as complex, perhaps more so. In the context of employment intensive programmes the most important issue is how the temporary work force can be represented. Workers' organisations could act as an important interest group in promoting employment intensive programmes and securing broad public support for important employment issues, provided they have access to, and an understanding of the work and related working conditions.

Governments: just as employers' and workers' organisations have to deal with a new world of work, so do governments. Governments need to develop a more coherent and integrated set of labour policies that are applicable to labour-based works. In the case of labour authorities, they need to use their limited resources to best effect, whether for encouraging social dialogue, for resolving labour disputes, or for exploring new ways of organising labour inspection.

The future

How can the ILO assist all the social partners, employers' and workers' organisations and governments, to meet the challenges of the new world of work? The ILO should continue to stress the value of tripartite consultation and collective bargaining, helping employers and workers alike appreciate how a positive environment for labour-relations promotes change, innovation and competitiveness. Many policies, such as training, social insurance, etc. will benefit greatly from tripartite consultation. For this reason the employment intensive infrastructure projects supported by the ILO will strongly encourage the formation of contractors' and workers' associations, and the start of a dialogue between the social partners concerning the labour issues referred to in this article. This in turn should lead to fair treatment of workers and an improved basis for the sustainability of labour-based methods.

3 In conclusion

Much of what has been presented here in this paper deals with the environment and policies surrounding the planning and implementation of labour-based works. We should like to conclude with a short reminder, as much to ourselves as to our partners, that the working environment and supportive policies, described in the preceding sections, will not result in increased employment and the provision of good quality infrastructure unless we are continuously exploring means of improving the technology and the methods of quality control.

Re-orientation and training of all levels of staff must continue to ensure that implementers are conversant with suitable methods of organisation and management of labour-based works and the appropriateness of labour or equipment for the different construction activities which combine to complete a project. Good working examples must be there for all sections of society to visit and see for themselves just how good the quality can be and what the benefits are to those participating in the works, be it the workers, contractors, or client / government agencies.

But, above all, we need to ensure a continual investment into the technology in order to optimise job creation. How shall we do this? First we have to make planners, decision-makers, and investors aware of the options. Even after all our collective efforts, it may be that few investors look at alternative options for the way in which funds earmarked for infrastructure development are deployed. That is partly because there is no built-in procedure that forces them to consider different options, and partly because they are unaware of what the options are.

Secondly, once planners, decision-makers, and investors are aware of the option of optimising the use of local resources, they need to believe in the appropriateness and effectiveness of this option. This belief can be fostered by having successful labour-based projects available as demonstrations, in order to demonstrate that labour-based approaches deliver quality infrastructure that can be maintained by local agencies.

Lastly, even after they are aware and convinced of the use of these approaches, planners, decision-makers, and investors need to commit investment funds to projects and programmes that will contribute to mainstreaming employment-intensive infrastructure development.

We believe that all potential investors need to go through these steps, but now we have to ask: what would motivate them to do so? One answer could be: Government policy and procedures in place (e.g. the Namibia White Paper; the Philippines Declaration; South Africa's Targeted Procurement). The real challenges are: how can we get Governments to create an enabling environment? How can we inculcate in local professional staff a positive attitude to employment-intensive investment? How can we sensitise communities to a belief in and a demand for this kind of investment?

Final word

There are many other issues such as appropriate standards for rural and urban infrastructure, diversification of trained contractors, procurement procedures of donors and lending institutions, etc. which we have not had the opportunity to addressed in this paper. Never the less, we consider these to be important issues for the future of labour-based methods and we hope to see some of them raised from discussion on other papers to be presented to the seminar.

1 Gary Taylor and Moses Bekabye, An opportunity for employment creation, labour-based technology in road works: The macro-economic dimension, Uganda, June 1999, for the International Labour Office, Development Polices Department, Geneva.