1. The Asian and Pacific Regional Round Table on Roles of Enterprises and Society Partnerships was held in Bangkok, Thailand, from 22 to 24 September 1999.

2. The Round Table was attended by 46 participants from 12 countries and one Special Administrative Region. They included 21 Government representatives from ministries of labour and industry as well as 13 Employer representatives and 12 Worker representatives. There were six special resource persons and a representative of the International Confederation of Free Trade Unions (ICFTU-APRO).

3. The Round Table comprised three technical sessions, whose themes were human resources management (HRM), corporate citizenship, and the employment potential of small business. Each technical session had two resource persons and was followed by tripartite working groups which discussed each theme in greater detail in order to reach a common understanding.

Opening session

4. Opening the meeting, the Regional Director for Asia and the Pacific said that enterprises had always been a core concern of the ILO’s. Their evolution was as important as the growth of social institutions. Employers were on a par with workers and governments within the Organization. A recent major example of our concern for enterprises was the International Labour Conference’s adoption of Recommendation 189 to promote the "fundamental role of small and medium-sized enterprises" in generating "full, productive and freely chosen employment".

5. The spread of the market economy and democratic process had, she said, made the quality of people’s lives and the health of their country’s economy more dependent than ever on the dynamism of enterprises. The Asian crisis had shown the far-reaching effects of globalization. The whose inequalities globalization had wrought in the region challenged the ILO’s founding principle that "universal and lasting peace can be established only if it is based upon social justice."

6. The topics of this Round Table were closely related to the ILO’s four strategic objectives. Sound human resources management was indispensable in the new world economy. The competitive edge in that economy increasingly lay in the knowledge and skills of the workforce. So she agreed with Mr Hiroshi Okuda, the President of Toyota Motors and the Chairman of Nikkeiren that "long-term vision and people-centred economic activities" were vital for corporate restructuring.

7. She recalled that, the 1995 World Summit for Social Development in Copenhagen had made a solemn commitment to the goal of full and productive employment and that to achieve this goal, it was necessary to create an environment in which enterprises had the incentive to generate "decent work". This was a particularly high priority in Asia which had the largest number of poor people in the world.

8. She denied that corporate citizenship was valid only in more advanced economies. This was plain from ILO successes in the region in respect of child labour, which had been achieved through the combined efforts of employers, workers and government.

9. It was important for the ILO to help create an enabling environment for all workers: women and men. In many parts of Asia, women were overworked, underpaid and left to their own devices. But progress was being made. The special problems faced by women entrepreneurs would, she promised, attract attention during the Round Table.

10. By helping to forge new partnerships and further the development of sustainable, responsible enterprises, the participants would, she was confident, demonstrate that the ILO was an organization of workers, employers and governments. This was the strength that enabled it to reach out and promote democratic, open societies based on a new vision of partnerships between governments, the social partners and civil society.

11. Speaking on behalf of the Director-General, the Director of the Enterprise and Cooperatives Development Department said that it was encouraging to see Asian countries on the way to rapid recovery from the crisis. He hoped that the Round Table would held the ILO’s constituents find new paths for economic and social development that would be dramatically different from the past practices.

12. From the several crises had hit various parts of the world, we had learned how to manage globalization more sensibly and wisely. Stabilization was necessary in the macro-economy and could be achieved through prudent fiscal and monetary policies, effective taxation policies and the availability of sufficient credit. Financial and capital markets had to be stabilized to give enterprises and working people confidence to make long-term investments in economic and social development.

13. A free market economy had to be developed in which the serious efforts and hard work of governments, employers, workers and enterprises would be properly rewarded. Social safety nets had been widely recognized as critically important for the income security of working people.

14. He stressed the importance of good corporate practices and of job creation through enterprise development. Enterprises in the global economy had to bear more responsibility for the financial, social and environmental consequences of their activities. Enterprises had to be accountable to their shareholders, investors, suppliers and creditors. More transparency was required along with effective supervisory mechanisms and "clean" management. For the ILO, human and social accountabilities in enterprise management would be major concerns.

15. Strategic human resources management was critical for long-term productivity and competitiveness. For future recovery and development, the challenge in human resources management was to develop cooperation and teamwork between employers and workers. Strategic management, participatory management and competency-based human resources management all had to be promoted.

16. He said that globalization required enterprises to improve economic and social performance and show respect for the environment wherever they operated. Fundamental human and workers’ rights could not be infringed. Corporate citizenship and social initiatives were expected of enterprises, and without them no enterprise could continue to be economically viable.

17. So far, he pointed out, globalization had not produced more and better employment. Workers who were no longer competitive in the global job market often had to turn to the informal sector. There was an urgent need in every country to create new jobs through the promotion of new businesses. Governments and employers’ and workers’ organizations had to create a policy environment that fostered more and better jobs for women and men.

18. Mr Suwat Liptapanlop, Minister of Industry of the Government of Thailand, said that the aims of the Round Table were in keeping with his ministry’s policy of strengthening the role of enterprises. They had made a significant contribution to economic and social development. The challenged posed by the turn of the century was to create a better society in which enterprises would mobilize the intelligence, skills and commitment of their workers through progressive human resources management and together adapt to technological change and global markets.

19. Small and medium-sized enterprise (SME) development was a priority for his Government. SMEs were the engine of growth and a very significant contributor to employment in most Asian countries. They played an important role in economic recovery. Before the crisis, SMEs in the manufacturing sector employed more than four million people in Thailand. Today, many SMEs were held back by a shortage of skilled labour. Short and long-term strategies and a package of measures had been formulated to support the development of SMEs. Of four recent adopted sets of measures to encourage private investment, three were aimed at SMEs; tax and tariff measures; equity investment measures and measures to improve financing for SMEs.

20. He described his ministry’s Master SME Plan. He anticipated that a law would be passed setting up a high-level policy-making SME promotion committee headed by the Prime Minister and an SME promotion office responsible for coordinating the SME action plan and managing an SME promotion fund.

21. Thailand would have an Institute for SME Development (ISMED), whose chief purpose was to spread information and provide support services to SMEs. The Ministry of Industry had initiated a large number of support programmes for SMEs seeking ISO 9000, 14,000 and 18,000 certification. To improve industrial competitiveness, the Ministry had prepared a Five-Year Industrial Restructuring Master Plan, which called for the restructuring of 13 priority industries.

22. He said that Thailand’s Promotion of Rural Industrial Development Project, which had built partnerships between enterprises and rural communities, was a key instrument of poverty alleviation. Other ministerial priorities within the ambit of enterprises’ social responsibility were worker training, job security, quality of life, safety and good environmental practices. Laws had been In collaboration with related agencies, such as the Ministry of Labour, Social and Welfare, the Ministry of Industry had initiated various laws to these ends. He offered cooperation of Thailand with other countries in sharing their experiences.

Human Resources Management

23. An ILO expert introduced the technical session on Human Resources Management (HRM). He put four key questions to the Round Table:

1) What did HRM mean?
2) What was "progressive" HRM ?
3) Who in enterprises and society had roles to play in developing and supporting sound HRM?
4) How could the various stakeholders best work together to attain sound HRM practices?

24. The expert said that managing human resources involved creating a comprehensive "people management environment" that encompassed and integrated five broad policy areas: (i) human resources flows, (ii) work systems, (iii) reward systems, (iv) employee influence systems and (v) employment practices. To help develop enterprise-specific HRM strategies, it was useful to view HRM as the sum and interaction of five subsidiary functions corresponding to the five policy areas. He therefore distinguished between (i) human resources allocation, selection, assignment, and redeployment (HRA), (ii) human resources best-utilization on the job and in the work context (HRB), (iii) human resources commitment-building (HRC), (iv) human resources development and workplace competence acquisition and application in a broad sense (HRD), and finally (v) human resources employment relations in the context of good employment practices including industrial relations and personnel administration (HRE). HRM is the sum of effective and equitable HRA, HRB, HRC, HRD and HRE, and HRM. Its outcomes are a result of policy choices made in functional areas ABCDE.

25. Each of the five policy areas that made up HRM involved three phases under human resources flows. At the inflow phase, HRM involved recruitment, assessment, selection, orientation and socialization. As to internal human resources flow, the issues were evaluation of performance and potential, internal placement, promotion and demotion, and education and training. Human resources outflow concerned termination, outplacement and retirement.

26. As to work systems, the areas of interest were: (i) broadly defined jobs, payment linked to productivity gains, job rotation, payment according to skills mastered, developmental organizational systems, methods and procedures, (ii) team assignments, team operation, evaluation by peers, self or peer supervision, and (iii) concern for learning and growth, minimum status differentiation and broad employee participation. In designing reward systems, attention should be paid to extrinsic rewards for employees, such as pay and benefits, advancement and job security, as well as intrinsic rewards, in the form of authority, accomplishment and job challenge. It was also pointed out that the factors of interpersonal climate, supervisory style, organizational culture and employee satisfaction and motivation were significant.

27. The expert differentiated two paradigms under the head of employee influence in HRM. One was the industrial relations paradigm, which embraced collective bargaining and other traditional labour management activities and interactions. The other paradigm was employee influence within the meaning of organizational development. This involved employees in devising or adjusting work systems and methods, implementing schemes such as quality circles, relying on employee suggestions for work methods improvements and similar such activities. Employee influence broadly referred to employee participation and organizational democracy, both of which were valuable. Autonomous working groups, quality circles and job enrichment efforts were specific important means of enhancing employee influence in enterprises. Representative participation, work councils, co-determination, producer cooperatives and self-determination also fostered greater employee influence. Lastly, it was observed that employment relations should include fair employment contracts, employment flexibility, effective dispute settlement mechanisms and equitable industrial relations practices.

28. Progressive HRM integrated five concerns: (i) economic efficiency and competitiveness, (ii) social equity and respect for people, (iii) product and service quality, (iv) concern for the environment, and (v) enterprise adaptability and innovation. These concerns needed to be integrated operationally within the key policy choice areas of HRM. Those who could develop and help achieve increasingly progressive HRM were top management, line management and supervisors, the HR department and the employees, whether individually or through their representative organizations. For best results they should work together to advance progressive human resources management by jointly striving to reach desired outcomes in terms of efficiency, equity, quality, the environment and innovation in each HRM policy area. In that way, commitment, competence, and congruence of individual and organizational goals were attainable.

29. The expert then identified key determinants the for choosing particular HRM policies. The first was a set of situational factors sensitive to the effects of globalization. They were management philosophy, business strategy and conditions, the role of unions, and the nature of industrial relations. Other important situational factors were task and process technology, organizational culture, work force characteristics, labour market characteristics, national laws and regulations, and societal values and culture. A second set of factors influencing HRM policies arose out of stakeholders' interests and their relative divergence or convergence within the enterprise. The interests of shareholders, management, employee groups, government, the community, unions, customers and suppliers all exerted significant influences on an enterprise.

30. Summing up, the ILO expert referred to the sequential flow characteristic of HRM policies and practices. First of all, global and national conditions and trends that affect the enterprise need to be taken into account. Secondly, these conditions gave rise to other situational factors that influenced the choice and content of HRM policies. Lastly, stakeholders' interests played varying roles in further influencing the choice and content of HRM policies. The result was actual policy choices, which led to specific HRM content and practice. This content and practice produce human resources outcomes in terms of commitment, competence and congruence with short term and long-term consequences.

31. Mr M. Ogden, Skills Formation Officer of the Australian Council of Trade Unions, outlined his paper on "Post-Fordism, Sustainable Work Systems and Modern Human Resources Management".

32. He announced a paradigm-shift so that companies continued to set store by prices and costs but gave greater weight to quality and innovation. This had begun in the 1980s and accelerated in the 90s. Trade unions had welcomed this shift since it made the quality of work more important at within companies. This shift constituted a major challenge for both unions and management, though much of the creative urge for practical changes in work systems had come from the unions.

33. There had been many obstacles to change, such as management structure and hierarchy. Europe had made deliberate efforts to develop sustainable work systems. In Australia worker cynicism had widespread insofar as management emphasis remained on cost-cutting measures and flexibilization of labour. However, in most industries the cost of labour was not the major cost. Therefore, to focus exclusively on labour costs was to lose sight of the true systemic problems undermining competitiveness.

34. Mr Ogden reported a strong correlation between the presence of trade unions and enterprise competitiveness. He also observed that companies with a high performance strategy and a unionized workforce had improved performance at twice the rate of non-unionized companies pursuing a similar strategy.

35. Companies needed to go for the "high road value-added economy", basing HRM on developing workers' competence and talent and making work systems a priority at all levels. In any event HRM strategies should be long-term, and unions should continue to promote the high road value- added approach as the most competitive and sustainable strategy. Management had to have a thorough understanding of the underlying basis for the paradigm-shift. Unions needed to build constructive organizational development approaches with management while retaining their autonomy and independent negotiating relationships with employers based on members' interests. The goal was a highly skilled, flexible, innovative and committed workforce to ensure long-term competitiveness.

36. Dr A. K. Srivastav of the ASTRA Group (Indonesia) summarized an Indonesian HRM case study conducted in Pamapersada Nusantara (Pama), Indonesia's most prominent contract mining company and a subsidiary of Astra’s. Pama had introduced company-wide restructuring in response to globalization and upgraded its technology, re-engineered processes, improved quality management, among other improvements. This entailed a new management information system, which improved systems and processes throughout the organization, changing organizational structure, roles and responsibilities, competence requirements, etc. The new demands placed on the organization as a result transformed Pama's approach to HRM.

37. The basic infrastructure for effective HRM lay in well-designed organizational structures and roles that cut across the HRM policy areas identified at the beginning of this session. The new organizational roles influenced employee motivation, involvement, commitment, well-being and performance. Aligning the roles with organizational structure, systems and processes resulted in upgrading and re-casting organizational roles themselves in a more effective guise.

38. Organizational development had laid the foundation for more robust HRM in Pama based on boosting the effectiveness of various organizational roles through a Process Based Role Analysis and Design (PROBRAD). Roles had been redesigned on a company-wide basis. The new designs contained all vital information about a role, including its mission, expectations, critical attributes and behavioural norms.

39. Dr Srivastav presented a concrete example of the process of role design and implementation. The Pama case study also showed how the effects on HRM of globalization. Well-designed organizational structures and roles were vital for HRM policies to work. PROBRAD had shown its value for restructuring to make organizations and roles more effective. Application of PROBRAD in Pama had led to improved self-actualization of the role occupants and resulted in enhanced employee motivation, well-being and performance.

40. Dr Steven Kates, Chief Economist of the Australian Chamber of Commerce and Industry (ACCI), observed on behalf of the employers that free enterprise and competitive markets were the most effective way to manage an economy: they contributed to greater prosperity, raised the standard of living and broadened individual freedom.

41. Enterprises were a mix of labour, management and capital. Sound human resource management aligned company goals with its employees’ personal goals. The people factor was crucial and put training and development on centre stage.

42. Other decisive components of HRM were recruitment, training/retraining, consultation, systems of pay, performance appraisal, promotion, performance-based pay, agreements with workers’ representatives to improve competitiveness, etc.

43. Mr Abdul Halim Mansor, Deputy Secretary General of the Malaysian Trades Union Congress (MTUC), said on behalf of the workers that it was important to gain a firm grasp of how HRM could make for a better working environment. A strong commitment on the part of management to sound HRM resulting in an HRM culture implied strong bipartism, workers’ education and planning for human resources development. A development focus should be placed on company achievements and shortcomings, and a company’s product seen as an amalgam of everyone involved in the various stages of production ad delivery. Sound HRM paid heed to management and workers’ concerns alike, human resources development being in the interests of all. In any event the prime stakeholders in SMEs were the workers.

44. Alongside the Job Creation in Small and Medium-sized Enterprises Recommendation, 1998 (No. 189) the core labour conventions were critical for proper management of human resources. Without proper regard for standards, social dialogue and social protection HRM could have no meaning.

45. The challenges posed by corporate restructuring, re-engineering, down-sizing and layoffs could be addressed but only on condition that worker participation was an integral part of any such process.

46. In a globalized economy SMEs faced problems of access to credit and were exposed to pressure and policy prescriptions from the international financial institutions. One important lesson of the Asian financial crisis was the need to work out solutions in common, involving players, such as the workers, who might otherwise have been excluded.

47. There was a need for vigorous governmental policy support to promote SMEs. In this area too, social dialogue among was paramount.

Corporate Citizenship

48. Chaired by Mr R. K. Somany, Chairman and Managing Director of Hindustan Sanitary Ware and Industries Ltd. (India), a technical session on corporate citizenship opened with a presentation by Mr Nobuo Tateisi, Chairman and Representative Director of the Omron Corporation and Vice-President of the Japan Federation of Employer’s Association (Nikkeiren).

49. Mr Tateisi said that Japan could contribute to the recovery of crisis-rocked Asian countries in three ways: by ensuring the recovery of Japan’s own economy to provide a market for Asian exports, working with economic restructuring programmes and embracing policies of liberalization and currency stabilization. The crisis notwithstanding, the future of manufacturing in Asia was bright thanks to a high level of savings, diligent and well-educated work force, and good infrastructure. Although the crisis had not led his company to pull out of the countries it had invested in, most other Japanese companies operating in those countries would do so according to a survey conducted by the Japan External Trade Organization (JETRO).

50. Mr Tateisi described the activities of his company, which had been established in 1933 and employed 23,500 people worldwide with aggregate sales of 555.3 billion yen (US$ 4.6 billion). The company’s management philosophy was encapsulated in its ‘motto’: "at work for a better life, a better world for all". Every morning Omron’s employees recited the motto, which guided both business and community activities.

51. Omron contributed to its employees’ well-being by giving them jobs and benefits, to their customers by offering useful products and services, lto the country through tax payments and to the shareholders through dividends. But because the company benefitted from the local community, it had a duty to contribute to social and community activities. The company’s Corporate Citizenship Group was in charge of community action.

52. Omron’s corporate citizenship activities fell into four fields: social welfare, culture and arts, science and technology, and international cooperation.

53. Turning to the question of corporate ownership, Mr Tateisi pointed to the dichotomy between the Anglo-Saxon shareholder view and the ‘Rhenish’ stakeholder view. The Americans, like many others, had begun questioning the wisdom of management practices that resulted in massive layoffs to produce short-term profits. It was important, he said, to bear in mind both the economic and social aspects of a company’s mission.

54. What was the proper response to stakeholders It was, he submitted, fourfold: transparency, information disclosure, accountability and fairness. Companies had to their decision-making systems to respond to the society they belonged to and whose development was vital for them. Companies would be able to do business in future only by working with the community as good corporate citizens. With the advent of globalization, they also had to build harmonious relations with the rest of the world. It followed that companies had to create new social values, which he illustrated in a video presentation of Omron’s factories employing disabled persons.

55. An ILO expert observed that there was no formal, universally accepted definition of corporate citizenship. But there was evidence that interest in corporate citizenship practices was growing. Most major corporations had put out statements of business principles and surveys of chief executive officers indicated that many of them though corporate social responsibility was important. There were more and more business coalitions concerned with these matters, some of them in developing countries like the Thai Business Initiative for Rural Development (TBIRD) and the Philippine Business for Social Progress (PBSB). The Global Compact that the UN Secretary General had announced at the 1999 World Economic Forum in Davos was another expression of the tide of interest in corporate citizenship

56. The reasons for businesses to adopt corporate citizenship practices ranged from philanthropic and to ethical reasons. Other motivations were the need to remain competitive and to comply with the law. As lobby and consumer groups became more and more influential, corporate citizenship and related initiatives offered a significant path to better corporate image and a way to safeguard brand integrity.

57. Corporate citizenship is chiefly concerned with human rights, environmental protection, supply chain relations, employee rights and community development. A recent ILO study of codes of conduct adopted in 211 enterprises indicated that the priority labour issues were occupational safety and health, equal opportunity, child labour, wages, forced labour, freedom of association and collective bargaining.

58. National legislation generally laid down minimum standards for corporate citizenship practice. Useful guidance was to be had in instruments like the ILO’s Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy, several charters of the International Chamber of Commerce (ICC), guidelines for multi-national corporations promulgated by the Organization for Economic Cooperation and Development (OECD) and such sectoral initiatives as the "responsible care" programme in the chemical sector. Enterprises could also refer to the general framework embodied in the Universal Declaration on Human Rights, the Declaration on Fundamental Principles and Rights at Work together with the Rio Declaration on Sustainable Development.

59. What lessons had been learnt so far in the area of corporate citizenship practices Programmes could only effective when senior management was fully committed and involved in. What is more, the overall objectives of a programme must be clearly reflected in enterprise policy as a whole. As to programme design, capacity building, long term relations with stakeholders, implementation partnerships between the enterprise and such other groups as local government and non-governmental organizations were all crucial.

60. Dr. H.J. Mohamad Thalma, Executive Director of the Workers Institute of Technology (WIT), Malaysia, explained that the WIT had been established by the Transport Workers Union in 1977 at Port Kelang. Its basic objective was to permit workers to exercise their basic rights to technical training and development opportunities. By 1986 WIT’s overall annual capacity had climbed to 2,000 students. Academically the Institute comprised three main centers of excellence in the fields of electrical, automotive, civil engineering, as well as a continuing education center, each offering a four tier- programme structure delivered along modular lines.

61. WIT had trained some 12,000 students so far. Programme costs had been covered various by the students themselves, by sponsoring industries or through aid donations from international agencies. The Institute worked closely with the private sector and employers providing equipment and other important inputs. The WIT exemplified productive partnerships between the trade union movement, enterprises and the Government to help workers acquire the skills they would need to remain competitive in the future.

62. Questions from the floor were raised about the relative productivity of disabled workers and the poaching of trained workers.

The employment potential of small business

63. Chaired by Mr Abdul Halim Manso, Deputy Secretary-General of the Malaysain Trade Union Congress, a technical session on the employment potential of small business was introduced by an ILO expert. He said that, the promotion of small enterprises in Asian countries was the more pressing because of the problems of joblessness and underemployment they faced. Small enterprises could generate decent, remunerative employment as long as their vitality delivered higher productivity and income levels. But there were many constraints on their growth and development.

64. Larger enterprises could promoted smaller ones, but it would be wrong for large concerns to regard smaller ones as a source of materials and services produced using cheap labour. The view larger concerns had of smaller business depended on the nature of the competitive environment. The ILO, governments and social partners all played a role in promoting small enterprises by establishing linkages to larger enterprises.

65. Ms Chen Ying, Deputy Director-General, CEDA (China Enterprise Development Association) presented a case study on the development of small and medium sized enterprises (including township and village enterprises) in the People’s Republic of China. She observed that small enterprises were very important in China, particularly where unemployment was widespread. There were more than 10 million small and medium enterprises contributing 50 per cent of GDP, creating 73 per cent of jobs and absorbing 230 million rural workers, most of whom began working in small and medium enterprises since 1978.

66. Since the late 1960s, China had seen various measures in favour of SMEs, including nine new laws and regulations since 1978. Among them were the township enterprise law, the Chinese/foreign cooperative enterprise law and private enterprise regulations. In April 1999 the Promotion of Small-Medium Enterprise Law was framed.

67. Multi-ownership businesses had been promoted and the non state-owned economy was recognised as a key part of the national economy. Development of the non-public economy was being encouraged in major cities. This presupposed cooperation with foreign investors and horizontal groupings across regions and industrial sectors. Redundant workers were invited to open private businesses and investment in high technology industries from private businesses was welcome. The restructuring of state-owned enterprises went hand in hand with the promotion of SMEs.

68. Ms Chen Ying reported that the China Enterprise Development Association, with its 360,000 members, was active in training entrepreneurs, publishing and disseminating relevant information and offering consulting services.

69. Mr Lalit Varma, general manager (materials) of the Eicher group in India, described the group’s support for the small enterprises that supply its manufacturing inputs. Eicher regards its suppliers throughout India as part of the group’s extended family. Those suppliers are small businesses. Through its Small Business Unit, it offers them such support services as business management training, consulting for expansion, technical training and advice on insurance and loans through financial institutions.

70. Mr Varma said the Group wanted to "make a difference to the world" and was active in community development projects which supported schools, established a charity eye-hospital and worked to preserve the country’s cultural and archaeological heritage.

71. The group attributed recent growth in sales, workforce and profits to its corporate citizenship programmes and business support.

72. In a discussion session participants considered the characteristics of quality jobs in small enterprises. Because of the limited size and capacity of small enterprises, job quality had to be viewed in perspective. It was said that an emphasis should be placed on voluntary initiatives in respect of minimum requirements for safe working conditions and affordable social protection.

73. As to the status of trade unions in China, it was announced that the country had more than 20 workers’ unions.

74. The driving force that pushed small enterprises to innovate and improve in Eicher’s case lay in the productivity and profitability gains that technology and skills development brought. The Eicher Group saw a competitive advantage in small enterprises which could often produce more efficiently than larger ones. Their efficiency fostered lower costs and employment creation.

75. Commenting from the floor, participants observed that small businesses often subsidized larger enterprises by allowing them to make late payments. In Nepal, for example, Value Added Tax (VAT) had placed a disproportionate burden on small business, and the procedures needed simplifying.

International Small Enterprise Programme (ISEP) and technical activities

76. Chaired by the ILO’s Regional Director for Asia and the Pacific, the open session on the ILO’s International Small Enterprise Programme (ISEP) and selected technical activities was introduced by an ILO expert.

77. He pointed out that most of the jobs being created throughout the world were in SMEs, which held a potential for quality employment opportunities under improved conditions. It was in light of this that the ILO launched its International Small Enterprise Programme (ISEP) in 1998 to support member States’ efforts to promote a supportive small business environment. The Programme was specifically conceived to provide assistance for implementing the Job Creation in Small and medium-Sized Enterprises Recommendation, 1998 (No. 189).

78. ISEP was designed as a comprehensive, integrated high-impact programme to help unlock the job creation potential of SMEs by promoting the entrepreneurial spirit. It covered five fields: (i) policy and regulatory reform, (ii) business development services, (iii) start-and-improve-your-business management training, (iv) job quality, and (v) gender issues. ISEP offered States technical assistance and financial support for small enterprise development programmes; useful publications; and fora in which to exchange information and plan joint activities.

79. Job quality, gender mainstreaming, working conditions, social protection, labour relations and the elimination of child labour had featured prominently in the ILO’s SME development activities. These were implemented in four ways: (i) best international practice assistance, (ii) donor resource mobilization for technical cooperation projects, (iii) exchange of staff, data and materials, (iv) and conferences. They were coordinated and delivered by the ILO’s multidisciplinary advisory teams (MDTs), three of which covered Asia and the Pacific. An illustration was given of technical assistance to Thailand in enterprise promotion.

ILO/Japan intercountry project on Strategic approaches towards employment promotion (China)

80. An example of ILO technical cooperation in the Asian region was explained by the Chief Technical Adviser of the ILO/Japan project on rural employment promotion through micro-enterprise development in China.

81. The employment situation in China was characterized by labour migration of young and often unskilled workers from rural districts to jobs in new urban industries. Increasing under-employment in rural areas had led the Chinese government to take an interest in exploring rural employment promotion strategies. The ILO’s project was implemented in three provinces in 1997 on a pilot basis in partnership with the Chinese government at provincial, country and township levels to explore approaches to micro-enterprise development and self-employment in the rural areas.

82. The chief aim was to generate employment in rural areas by providing micro-credit and training. The approach adopted was deliberately multidisciplinary, flexible and learning-oriented.

83. The project had evolved by stages from observation of existing local practices, to critical assessment of those practices and studying the lessons to be learned from experience gained in other countries, the role of international staff being that of advisers to help governmental counterparts develop programmes as they themselves saw fit.

84. The project had concentrated on (i) household based self-employment, (ii) group-oriented self-employment, (iii) individual micro-enterprises, (iv) sub-contracting, and (v) placing training-centre graduates. It had helped identify and expand market opportunities; given training in credit utilization, enterprise development and organizational techniques; mobilized local resources and set up a rural employment fund to operate a micro-credit programme; provided skills development training and follow-up; and trained government officials to plan, implement and monitor employment promotion schemes.

85. The project’s success could be measured by the number of micro-credit loans disbursed, the amount disbursed in other loans and the number of people trained and employed with its support.

86. Among the lessons already learned was the need to diversify the businesses targeted so as to develop a wider range of micro-enterprises offering greater employment opportunities to the poor. Micro-entrepreneurs returning from urban areas with new skills and understanding of markets were prime candidates for start-ups and could create vast employment opportunities in rural areas.

87. A second example of ILO technical cooperation in Asia was discussed by the Chief Technical Adviser of the ILO/SIDA project Start/Improve Your Business in Viet Nam (SIYB). The project supported the Vietnam Chamber of Commerce and Industry (VCCI) in its efforts to extend its services to the small enterprise sector. Financed by the Swedish development agency SIDA, the ILO provided technical assistance to deliver high-quality business development services to managers and small business owners.

88. The project (i) worked with a diverse range of partner organizations, (ii) developed training material relevant to the Vietnamese situation in light of international and local practice, (iii) used modern communications technology such as the Internet and compact disks (CDs) in all its activities, (iv) developed strategic alliances with credit institutions, government organizations and other enterprise development practitioners, (v) responded to local needs and opportunities, and (vi) maintained linkages with other ILO projects and programmes in other countries.

89. Though the project had not yet been running for a full year, there was already evidence of an impact. Its training workshops were highly valued and partner organizations were already delivering start-your-business (SYB) workshops to entrepreneurs. As a result, it was likely that the project target of training 4,500 entrepreneurs within three years would be attained

90. The VCCI and partner organizations welcomed the training of staff to manage the national SIYB programme and conduct SIYB workshops. Important new materials and resources had also been developed, including new small business training and resource materials, a national database and publications compiling advice for entrepreneurs, etc. The project had put up a bilingual website to make information and resources available to partner organizations. A national network of partner organizations involved in small enterprise development had been set up with linkages to national credit schemes, all to the benefit of the VCCI’s position as an advocate of the small enterprise sector. The project had shown how the creation of more and better jobs could help resolve problems left over from the Asian financial crisis.

Women’s entrepreneurship

91. Chaired by Ms Chen Ying, Deputy Director-General, China Enterprise Directors’ Association, an open session on women’s entrepreneurship heard an ILO expert review the challenges facing women entrepreneurs in the region. Their position was weaker than men’s when it came to bargaining. There were also legislative barriers concerning inheritance and property rights, bargaining in the labour market, market restrictions, inadequate infrastructure, difficulties obtaining credit, lack of gender awareness and sensitivity and pressures within the family.

92. Women entrepreneurs from Bangladesh (Ms Rokia Rahman), Indonesia (Ms Suryani Sf. Motik) and Nepal (Ms Shyam Batan Shresta) discussed the challenges they had to overcome. In Bangladesh, the most widespread problem was gaining access to credit. That was also true in Indonesia, where the formal banking sector was generally male-dominated. In Nepal patience and endurance were required to become a woman entrepreneur.

93. Women entrepreneurs from China (Ms Ximan Yu), the Philippines (Ms Grace Abella) and Thailand (Ms Sumontha Tonvongal and Ms Champhorn Phisanbut) made statements in the light of their own experience. Ms. Yu explained how expanding business activities in China could benefit women. Ms Abella pointed out that women-owned businesses in the Philippines were still confined to the small and medium-sized category. She suggested that this could be changed by promoting women role models. Ms Tonvongal and Ms Phisanbut discussed the increasingly prominent role played by women executives in Thailand despite all the obstacles.

Closing session

94. The participants approved a statement of common understanding framed in three working groups.

95. Speaking on behalf of the ministers responsible for labour, Mr Ying Lun Fung said that globalization coupled with the Asian economic crisis had provided new challenges to bring about recovery, reduce high unemployment and balance social equity and economic growth as well as opportunities to review our potential and identify weaknesses, cooperate with social partners and broader society and make necessary adjustments. The inputs from experts and group work on human resource management, corporate citizenship and small enterprise development would help the participants to meet these challenges. He and others in the Government considered their major role was to create an environment conducive to economic growth and social development, thus, would strive to remove red-tape and provide support services for enterprise development, human resource management and corporate citizenship. The Government would play the role of a facilitator, motivator and catalyst.

96. In human resource management, they were committed to promoting effective labour-management communication, joint consultation and voluntary negotiation at the enterprise level. At the industry and national levels, they would promote and facilitate the establishment of tripartite consultation mechanisms. It was important for the Government to provide guidelines and information on best practices and logistical support to the social partners. Long-term strategies of education and training, focusing on the development of competencies, life-long learning and retraining, needed to be developed. The Governments role in human resource development was to provide an overall policy and framework and ensure the quality of skills standards and training providers. They should collaborate with social partners to identify changes in labour markets and skill requirements.

97. The high unemployment and underemployment caused by the crisis required that the Governments should review and improve their social security system. He stressed that it was necessary for each nation to consider their stages of political, economic and social conditions in formulating their economic and social policies. Only through partnerships involving the Government, private enterprises, employers associations, workers organizations and other civil partners could long-term economic and social development be sustained.

98. Mr S. Talwar, speaking on behalf of the ministries responsible for enterprise development, said that there was a greater emphasis then before on economic reforms, liberalization and deregulation today. Large enterprises, SMEs and state-owned enterprises were encouraged to adopt new human resource management practices that balanced the interests of employees and enterprises and showed commitment to all stakeholders.

99. In corporate citizenship Governments could take the lead by establishing sound practices through state-owned enterprises and extended social benefits. There were instances of large private enterprises contributing to enterprise development and social partnership through community-related activities. Enterprises increasingly realized that the community at large was the ultimate stakeholder and that islands of prosperity would not survive in the midst of grinding poverty. The practices needed to be more widely replicated.

100. SMEs had acquired a crucial place in the socio-economic development due to their employment potential, which would be even more relevant in the context of liberalization, privatization and globalization resulting in unemployment. It was necessary for the Government to develop policies and initiatives such as duty and tax concessions, priority sector lending, financial subsidies and grants, support for modernization and quality upgrading, training facilities. They also needed to intensify programmes to develop infrastructure and entrepreneurship for small-scale industries, self-employment and micro-enterprises. The ILO could play a catalytic role by organizing SME business development programmes, maintaining data for technological developments and market information. A regional round table meeting on privatization would be useful in this regard.

101. The most important obligations for enterprises were maintaining good community relations, a human-centered approach, and by ensuring ethical conduct. Increased attention needed to be placed on massive retraining programmes for upgrading the quality of human resources and employment generation.

102. Mr Steven Kates, on behalf of the Employers, said that the meeting had dealt with issues central to improving the living standards of workers and their families across the world, and the way in which we conducted our affairs through better national and international institutions.

103. Human resources management provided the means for ensuring that workers were productive within their own places of work, while also, to the greatest extent possible, contributing to the overall goals of the enterprise. We were trying to produce a better world in which we could all enjoy rising prosperity and greater personal freedom.

104. Generally, employers aim to exceed basic legislative requirements and be good corporate citizens as part of their basic philosophy. The excellent and admirable example provided by Mr Tateisi was not an unusual one.

105. The last topic for discussion by the meeting had been small business in relation to quality job creation, and also, importantly, gender equality. In a purely economic sense, women, representing half the world’s ability and talent, must be given the opportunity to contribute to productivity, but moreover, their personal aspirations need to be met. It was therefore now recognized that women should be encouraged to participate in all areas. As discussed in the meeting, part of the very concept of gender equality was the leadership role of women as entrepreneurs owning their businesses as well as managing businesses owned by others.

106. He hoped that the texts they had helped develop would be used to further develop policies which could create the prosperity and freedom which the ILO had been designed to promote.

107. Mr Abdul Halim Mansor, speaking on behalf of the Workers , was pleased to see that the statement of common understanding reflected the role trade union organizations could and should play in human resource management and development. It was in the interest of all partners that trade union organizations be involved in human resources management at enterprise, industry and national levelsA recent scientific report had found that increases in productivity in labour productivity in unionized workplaces was almost double compared to non-unionized workplaces. He suggested that the ILO should collect such studies to be used as resource materials for future discussions.

108. He concluded that this meeting and its results would place a higher priority on human resource development and management on the trade union agenda.

109. The Director of the ILO’s Enterprise and Cooperative Development Department said that they had learned much from the Round Table. He was convinced that the whole learning process would be useful in guiding future work on policy development with regard to enterprise and society partnerships at national, institutional and enterprise levels.

110. The dramatic experiences of spectacular growth over two decades and the sudden economic crisis in the region should be shared by policy makers around the world and new methods of globalization had to be explored

111. The Regional Director of the ILO’s Asia Pacific region pointed out that enterprise promotion was a central component of the ILO’s. The aim was not only to produce viable and sustainable enterprises but also to raise living standards and permit personal fulfillment. She assured that Round Table its thinking would provide valuable guidance as the ILO worked towards the four strategic objectives set by the Director-General.

112. She closed the meeting by quoting a vision of business in the 21st century articulated by Mr Tateisi. He foresaw a new management style committed to human values, industrial relations, a balance between efficiency and creativity, and concern for community and the global environment. In short, the pursuit of social goals as vigorously as profits.

Updated by TN. Approved by BW. Last update: 31 May 2000.

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