SEVENTH ITEM ON THE AGENDA

Reports of the Programme, Financial
and Administrative Committee

Programme and Budget proposals for 1998-99:

Introductory paragraphs

General discussion of the programme and budget proposals

Discussion of individual programmes by major group

1. General management and meetings (including the Conference, the Governing Body, regional meetings and sectoral meetings), shown under major programmes 10, 20, 30, 40 and 100
2. The technical major programmes and those concerning employers' and workers' activities (major programmes 50-145 inclusive, 225 and 230, but excluding major programme 100 concerning sectoral activities)
3. The regional programmes and the active partnership policy (major programmes 245-280)
4. Administrative and support services (major programmes 160-220, 235, 240)
5. Other programmes (major programmes 290-296 inclusive)

1. The Programme, Financial and Administrative Committee of the Governing Body met from 11 to 13 March and on 21 March 1997 under the chairmanship of Mr. Arrate Mac Niven, Chairman of the Governing Body, assisted by Mr. J.-J. Oechslin and Mr. W. Brett, respectively Employer Vice-Chairman and Worker Vice-Chairman of the Governing Body. Mr. Gray (Workers' spokesman) was the Reporter.

2. The Committee had before it the Director-General's Programme and Budget proposals for 1998-99.⁽¹⁾ The proposals comprised a preface by the Director-General; an introduction; summary tables giving the proposed expenditure by major programme in US dollars; regular budget expenditure estimates and an analysis of increases and decreases by major programme; the draft budget of expenditure and income; programme descriptions and estimates by major programme; and a number of information annexes.

3. The Committee's discussion was opened by the Director-General, who introduced his proposals. His statement is reproduced in Appendix I.

4. After a recess, the Committee began its discussion of the programme and budget proposals.

5. Mr. Oechslin, speaking on behalf of the Employer members, stated that there were two possible approaches to this discussion of the budget. One consisted of focusing on the aspect of the amount of resources allocated under the budget, which obviously represented a burden for member States. This was the approach usually taken by Governments; the Employers were attentively awaiting their interventions on this subject, and asked them to take all the relevant factors into account, including the positive effect that a more favourable exchange rate would have on the problems relating to the Organization's budgetary resources. The Employers did not expect Governments to be generally enthusiastic about a substantial increase in the budget, but they considered that a distinction should be made between cutting back expenditure that did not affect the structure of programmes and resource reductions that could not but result in the restructuring of programmes. If the latter type of reduction were to be made, the Employers requested the Government representatives envisaging them to help identify activities with a lower priority, and they pointed out that this could only be done following a policy decision taken by the Governing Body as a whole. For their part, the Employers were not unaware of the importance of these financial and global problems, but they considered that their responsibilities had to do with ensuring that the activities proposed reflected the requests formulated by the members of the Governing Body during the preliminary discussions, and by their group in particular, and with the proposed means of solving existing problems.

6. As regards the general orientation of the programmes, the Employers congratulated the Director-General for his innovative presentation. They noted that the Director-General had very cleverly presented the proposed activities in a number of "boxes", but they considered that a close look should be taken at the content of these "boxes". In the case of the heading "Democracy", the Employers wondered whether the content really matched the label. Reference was made to fundamental workers' rights, labour relations and the development of employers' and workers' organizations. But the title "Democracy" should not evoke activities of a political nature that were not part of the ILO's mandate.

7. The Employers had noted that the document made numerous references to a philosophy of consensus perceived as a prerequisite for a given reform. They saw consensus as a desirable goal, but obviously conflict was part of social life and the problem facing everyone playing an active role in social life was that of conflict resolution. In the Employers' view, it would be regrettable if consensus were to become a means of blocking necessary decisions, and they recalled that the term "democracy" referred in normal usage to a system based not on consensus, but on majority rule.

8. The Employers attached the utmost importance to one of the components of the programme, namely the area of fundamental workers' rights in the context of the follow-up to the Copenhagen Summit and to the Singapore Conference. Since the means of strengthening the ILO's activities in the area of fundamental workers' rights would be discussed at the next meeting of the Committee on Legal Issues and International Labour Standards, the speaker would not take up this subject, but he wished to express the Employers' concern here. Under the heading "Fundamental workers' rights", the ILO had listed the principles laid down in seven core Conventions for which special means of action were envisaged. The Employers considered that the utmost care had to be taken when referring to fundamental workers' rights not to link them -- as had been done on several occasions in the document -- to Conventions which were certainly important, but which had not been included for the time being in this concept, for example those on migrant workers or indigenous peoples, which did not concern fundamental workers' rights as defined by the ILO. The Employers therefore requested the Director-General and his staff to pay the strictest attention to precision in the use of these terms.

9. The Employers wholeheartedly supported the orientations concerning the renewal of standard-setting activity, which they felt should truly be a major focus of the Organization's action and reflection during the coming biennium. They also wholly supported the orientations concerning the fight against child labour, which certainly came under the heading of protection of fundamental workers' rights, and the Employers' group was very strongly committed to this, irrespective of the area of ILO activity under which it might fall.

10. There was a heading dealing with assistance to employers' and workers' organizations. This was another area to which the Employers attached the utmost importance. The branches responsible for these activities in the Office should have the necessary resources, and the Employers noted that there was still a serious imbalance between the resources available to the branches responsible for assisting the activities of workers' organizations and those supporting employers' organizations. The role of the latter was not confined to labour relations, as it had been in the distant past, or even to technical cooperation, as was increasingly the case, but was also a means of ensuring that employers' concerns were incorporated more and more in the activities of the Office.

11. As regards the promotion of employment and the fight against poverty through job creation, the Employers considered that this was a priority area. They noted that 63.49 per cent of extra-budgetary resources had been allocated to this programme. This showed that external contributions were made only in response to specific requests, and that member States were very interested in this type of programme.

12. During the preliminary consultation on the programme and budget proposals the Employers had assigned a central priority to employment-generating enterprises. They had stated that not only was this their main priority, but that their attitude to the budget would depend on the weight given to this priority. Having examined programmes 60 and 65 to see whether they reflected their request for a consistent and integrated programme on employment-generating enterprises, the Employers had mixed feelings. This dimension of the ILO's activity was not included among the four challenges mentioned by the Director-General for the coming biennium, but it could be considered to be implied in the reference to the Copenhagen Summit, and it was true that the programme and budget contained a large number of ambitious and interesting action programmes in this area, in particular the action programme on small and medium-sized enterprise development for employment. The Employers congratulated the Office on the creation of this action programme. They would consider ways in which they could help implement it, but were concerned at the fact that the department responsible for this programme and some others had not been allocated many new resources. It was also possible to seek external resources, but there was a great deal of competition and it was difficult to convince donors without putting up the initial capital. The Employers also wished to see this programme incorporated in other ILO activities which should take account of the needs of enterprises. This was not always the case, for example with regard to the social security programme, to which the speaker would refer in greater detail later on during the discussions.

13. The speaker now turned to the subject of the means of implementing these programmes. The main means at the Organization's disposal, without which nothing could be done, was obviously its staff. The Director-General often spoke of centres of excellence. Whether these were a goal or a reality, or a little of both, the Employers considered that the programme as a whole depended on the professional quality of men and women, and that the experience of outside specialists was an important input. The ILO should therefore increasingly come down from its ivory tower and attract qualified persons from the outside as far as was possible in a situation of budgetary constraints that heavily reduced the scope for recruiting new staff. This was yet another reason to be selective and to base recruitment entirely on quality. According to the Employers, the selection procedures in the Office did not facilitate these choices. In their view, it was essential for the Office selection procedure to be more open so as to ensure that the sole consideration taken into account was the quality of staff.

14. As to the extent to which the programmes reflected realities, the Employers considered that the Office had an effective procedure for auditing expenditure. What was lacking was the means of checking on the effectiveness of its activities, not in terms of expenditure, but in terms of results, i.e. the outcome of programmes. Obviously, it was not easy to quantify the results of the ILO's activities as if the Organization were a production enterprise where a sales analysis could be carried out. But a way had to be found to assess the impact of ILO programmes on the real situation and on the ground. Such an analysis would be difficult to carry out because of the large number of programmes and the impossibility of evaluating the impact of each of them. But the Employers felt that a survey method could be found to assess the effect of a given programme, for example by evaluating the number of new enterprises created or the improvement in the level of workers' protection achieved by means of a health and safety activity.

15. In the Employers' view, an analysis of the impact of programmes could be carried out first of all through a more operational role of the Governing Body's Committee on Technical Cooperation, which should engage less in a general overview of the problems and focus more on a few topics, selected not on the basis of best results but rather of those that were less good, so as to give the Governing Body an almost physical familiarity with the outcome of a project's implementation. Moreover, such an analysis should draw on another method proposed under various programmes, namely country studies, which enabled the Office to zero in on a given situation. They had been mentioned in connection with fundamental rights and employment, and the Employers considered that this method had immense potential and in specific cases would make it possible to assess the effect of ratification of Conventions or of a cooperation programme.

16. Along the same lines, the Employers considered that the ILO should be increasingly close to its constituents. They found that the experience of the multidisciplinary teams had been satisfactory on the whole, albeit with mixed results, like any human enterprise. They were also satisfied with the experience as regards the role of employer advisers on these teams; it was good for these advisers to participate not only in their own programmes but in the joint management of programmes, but perhaps it took a little too much of their time and a balance should be found. Sectoral activities were also of great importance to the Employers, for they also kept the ILO in touch with reality. The Employers felt that meetings were not an end in themselves, and that the Organization should keep in touch with the reality of the branches of industry, since this was where industrial activity took place.

17. In conclusion, the speaker pointed out a newly tested means of putting the Organization in touch with the outside world, namely the creation of forums. There had been the Enterprise Forum, which had been widely discussed, and two types of forum were envisaged in the programme and budget proposals. The Employers considered that it was a good idea to venture outside the traditional framework of the Organization's activities and that the concept lent itself both to enterprise issues and to other areas.

18. Mr. Gray, on behalf of the Worker members, noted that the proposals before the PFAC had already been the subject of two preliminary consultations, and that the format and much of the content bore a considerable resemblance to the programme and budget adopted two years ago. While the Director-General had chosen to place his proposals in the context of ongoing reform, for the Worker members, the dominant impression was one of continuity. Little restructuring was being proposed in Geneva and the most significant and positive proposal made by the Director-General in November, concerning enterprise activities, had disappeared completely from the final document. There were important changes on the table in respect of field structures which the Workers could, by and large, approve but these too had been toned down compared with last November.

19. Nevertheless, the Director-General did speak of revolutionary innovation, if only in respect of information technology applications. For the Workers, the really revolutionary proposal was in fact the size of the budget, which while not unexpected was not welcome. The Workers had already supported the new procedural process which had led to the present debate, and most particularly the extra debate last November. While considerable consensus had already been achieved, the Worker members could not accept that this meant that everything had now been agreed upon, and that the current discussion was either purely decorative, or of only marginal importance. On the contrary, it could, and should make a difference, and this comment was made with vivid recollection of the painful experience of previous biennia. The Workers had major problems with some aspects of the proposals, but had concrete suggestions to address them which he expected would be considered seriously.

20. The Worker members had no argument with the three major objectives identified by the Director-General (democracy and fundamental workers' rights, promoting employment and fighting poverty, and protecting working people) which were in fact the same objectives as for the current biennium. Nor was there any disagreement on the three strategic orientations identified (considering the ILO as a centre of excellence, a focus for workers' rights and providing a service to constituents). These were points on which he believed a consensus already existed. There were, however, serious difficulties in respect of the disproportion between the activities proposed in pursuit of each of the major objectives, and this was compounded by the flagrant imbalance within the activities devoted to one of these objectives, employment and poverty. Figures provided by the Office illustrated this point. Of the resources that the ILO estimated were allocated to the three major objectives, 41 per cent had been allocated to the promotion of employment, with 32 per cent going to democracy and human rights, and just 27 per cent to protection of workers. These were telling figures, made even greater when the estimates of extra-budgetary allocations were taken into account. Programmes 65, 60 and 125 were, in that order, the three biggest recipients and alone accounted for 60 per cent of the predicted income. At this stage, the employment major objective ceased to be a distant first among equals and became overwhelmingly predominant. Of a total of approximately US$519 million, 49 per cent was devoted to the promotion of employment, more than double the amount allocated to either democracy and human rights or to the protection of workers. The Worker members were aware that this situation was not altogether new. Two years ago, the Director-General had already said that he attributed the highest priority to employment, considering that this was the common denominator in the 75th anniversary Conference debate on the future of the Organization. The Workers had no intention of opposing the employment major objective, but it should not be pursued to the detriment or exclusion of the others, and there was good reason to fear that this was the direction upon which the ILO was set. Moreover, the members' views in this regard were closely linked to their strong concerns about the manner in which the employment objective had been addressed.

21. Referring to the need for a balanced approach on employment, Mr. Gray noted that the Workers had already accepted the value of a diversified approach to employment promotion. It should encompass action at both the international and the national policy level and the macro and micro levels, as well as including an ILO enterprise policy which was truly tripartite in character. The problem with the Director-General's proposals was that they drastically downgraded the international and macro policy aspects and concentrated unduly on other areas which were, of course, important but which needed to be dealt with within a balanced overall context. The proposals contained a large body of activities devoted to enterprises which made little effort to even acknowledge worker concerns or integrate a tripartite perspective. This was an area in which the ILO was going backwards rather fast. In his preface, the Director-General said that the ILO had redefined its strategy to take up at the international level the social issues attendant upon globalization and that in so doing, it had "made its voice heard, and so provided further proof of its relevance". To a great extent, the Worker members agreed with this assessment of past achievement. However, rather than building upon what had been achieved, the proposals in this area appeared to reflect a feeling that enough had been done, and that it was time for the ILO to pass on to other issues. Some of these appeared to be "safe" options, but they would hardly contribute to the ILO's visibility, standing and influence in international employment policy questions. The ILO should not abandon ground it had gained in this area, particularly in connection with the Copenhagen Summit process.

22. Two specific examples illustrated the problem. Two years ago, the Director-General described the objective of the new World Employment Report series as being "to lend the ILO a new authority in discussions of employment policy at international and national levels, and in particular in discussion with the Bretton Woods institutions and the new World Trade Organization". The Workers' group took the view that the first two editions had indeed met that purpose. By contrast it was simply not credible to pretend that the choice of "training" for the third edition could do so. Training was an important issue to which very extensive attention was given in the programme and budget proposals, but it was ill-suited as a theme for the report. He therefore proposed that an alternative subject be chosen; specific suggestions would be made in later discussions.

23. The Director-General would no doubt point to the inclusion of an action programme addressing globalization in programme 60 as evidence that his proposals did address the concern of the Workers' group. But looked at carefully, it became clear that the action programme "Globalization, area-based enterprise development and employment" (paragraph 60.18) had in fact nothing to do with globalization, and everything to do with enterprise development. Not only was it in the wrong major programme but it was a reflection of the fact that there was little substance in the proposals on globalization and international employment policy, notwithstanding the form of their presentation. Consequently, the Worker members would push for a more concrete, proactive approach to relations with other international organizations, notably the Bretton Woods institutions than what was reflected in the Director-General's proposals. In this regard, due note should be taken of the signing in recent months of cooperation agreements between the WTO and the IMF and between the WTO and the World Bank. The ILO now had to assert its role or run the risk of marginalization. The Worker members could not accept that the proposals before it in respect of the ILO's approach to enterprises constituted an acceptable ILO policy on enterprises. The first difficulty was the most obvious one of relative size. When regular and extra-budgetary funding was added together, major programme 65, which was the core (but only the core) of activities on enterprises, was the biggest substantive technical programme, just ahead of major programme 60, and well ahead of all the rest. Spending on enterprise and cooperative development was 282 per cent of spending on standards. If the regional programmes were brought into the picture, the gap would probably be much wider. This imbalance could have no justification. Nor should it be forgotten that a wholly separate major programme, programme 85, dealt specifically with multinational enterprises and social policy. By contrast with the situation for major programme 65, resources here were less than substantial and the activities they allowed were wholly inadequate. The Worker members would challenge the Director-General (or anybody else) to explain why, in this period of accelerating globalization, the ILO would find it reasonable or logical to spend 50 times as much on enterprise and cooperative development than it did on multinationals and social policy.

24. Of the 16 action programmes proposed, three were under major programme 65, while two others, which were clearly enterprise-centred activities, were located, wrongly in the view of the Worker members, in other major programmes (programmes 60 and 90). Five enterprise action programmes out of 16 was unreasonable, particularly in view of the additional relevance of other action programmes to enterprises. The Workers' dissatisfaction in this area was all the stronger in view of the important and innovative proposals which the Director-General had made in his November consultative document. Then he had proposed the integration of MULTI into ENTERPRISE as a distinct branch with a new mandate, task and means of action and improved and expanded activities, which would have included the role of a think-tank on the social role of enterprises. These proposals were particularly welcomed by the Worker members as a way of injecting balance and tripartite perspective into the enterprise major programme and having it address the social and international implications of enterprise activities which it had previously failed to address. Why then had this initiative been abandoned? One clue was to be found in the illogical exiling of the action programme on social initiatives by enterprises to the working conditions and environment major programme where it self evidently did not belong. This was evidence of an attitude which held that major programme 65 related to entrepreneurship, management and enterprise development, productivity and nothing else. Was there no place in it for social or international perspectives on enterprise behaviour? It was damaging to the ILO's credibility to take this approach which, for ideological reasons, placed overwhelming emphasis on one aspect of enterprises which should not in any case be the ILO's primary concern, while making a taboo of others. For all these reasons, the Worker members made a strong call for a restructuring of ENTERPRISE on the basis of the Director-General's announced intention last November.

25. Turning to the action programmes, there had as yet been no opportunity to evaluate the programmes under way this biennium, but from a conceptual viewpoint, they were to be welcomed. One of their advantages was that they gave the PFAC a real scope to influence the content of the programme and budget through the selection of a number of action programmes from an extensive menu of options. That process was what made last November's debate valuable. However, the Workers were not happy with the outcome of that process as they felt that their views and preferences had not been taken properly into account, or that the resultant list of 16 action programmes was acceptable. There were 12 proposed action programmes which they could agree to, and which they did not believe, on the basis of views expressed in November, were controversial. These were: labour market information systems; tripartite participation and social dialogue on training; social investments: job creation through innovative financial instruments; cooperative approaches to collective bargaining; the contribution of industrial relations to regional economic integration; organization and management of labour administration; social initiatives by enterprises; safety culture; action against extreme forms of child labour; an operational framework for pension reform; strategies to combat youth marginalization and unemployment; and improving the quality of women's employment. Assuming that the number of action programmes was to be 16, which was one more than the maximum indicated in November, that left four programmes to be defined.

26. In November 1995, the Worker members said that they could support "Globalization and enterprise development and employment", but only if it was reworked so that it actually addressed the question of globalization and enterprise location. Similar comments were made concerning the action programme "Productivity improvement, competitivity and quality jobs in least developed countries" where the Workers wanted to see a broader approach. In neither case had these suggestions been taken up. Indeed, in the second, changes had been in the opposite direction and the reference to least developed countries had gone altogether. For obvious reasons, the proposals on small and medium enterprise development for employment did not figure among the Worker members' priorities. Consequently, the Workers would again table the five alternative proposals that had been introduced in November and which, again, had not been taken up. These were the promotion of the fundamental human rights Conventions; international arrangements for worker representation in multinational enterprises; tripartite participation in structural adjustment programmes; new approaches to preventing mistreatment of and discrimination against migrant workers; and the social effects of liberalization of international trade.

27. Referring to the balance of operational programmes between headquarters and the field, the Worker members noted that the Director-General's proposals provided for a continuation of the flow of staff and financial resources from Geneva to the field. The chart after paragraph 90 of the introduction to the programme and budget proposals clearly showed that from 1990 to 1999, the percentage of ILO staff working from Geneva would have decreased from 70 to 59 per cent. A central element in this was the proposal to transfer 20 per cent of headquarters RBTC resources to regional programmes. This however raised a number of questions. The transfer of resources from Geneva to the field was unquestioningly assumed to be a good thing. But did the Director-General have an idea of the point at which it would come to an end? What was the ideal headquarters-field mix? This question should be approached not from a purely financial point of view, but also with a view to maximizing the effectiveness of the ILO as a whole. The Workers had always insisted that the ILO should not only be a centre of technical excellence, but also that its headquarters in Geneva needed to maintain a critical weight of expertise and resources. Without a fully operative brain in Geneva, the ILO's extremities in the regions could not behave intelligently or coherently.

28. A related concern was that headquarters should continue to exercise proper authority, guidance and control over what was done in the field. The idea of a service-providing, demand-driven organization did not absolve ILO management from ensuring that priorities, policies and orientations set down by the Organization's elected political organs were faithfully reflected by activities outside Geneva. The ILO had to remain a single united global organization, not a loose federation of 14 little ILOs (soon to become 16) spread out around the world. For this to be a reality required the MDTs to seek guidance from Geneva when it was needed, and for Geneva to be in a position to respond adequately. This interaction needed also to ensure that the link between technical cooperation and standards which was at the origins of active partnership was made a reality. These considerations reflected the importance which the Worker members attached to the evaluation of the policy of active partnership to be undertaken this year. While the evaluation itself fell beyond the scope of the current debate, its findings would certainly have to be acted upon in the 1998-99 biennium. But perhaps the most critical issue in respect of field activity touched directly upon fundamental considerations of political authority. Put simply, as resources shifted from Geneva to the field they tended to pass beyond the field of vision of the Governing Body. The regional programmes did give general indications of priorities which in a large part duplicated the ILO's global priorities. The Technical Cooperation Committee received annual reports on activities, and the Director-General presented his biennial activities report to the Conference. Nevertheless, the Workers were insistent that the Governing Body needed to have further means at its disposal to monitor the use of technical cooperation funds in the region in a manner which enabled it to discharge its political responsibilities adequately. This point was made with constructive intent, and the Workers would be happy to open dialogue with the Director-General on how these genuine concerns could be met. It was the Workers' understanding that the MERS system might be a useful tool in this regard, as in others.

29. The very limited extent of restructuring, at least in Geneva, meant that the resource movements shown in the Director-General's proposals gave a more than usually clear picture of substantive programme changes. In the context of a significantly reduced budget, the broad trends were that major savings, 12.3 per cent from reform of policy-making organs and 4.7 per cent from service and support activities had been used to reduce or eliminate cuts in substantive and operational activities in Geneva and the field. This was the right approach if global cuts could not be avoided, but the Organization had to take great care never to damage the work of its political decision-making process. The Workers acknowledged, also, the serious effort made to make savings in service and support activities where the sole imperative was to provide adequate services as cheaply as possible.

30. At individual major programme level, the 21 per cent reductions in the publication programme and in the sectoral activities programme were basically the consequence of decisions already taken, but they were not developments which the Workers easily accepted. In this regard, the Worker members underlined the great importance they continued to attach to sectoral activities as a critically important interface between the ILO and its constituents. Reduction in major programme 100 would make it all the more important that other programmes cooperate with it, integrating sectoral activities into their own work.

31. On the other hand, there were a number of areas of key importance where the Director-General proposed important resource increases. The most notable were for women where there was an increase of labour of 33 per cent and for industrial relations and for child labour where resources were more than doubled. These met with the full support of the Worker members.

32. The Director-General was to be commended for his ambition in promising "something of a revolution" in the field of information services. His proposals gave reason to believe that the ILO was doing well in riding the crest of the information technology revolution. The dividend should be seen not only in terms of improved internal office communications and efficiency, which was important, but also in a quantitative leap forward in services to constituents. That was evidently the intention, and the Workers would simply underline the importance of tailoring user-friendly information products to constituent needs and to helping ensure that constituents' capacity to absorb and use such services were enhanced. ACTRAV would certainly have a role to play in the latter endeavour.

33. Referring to the size of budget proposed by the Director-General, the Worker members noted that the budget implied a real cut of 3.75 per cent as compared to the one originally adopted for the current biennium, i.e. before the US$21.7 million cuts were made in November 1995. When allowance was made for inflation, the proposed budget amounted to approximately US$569 million, costed at the 1996-97 budget rate of exchange, some US$10.4 million less than the approved budget for the current biennium. The budgeted cost inflation factor, just 2.02 per cent, was historically low and had to be acknowledged as a major and hopefully not unrealistic effort made by the Director-General. However, the Swiss franc/US dollar exchange rate was now a long way away from the 1996-97 budgeted exchange rate of Sfr.1.16 to the US dollar. This effectively meant that the dollar denominated value of the budget went down as the dollar went up against the franc. To give an idea, the Office calculated that at an exchange rate of Sfr.1.43 to US$1 the proposed budget would drop to some US$469.7 million, which represented a real dollar decrease of 14.3 per cent.

34. The Worker members would recall that the financial problems of the recent past were made critical by the then low value of the dollar. Many governments made that circumstance the central plank of their demands for the programme cuts which were agreed at the end of 1995. To be consistent, they should recognize that the radically changed situation today meant that their pressing financial concerns had been eased, and that the ILO should revert to a zero real growth programme and budget as compared with the one originally approved for 1996-97. The graph in Annex 10 which showed a real programme decline of 13.2 per cent from 1978 to 1999 if the Director-General's current proposals were accepted in their entirety, had to be set against the growing demands of an organization whose membership had increased from 148 to 174 in the last six years. The Worker members had no shortage of suggestions as to how the restored resources could be spent.

35. The representative of the Government of Canada, speaking on behalf of the industrialized market economy countries (IMEC) expressed her appreciation for the presentation and introductory comments made by the Director-General. The additional information had greatly assisted in a more thorough understanding of the programme and budget proposals and she encouraged the Director-General to continue to present information in this user-friendly manner. She also supported the strategic orientation and priorities identified by the Director-General and noted the new challenges and changes that would face the ILO in the coming biennium.

36. It was useful, however, in this context to clearly establish IMEC's understanding of the role of the programme and budget. For the Director-General and the Office, the document allowed for responsible financial and programme management with flexibility to meet new and emerging demands and demonstrated value for money and efficient programme delivery. The current document clearly satisfied this requirement. The Governing Body, however, needed a document that elaborated clearly the strategic thinking behind the proposed programme and budget. Such a document needed to show how broad policy directions and strategic objectives were translated into operational activities, and how the programme activities were presented so that results could be subsequently evaluated. On a broader level, a programme budget was a political and public relations document which showed constituents that the ILO was dealing with the right priorities and had allocated sufficient resources to them. The programme and budget in its current form did not entirely meet these needs. For example, the current international interest in child labour had deservedly riveted attention on the ILO. Yet in the budget document, it was extremely difficult to determine the specific level of resources allocated to this important issue or to ascertain readily if additional resources had been assigned to this programme. The complementary information provided yesterday by the Director-General on this topic was precisely the sort of information that was required and she encouraged the Director-General to apply this approach to other important programmes in the ILO's mandate.

37. Referring to the Director-General's presentation, she noted that in the coming biennia, the ILO faced a number of new and historic challenges. Yet the current programme and budget proposals were based on a continuation of the existing programme parameters and seemed to offer little real flexibility for activity adjustments should these be required. The Conference was due to discuss later in the year a number of key policy issues which could significantly affect the way in which the ILO operated. She noted forthcoming discussions on normative activities, the functioning of the Governing Body, the interim evaluation report of the 1996-97 programme and budget and the evaluation of the active partnership policy. It was therefore necessary to ensure that sufficient flexibility be built initially into programme proposals to allow for policy or programme adjustments if required before implementation of these programmes in the 1998-99 biennium.

38. Turning to the text of the current document, seven points should be noted: first, the document could be considerably shortened. A clear, concise overview of the context of the proposals in the introductory section should allow major programme descriptions to go directly to their objectives in order to save text in the overall document; second, there was unevenness in the statement of objectives, outputs and descriptions of specific activities. Some were crisp and informative, but others were repetitive; third, it was often difficult to distinguish between activities that had been continued from the previous biennium and new proposals. It was also unclear what evaluations had been carried out on activities, both in terms of their continuing relevance to the strategic orientations stated in the beginning of the document and to the efficiency of their delivery; fourth, it was difficult to distinguish between essential core activities, required to meet constitutional, legal and regulatory obligations, and discretionary spending items; fifth, the document gave no coherent overview of cross-cutting activities, especially related to research and technical cooperation. She reiterated IMEC's request of last November for a document setting out the ILO's research and dissemination strategy; sixth, the Office's management structure and costs were not clear from the document. In particular, there was considerable variation between the major programme descriptions of departmental management; and finally, there was scope for greater transparency in Information Annex No. 4A, Breakdown by appropriation line and by object of expenditure. For example did item 2, Travel on official business, include transport cost and per diems? Did contractual services include any personnel contracts? Were staff costs limited to salaries only? She emphasized, however, that IMEC countries fully supported the objectives outlined in major programme 200, namely to increase the efficiency and effectiveness of ILO services and she encouraged the Office to set a target for managers to attain efficiency savings. Such savings could be reallocated to provide maximum resources for other programme activities. Travel, contractual services and production and dissemination of documents were all areas where there may be scope for efficiency savings through policy guidance, streamlining and new technologies.

39. For all of these reasons IMEC countries did not feel they had sufficient understanding of the current programme and budget proposals. She requested that, during the detailed review on major programmes, it would be helpful if the following information could be provided by the Office: for general management and meetings (programmes 10, 20, 30, 40 and 100), she requested an estimate of full costs derived from attributed costs from other major programmes, such as major programmes 180 and 220. In addition, the overall cost of management should be included in programme 40. For those programmes outlined in section B (50-145, 225, 230, as well as programme 100), it would be helpful to know how the objectives of the programmes related to the three strategic orientations and proposals identified by the Director-General. It would be useful as well to have an estimate of the financial and staff resources that would be allocated to these priorities; how the level of resources allocated to these priority objectives had changed from the 1994-95 biennium to the current biennium and what would be the change for the next biennium; what were the core fixed costs in the programme and budget proposals (i.e. those costs relating to activities that were required from a legal or regulatory perspective) including an estimate of the financial and staff resources devoted to these activities; what activities had been terminated and what new activities had been planned for completion during the 1998-99 biennium. It would also be useful to have information on management structure and costs; and how the proposed research activities related to the three priority objectives; how had the proposals been identified, screened and quality checked in terms of subject and author and were they related to any other ongoing research activities or had they been identified in cooperation with other agencies? For the regional and active partnership programmes, programmes 245 to 280, she requested two additional points for information: firstly, how did the activities in these programmes relate to the three priority objectives identified by the Director-General, and secondly what was the real transfer of resources from these programmes to developing countries, in particular the poorest countries?

40. To ensure that the Conference discussions benefited from such additional information, this analysis should be contained in a strategic management document to be prepared for the Conference to be held in June this year. The document should aggregate information derived from the detailed discussions on major programmes. It should be concise, with much of the information presented in chart form, along the lines of the Director-General's programme and budget presentation. She stressed that this document was a one-time request to complement the 1998-99 programme and budget. In future biennia, a fuller and more extensive analysis in the form of a strategic programme and budget overview would be an integral, introductory part of the programme and budget proposals presented in March.

41. She proposed that the conclusions on the discussions of this programme and budget be reflected in an agreed Governing Body statement, and IMEC countries would consult with other groups in the Governing Body on the proposed text.

42. The representative of the Government of Austria praised the Office for the excellent work done in preparing the Programme and Budget proposals for 1998-99. The proposals were well balanced and comments made at earlier meetings had by and large been incorporated into the current document. The slight reduction in the level of the budget, while good for national finances was unfortunate when so many unresolved global problems required the expertise of the ILO.

43. He welcomed the measures taken in respect of management methods and Office rationalization aimed at generating additional savings but hoped that these measures would not lead to a reduction in personnel numbers in the Organization. Private industry rationalization methods were not always appropriate in an international environment. Additionally, these globalization and rationalization changes often had negative consequences for workers' rights and it was important for the ILO to remain vigilant and prepared for these changes and to offer technical solutions to constituents who required them. In all cases, it was imperative that basic human rights be preserved in the face of such changes.

44. Referring to the next United Nations Summit on Social Development due to be held in 1999, it was perhaps premature to be planning already to discuss the progress made on social issues, especially when restrictive austerity measures were currently imposed in many countries. The effectiveness of such a forum would depend on the composition of the meeting which clearly should include as many technically competent experts as possible and fewer Government representatives and general speakers making rhetorical statements. In conclusion, he expressed full support for the content of the individual programmes contained in the programme and budget proposals.

45. The representative of the Government of Sweden fully supported the statement made by the delegate of Canada on behalf of the IMEC countries. He noted that his delegation utilized four essential criteria for assessing budget proposals. Firstly, the budget proposal should indicate the overall long-term objectives of the Organization. Secondly, the budget document should indicate clearly the programme and subprogramme objectives and show how these objectives helped achieve the overall long-term objectives of the Organization. Third, and perhaps most importantly, the objectives established at the programme level should be clearly defined to allow constituents to more easily evaluate and monitor them. Fourthly, results achieved in previous periods should be made available in order to allow constituents to evaluate past experience with the current proposals. This could be done in the budget document itself or in a separate document provided there were transparent references between documents.

46. His delegation was satisfied that the budget document systematically made reference to objectives on major programmes as well as at programme and subprogramme level. There were also references to overall long-term objectives, however, these were often not specified to an extent which would allow a full assessment of the degree to which they had been met. On major programme level, the description of objectives was often simply a broader observance of certain principles or standards. Such descriptions may be acceptable as indications of the general direction of ILO's activities, but they were not acceptable as a statement of intended achievement during a specific budget period. On programme and subprogramme level the descriptions were somewhat more precise but still without time-limits or quantifications that would make it possible to assess to what extent the objectives had been met.

47. Successful strategic budgeting presupposed the existence of adequate internal management and reporting methods and systems and, while the Director-General and his staff were responsible for the management of the Organization, the Governing Body was responsible for overall planning and evaluation of the proposals. The prerequisite for such a system stipulated internal monitoring and evaluation procedures established by the Organization which were efficient and operable. At the same time, the system of reporting back to the Governing Body or member States had to be clearly defined and acceptable by them. If this was the case, then the demand for detail in the budget document could be lessened. He therefore welcomed the proposal to introduce a monitoring, evaluation and reporting system and a new budgetary and accounting system and added that any additional information on these new systems and the plans for their implementation would be appreciated.

48. In addition to establishing objectives, an important aspect of any budget proposal should be to set or indicate priorities. By clearly identifying priorities, the Organization improved the conditions for orderly cuts in expenditure and minimized their detrimental effects when such cuts were made necessary through a shortfall of income compared with the budget. In the present proposals, such clear identification of priorities was largely missing. The budget proposed by the Director-General contained an impressive and excellent description of on going activities and plans for the next biennium and he congratulated the Director-General and the Office for this. As a strategic tool and as an instrument for decision-making by the Governing Body however, the document left a lot to be desired. It would be very difficult to comment on these issues in detail without going into a micro-management discussion and he wished not to do this. In general terms he endorsed the overall budget level expressed in constant dollars contained in the Director-General's 1998-99 programme and budget proposals. An analysis of what was achieved with the money spent was a more important consideration than how much was spent in total and in that respect he reiterated his full confidence and trust in the competence of the Director-General and his staff. However, the level of regular budget expenditure had to be considered in the light of payments of assessed contributions in the current and the forthcoming budget periods. Should member States not pay their assessed contributions on time or in full, there may be a need to cover the deficit at least temporarily through the Working Capital Fund or through internal borrowing. There was also the possibility that certain programme activities would also need to be cut or scaled back. Since the possibility of cuts of budgeted expenditures could not be excluded, either during the current biennium or during the next, the principle of establishing clear priorities already in the budgeting phase was even more crucial in order to facilitate, however regrettable, any reduction in programme activities.

49. The representative of the Government of Malaysia congratulated the ILO for its commendable effort in preparing the budget proposals for 1998-99. His Government was pleased with the budget's substance and focus, and thought that its numerous innovative ideas would help the ILO achieve its objectives. It was heartening to note that the ILO intended to intensify its active partnership policy, which was most beneficial to member States: it took account of national objectives and aspirations, especially in the formulation and application of labour standards; it had promoted closer interaction between the ILO and its constituents; and it had strengthened tripartite consultation and cooperation at the national level.

50. In the field of industrial relations, the ILO's proposal to focus on cooperative rather than distributive bargaining was commendable. This would strengthen social dialogue amongst tripartite constituents and promote greater economic efficiency and social justice. Training was also crucial to reducing unemployment and improving productivity. The ILO's proposal to examine new ways of financing training would be beneficial to member States, while promoting private sector participation in training would help to meet the needs of developing economies. In this regard Malaysia had successfully integrated private sector participation in training and human resource development through the establishment of a Human Resource Development Fund.

51. The role of women in economic development had become increasingly important and the ILO's plan to embark upon a technical cooperation programme to promote better and more jobs for women and encourage greater equality of opportunity and treatment between men and women was highly commendable. The programme would help member States create productive employment for women, eradicate the poverty of disadvantaged women, and improve women's working conditions and their social protection.

52. Extreme forms of child labour was a problem that needed to be addressed effectively. That the ILO recognized this problem was evident in the increase in the amount of resources allocated to deal with it. The ILO's increased assistance to member States was welcome, as the problem of child labour could only be resolved through a continuous and consistent effort. The International Programme for the Elimination of Child Labour (IPEC) now covered more than 20 countries and there was every reason to be optimistic that it would make gradual headway in eliminating exploitative child labour through the strengthening of national capacities and the promotion of a worldwide movement against harmful child labour.

53. Finally, the ILO was to be congratulated on its efforts and reformative ideas for the promotion of social justice and universal improvement in workers' quality of life. His Government was convinced that the reforms proposed by the Director-General would make ILO activities more relevant and effective and ensure that it was a centre of excellence and reference on labour matters.

54. The representative of the Government of Mexico, speaking on behalf of the Americas group, thanked the Director-General for the presentation of his budget proposals for 1998-99 and the additional information he had presented in his summary. While progress had been made in the presentation of budgetary information along the lines requested by the Governing Body in March 1996 and outlined in Governing Body document GB.265/PFA/8/1, more changes were required. As a supplement to the traditional budget document, the Americas group wished to have a short, strategic document which would be structured according to the implementation of the ILO's objectives for the biennium. It should be approximately one-tenth of the size of the current programme and budget document, it should include a larger number of tables and graphs so that delegations could have clear, accessible information on the breakdown of expenditure by region, and on how much is spent in order to achieve strategic objectives, it should provide more detailed information on how much is spent on staff and administrative services and on technical cooperation projects, and it should clearly differentiate between the costs of the end product and the related costs required to obtain that product. The current programme and budget proposals did not give a sufficiently clear picture of the trends in the allocation of resources for programmes, nor a sufficiently clear explanation of why resources for particular programmes were increased or reduced. For example, in the regular budget for technical cooperation, as set out in Annex 7 of the programme and budget proposals, more than 75 per cent of the resources allocated to the Americas region was for the multidisciplinary teams, while 16 per cent was allocated to field projects. However, there was no clear information on how it was intended to spend these appropriations, nor was there an evaluation of their activities. Furthermore, there should be a breakdown of expenditure related to the reduction of resources for offices in comparison to the previous biennium, as it would be useful to know why the Americas region had the smallest increase of all the regions.

55. The Americas group was convinced that a strategic budget would help remove doubts about budget allocations. Moreover, it would have certain advantages: the Governing Body would be able to check that the majority of the budget was spent according to assigned priorities; it would help the Office to explain the flow of funds by illustrating the links between programmes and actual expenditure thereon; it could be used to evaluate results as a function of actual expenditure; it would facilitate the review of the provisions of programmes and their budgets; and it would provide a clear and detailed picture of the resources earmarked for MDT projects.

56. The Americas group would like to have a first draft of such a strategic budget as early as possible before the 85th Session of the International Labour Conference and a more complete version for the 270th Session of the Governing Body in November. As from 1999 a strategic budget should always accompany the programme and budget proposals.

57. The representative of the Government of Germany expressed his satisfaction with the current structure, and especially the annexes, of the programme and budget proposals, although he did support the statement made by the representative of the IMEC group that parts of it could be shortened without any loss of content. The Committee's familiarity with the present structure of the proposals made it easy to make comparisons with earlier budgets and ensure that ideas expressed in earlier sessions of the Committee had been taken into account. He also thanked the Director-General for his instructive presentation of the budget. These additional clarifications answered certain questions which had been asked by the representative of the IMEC group, and his Government asked that the Office, within the limits of what was feasible, provide the Committee with any information that would make it possible for it to establish what the ILO really considered to be priority areas, such as the promotion of women and child labour; this was not simply a question of looking at the figures and the major programmes, because many activities were spread over a number of different major programmes. This information would make it much easier to decide what could or could not be agreed to in the programme and budget proposals.

58. While it was true that the present programme and budget proposals did not contain any revolutionary reorganization, there were nevertheless some noteworthy emphases in the way the proposals were expressed. There was a tangible reduction in the cost of meetings as set out in major programmes 10, 20 and 30, which reflected decisions taken by the Governing Body and the Conference. The greatest increase was in major programme 140 on equality for women and in programmes to combat child labour. The Director-General's presentation had made this much clearer than had been apparent in the programme and budget proposals.

59. His Government appreciated that the budget was based on nominal zero growth. There were always difficulties when spending public money; and although in this case it was spent internationally, it still came from national budgets. However, the budget did include compensation for inflation. Other international organizations seemed to get by without this provision and the ILO should do likewise. It was possible, therefore, that at the end of the debate, there would be a shortfall of about $11 million. Where could it come from? Half of the appropriations for travel costs amounted to $11 million and although, according to Annex 4B, the proportion of the budget for travel costs had fallen from 4.2 per cent to 3.9 per cent, ILO officials (and this was the case for other organizations too) travelled too much.

60. It would be worthwhile to know why travel costs for major programme 10 (International Labour Conference) had increased by 319 per cent and the reason for the very considerable increases for major programmes 180 (Publications) and 235 (Public information). Travel costs had also increased for some of the technical programmes and one wondered if this was necessary. What was the organizational procedure for approving travel? In his Ministry approval for travel outside the European Union was given by a service head different to his own, and for overseas travel it was the Secretary of State. Here it would seem that approval was given at a very low administrative level and that management did not know who was travelling where. While travel was obviously required, savings could be made if it was better organized.

61. The representative of the Government of the Russian Federation expressed his Government's satisfaction with the Programme and Budget proposals for 1998-99 and with the efforts made by the Office in implementing the current budget, which had been amended since its adoption in 1995. However, he thought that with regard to the level of the budget for 1998-99 clarification was needed as to what basis the budget started from. The current amended budget for 1996-97 was $557.8 million and the ceiling for the 1998-99 budget, at an exchange rate of 1.16 Swiss francs per dollar, should not exceed that level. All other amendments which were essentially related to inflation should be absorbed within that framework. The Office should be able to find a solution to a problem that was not really so difficult. Given that the bulk of the resources spent by the ILO was in Swiss francs whereas the budget was expressed in US dollars, it was logical that according to the current rate of exchange of 1.48 Swiss francs to the dollar there would be a considerable reduction in the level of the budget as expressed in dollars. Thus the essential question was the need to absorb fully the amendments made to the level of the budget, which should now reflect that of the amended 1996-97 budget. Of course his Government would welcome further measures to reduce expenditure.

62. Mr. Marshall, the Employers' spokesman, while appreciating that the three key elements of the ILO's activity -- the promotion of democracy and fundamental human rights, the protection of working conditions and the promotion of employment -- were well represented in the budget, asserted that, within the context of the budget debate, some practicalities needed to be recognized. The Employers believed that employment was the key to poverty alleviation and social growth. Conditions of employment could only be protected and improved if there was employment. It was important to recognize that, whilst the promotion of democracy and fundamental human rights were critical, they were not the sole domain of the ILO. On that basis, and given the present world economic and social priorities, the proportion of the budget allocated to these three areas was appropriate. Support for enterprise growth, and in particular support for the development of small and medium-sized enterprises, was absolutely fundamental to the creation of employment, which should remain a key objective for the ILO. The Employers' group was surprised by the position of the Workers' group in this respect, because under the regular budget the enterprise programme ranked only 18th in the list of priorities. It did, though, receive the highest amount of external sourcing, which showed very clearly that enterprise growth was a key activity for social growth.

63. The Employers' group supported the IMEC group's call for more information to assist the Committee in establishing priorities. The Employers' group see it as important for the Committee to discuss these priorities before attempting to establish the level of the budget. The Employers would need time to consider the proposed procedures in light of those programme discussions.

64. The representative of the Government of Italy was pleased with the four major programmes outlined by the Director-General in his introduction as the main priority areas of the ILO. These four priorities -- child labour, reinforcement of activities concerning labour standards, follow-up to the World Summit for Social Development as it concerned workers' rights and the promotion of small and medium enterprises, and the follow-up to the World Conference on Women in Beijing on the protection of women -- coincided exactly with his Government's own priorities.

65. Recently the ILO had participated in several international conferences of great importance: the World Summit for Social Development in Copenhagen, the World Conference on Women in Beijing, and the conferences on child labour in Stockholm, Amsterdam and Oslo; and there was also the issue of labour standards at the World Trade Organization conference in Singapore. There had been a number of inputs from the ILO and it was important that these activities should be developed so that principles were carried over into concrete implementation. For this reason it was important that interim evaluations were undertaken of the ILO's priority activities.

66. While his Government supported the additional documents requested by the IMEC group, it was aware of the current difficulties: countries facing budgetary constraints, the decrease in extra-budgetary contributions, the difficulty of making exact assessments due to fluctuations in the exchange rate, and the considerable amount in unpaid contributions and arrears. He hoped that 1997 would see an improvement in this situation.

67. Finally, referring to the representative of the Government of Malaysia's statement that the ILO should have more teeth, he thought that this was particularly important in relation to the work mentioned by the Director-General in paragraph 23 of his introduction concerning evaluation, training and mobility. These issues were of paramount importance and there should be an interim evaluation of them.

68. The representative of the Government of the United States expressed his Government's support of the statements made by the spokespersons for the IMEC group and the Americas group. He greatly appreciated the Director-General's presentation of the mission, goals, objectives and challenges facing the Organization, and of the resources devoted to these important priorities. The presentation was particularly welcome and an improvement on past practice. The work accomplished since the last budget cycle in developing priorities and in implementing the new budget should lead to a more strategic and transparent budget presentation. As the Office had been willing to respond to specific questions some progress had been made, although it would have been preferable for that information to have been contained in a supplementary document. Such a document should be made available in June as it was impossible to tell from the present document how the ILO planned to accomplish its priority objectives and at what cost. There was no indication of the results of programmes, what outcomes had been achieved, or what the expected duration was of the proposed programmes. Governing Body members often asked what programmes were of low priority and which could be reduced or eliminated, but from the document it was impossible to tell as it was unclear what programmes really cost. During the discussion the replies to the questions asked by the IMEC and Americas group as well as other delegations would be studied so as to find the answers.

69. Nevertheless, a number of areas, while lacking in specificity, did seem to clearly fall outside both the ILO's mandate and the priorities agreed upon by the Governing Body. These included genetic screening under major programme 90 (Working conditions and environment), research and advocacy activities concerning the full integration of women into population programmes, and technical support for educational programmes for constituents in the area of gender and reproductive health under major programme 125 (Development policies). There was a lack of clarity regarding activities related to HIV-AIDS. As well, it was difficult to determine the number of external collaborators and how much was spent on them, and it was not clear how standard costs used in staffing estimates related to the number or cost of actual staffing. This could mean that estimated staff costs were inflated, or the reverse. Travel costs were inexplicably high considering the rate of decentralization and the presence of the multidisciplinary teams. It would be in the interest of the ILO as well as the constituents for the Office to clarify these points.

70. The representative of the Government of China believed that, although priority had been given in the programme and budget proposals to the promotion of employment and the elimination of poverty, the funds allocated were insufficient. Excessively high unemployment and insufficient employment posed a severe challenge to political, economic and social conditions in member States. High unemployment was a waste of human resources, and because it was related to poverty it affected not only developing and transitional countries but also the industrialized countries. It was estimated that 30 per cent of the global workforce was unemployed. Even among the OECD countries at least 34 million people were unemployed, and during the last five years poverty had increased worldwide from 1 billion to 1.3 billion. Each year about 16 million people died of hunger or malnutrition. Unemployment and poverty not only posed a severe economic and social problem, they were also a severe threat to workers' fundamental rights. The promotion of employment and the elimination of poverty was therefore a task of some urgency for the ILO, and the World Summit for Social Development had highly praised the unique role of the ILO in this respect. However, his Government had noted with regret that the Programme and Budget proposals for 1998-99 had greatly reduced resources for employment, training and technical cooperation, and it appeared that the ILO had not focused sufficiently on these tasks at a time when its expertise in these fields was sorely needed.

71. Furthermore, in recent years employment-related issues which should have been dealt with by the ILO were being dealt with by the World Bank or other international organizations. Should this tendency continue the unique role of the ILO and its prestige in the promotion of employment and the elimination of poverty would be affected. The ILO should take this into account when assigning priorities and objectives so as to breathe new life into its activities.

72. Referring to the provisions of the major programme on employment and training, he remarked that certain programmes were very well organized: for example training policy analysis, international coordination concerning the follow-up to the World Summit for Social Development, and the development of small and medium-sized enterprises. These were excellent initiatives, but lacked either content or funds. The programme should include provisions to enhance rural employment, especially in developing countries but also in the transition economies, and to help transition economies consolidate their efforts in employment and enterprise reform. Enterprises in transition economies found it extremely difficult to move towards a market economy and it was necessary to help them improve their productivity and competitivity. Relevant research and investment programmes needed to be established, as did consultancy services and technological assistance.

73. He was surprised that resources for major programmes 60 (Employment and training) and 125 (Development policies), the programmes concerning employment services, technical cooperation, and many others, had been reduced at a time when they should have been increased. It was especially unfortunate to see such a sizeable reduction in resources for technical cooperation, as this had been an important part of the ILO's activities over the years and had been highly acclaimed by countries everywhere. Perhaps there were good reasons for this which were related to past experiences, but the role and methods of technical cooperation should be examined carefully to see how it could play a more important role in the promotion of employment and the elimination of poverty.

74. He was pleased that there had been an increase in the appropriation of resources to strengthen field programmes and supported the programmes on the active partnership policy and work of the multidisciplinary teams. However, the resources allocated to the Asia and Pacific region did not take account of the vastness of the region; massive unemployment was a major problem, there was extensive poverty and there were problems with child labour, migrant workers and women workers. Although the general level of the budget was acceptable, it should take much more account of actual needs.

75. The representative of the Government of Finland joined other speakers in expressing her appreciation of the Director-General's presentation of the 1998-99 programme and budget proposals. It was a reassuring step towards the strategic approach called for by the Governing Body. As the Director-General rightly noted, the effectiveness of ILO activities depended on its constituents, and especially the Governing Body, having access to the ILO's vast wealth of labour information and experience. The calls for more transparency in programme and budget proposals stemmed from this concern.

76. Though the Office was to be commended for explaining the priorities, focus and convergence of its main objectives and how it sought to deliver results in a timely and efficient manner, the presentation of the programme and budget proposals could go further in this direction.

77. Her Government fully supported the priorities identified in paragraphs 2-9 of document GB.268/PFA/6/2 and would appreciate the Governing Body being kept informed of efforts to shift resources into these priority areas and the effects thereof. In conclusion, she welcomed the emphasis on support for democracy and fundamental workers' rights and on employment and training as key components of the ILO's follow-up to the Copenhagen Social Summit.

78. The representative of the Government of Japan endorsed the statement by the representative of the Government of Canada on behalf of IMEC. Although the Governing Body and the Office had worked together to improve the formulation of the budget, he hoped that this commendable effort would be pursued as he was still somewhat disappointed. In both content and format, the budget proposals did not differ much from the traditional approach, and it was difficult to gain a clear picture of what it was intended to do.

79. The presentation by the Director-General the previous day was helpful as it provided a clearer indication of the ILO's priorities and intentions. In particular, the information on extra-budgetary funds helped put the budget into perspective. Over the past two years strenuous efforts had been made to streamline the ILO and reduce expenditure, and this effort should continue in the years to come. Because the ILO's funds were severely limited, it was even more important that sufficient resources be allocated to the ILO's core activities, even at the risk of curtailing others. These proposals should be regarded as a maximum and efforts to make further cuts should continue. He agreed with the representative of the Government of Canada that the ILO must focus on priority activities and generate savings through improved efficiency.

80. The representative of the Government of France observed that in any negotiations it was necessary to consider the views of both sides and the present meeting was the third stage in the Governing Body's negotiations with the Director-General, after those that had taken place in April and November 1996. In so far as the Governing Body was committed to negotiations not just on major orientations but also on the implementation of major political decisions, it inevitably needed more and more information. To be able to render judgement there must more transparency, and he therefore supported the IMEC's earlier requests to that effect.

81. The question was how far to take this call for greater transparency, and what information was needed to determine how well the programmes were achieving their major objectives. The answers should be found in the individual programme descriptions and determining whether they met the main priorities of the ILO would emerge in subsequent discussion.

82. Like the representative of the Government of the United States, he had noticed the reference in the programme and budget to family welfare issues. This reference was intended to support the work of sister international organizations, specifically the United Nations Population Fund, and did not mean that the ILO was embarking on new issues outside its principal areas of competence. This showed that examining each programme in detail did not really help to understand the main thrust of the budget proposals. Nevertheless, he endorsed IMEC's request for greater transparency. Some of the information could be provided promptly in the form of supplementary papers, but for the most part the replies should be taken as guidance for future budget documents.

83. The main question facing the Governing Body was whether the programmes corresponded to the ILO's mission. A careful examination of each programme would probably produce a strong consensus that they did in fact contribute to its priority objectives. Demands for greater transparency should not, however, be allowed to cloud the more important question of the overall level of the budget. The Government of France was prepared to accept the budget as presented, but without the proposed 2 per cent increase.

84. The representative of the Government of Argentina fully supported the recommendations which had been made by the spokesperson for the Americas group. Although the programme and budget proposals reflected a traditional approach which was not conducive to strategic budget planning, the Director-General's oral presentation was a step in the right direction. She expressed general support for the proposals, but regretted that the data presented in the annexes did not show the amounts allocated for specific projects approved by the Governing Body. The budget data should be broken down to enable the Governing Body to match appropriations to the various programmes and to provide a clearer picture of operational costs.

85. Although the Governing Body had been told that the programme and budget envisaged an increase in technical cooperation, the data provided in Information Annex No. 5 showed a reduction in the regular budget and extra-budgetary resources devoted to technical assistance. This discrepancy should be clarified so that the Governing Body could see what priority was being attached to this programme. Finally, she agreed with the observation made by the representative of the Government of Germany that travel expenses seemed excessive and that new communication technologies should make it possible to reduce this budget item.

86. The representative of the Government of the United Kingdom expressed full support for the statement made by the representative of the Government of Canada on behalf of the IMEC countries, and added her strong endorsement of the Swedish Government representative's emphasis on the importance of effective evaluation and monitoring mechanisms. She thanked the Director-General for his presentation the previous day and hoped that this helpful innovation would be repeated. She would make her own comments on specific programmes and on the general budget later in the discussion.

87. The representative of the Government of Nigeria agreed with the objective as well as the main thrust of the ILO's strategy as expressed in the programme and budget proposals. Making the ILO a centre of excellence and reference in the field of employment and labour was an important objective, as was the promotion of democracy and workers' rights through regular dialogue and the proposed series of international forums. He supported also the objective of improving the protection of workers' basic rights, in which standard-setting activities could be expected to play an important role. Laudable as this objective was, the Office and the Governing Body should help developing countries cope with its possible negative implications, in particular through technical assistance programmes. The third objective, fighting poverty, was directly related to that of protecting workers' rights. Much of the focus of standard-setting activities had been on child labour and forced labour, and he was concerned that programmes to reduce child labour should take into account its importance for poor families in traditional societies. Efforts by international bodies to reduce child labour should be accompanied by greater aid to families in need of assistance so as to make them less dependent on their children's contribution, as it was often not possible to increase the productivity of the other family members. Unless emphasis was placed on bridging this gap, these standard-setting activities would undermine efforts towards achieving the related objective of reducing poverty.

88. The representative of the Government of the Islamic Republic of Iran welcomed the suggestions that had been made to facilitate a process of strategic planning. The information annexes presented by the Director-General had improved the transparency of the budget proposals, and the Asia and Pacific group would welcome additional tables and diagrams showing trends and programme details. Organizational streamlining and budgetary savings had resulted from important decisions taken by the Director-General and the Governing Body. Such financial prudence was welcome but care should be taken not to cut the budget to such a degree that activities and programmes became excessively dependent on external resources. Information on the sources and allocation of extra-budgetary funds would be very useful in monitoring this situation, and reductions in the technical cooperation budget should be confined to administrative costs. He went on to say that the Asia and Pacific group had always insisted that poverty alleviation remain a priority objective of the ILO, and suggested that savings could be achieved if sectoral activities were shifted away from meetings and towards technical assistance in this area. The proposals from the IMEC group and the Americas group were interesting and merited further consideration. Some representatives had recommended cutting travel costs, but he cautioned against reducing expert missions and advisory missions because they were an effective means of providing assistance to ILO constituents.

89. The representative of the Government of Poland observed that the 1998-99 programme and budget proposals had given him a chance to learn about the ILO's ambitious plans, which unfortunately risked not being matched by adequate financial resources. The use of advanced technology and improved data-collection methods afforded new opportunities for disseminating this expertise to all member countries, whatever their previous economic system. The ILO should become a clearing-house for concrete, action-oriented information, because this would be a great help to countries confronted by severe labour and social challenges. Access to technical and legal data and to the experience of other countries in implementing policies and programmes could be of great assistance in taking employment and social policy decisions. He applauded the ILO's efforts to be at the forefront of the fight for more and better employment and for greater social justice in the labour market. Improving social security systems was essential if the costs and benefits of structural adjustment were to be shared equitably in transition economies, and the need for practical information regarding modern innovations to ensure social justice was therefore acute.

90. Combating unemployment and improving social services were very important, but these were not the only pressing issues for the ILO; industrial relations and conditions of work and employment also merited attention in today's changing world of labour. Strong emphasis should therefore be placed on developing institutional capacity in labour ministries, social service ministries, labour inspectorates and unemployment services. He noted the reference made earlier to the Fifth Regional European Conference of the ILO which was held in Poland in 1995. The resolutions emanating from that conference were important for countries in transition to a market economy, and the Government of Poland would appreciate information on how to implement them. Finally, he welcomed the references in the programme and budget proposals to improving staff development and training as a means of helping labour administration services to respond to the needs of employers and workers. With international assistance his own country was reconstructing its labour administration system and would be willing to cooperate with other countries in the process of transition to a market economy in organizing labour administration staff training. There should be closer cooperation with the ILO's Labour Administration Branch, the Turin Centre and the multidisciplinary advisory team in Budapest, so as to meet the Central European countries' training needs in this field.

91. Mr. Blondel, a Worker member, noted that building consensus was by definition the role of the Chair and cautioned against any strategy on the part of the Employers to seek consensus with Government representatives at the expense of consensus with the Workers. He congratulated the Director-General on his presentation of the budget proposals and called for increased use of multimedia presentations to improve the level of discussion. Presenting data in the form of charts was particularly helpful in clarifying the distribution of resources. Looking at this information, one could see that employment promotion had been given highest priority. He urged member States to keep funding for programmes promoting democracy and workers' rights at the same level as that for employment promotion programmes. In the Director-General's presentation of the budget the distribution of extra-budgetary funds was not as evenly shared as the distribution of regular budget resources among the three principal budgetary objectives. Employment promotion activities seemed to be unduly biased in favour of employers, and he feared that this lack of balance might undermine efforts to build consensus between the Employers and the Workers.

92. Mr. Blondel reminded the representatives of the Government of the United States of their country's reputation for promoting freedom, and cautioned that this prestige could be undermined by delays in paying their contributions to the ILO. From the discussion so far there seemed to be general agreement that management had to be more efficient, and that funds had to be used more effectively. As societies turned increasingly to liberalization, the ILO should play an active role in helping countries to counter its negative social consequences.

93. While the Director-General was doing what he could to tackle urgent problems, he was handicapped by the failure of some member States to fulfil their obligations. Hearing that some 20 million people were engaged in forced labour made it very difficult to accept these resource constraints. It was all very well to call for less unemployment, but forced labour was hardly an appropriate strategy and could only be condemned. There should also be an explanation of the proposed decrease in funding for sectoral activities under major programme 100. He questioned the comment made by the representative of the Government of Nigeria that child labour was an aid to family income, because sending children to school was also a strategy that improved the long-term well-being of families. He was also concerned that efforts to remove children from hazardous occupations should not result in their simply turning to alternative work. Referring to the recent conference on child labour in Amsterdam, he emphasized that the most effective strategy to reduce child labour was to make it possible for children to go to school. Finally, Mr. Blondel expressed reservations regarding the inclusion of parliamentarians and representatives of NGOs in ILO technical meetings and the proposed Social Forum. He also requested clarification as to the purpose of a second Enterprise Forum.

94. The Director-General, commenting on the debate, recalled that this was his fourth budgetary exercise and that he felt it was his responsibility to provide the Governing Body with an interesting and balanced menu of proposals over which it should be able to reach a broad consensus. For the first three exercises the debate had consisted essentially of the various members of the Governing Body discussing the actual composition of the menu. Witness Mr. Gray's speech earlier that day, for example.

95. A year ago, judging from the criticism he had heard of the ILO's "cooking", he had thought that it was the ingredients themselves that were the problem. But apart from Mr. Gray who did not agree with the menu and wanted it changed and improved, no one appeared to have any violent criticism to make of its general composition. Yet over the past eight years the Governing Body had never been quite so hesitant about giving its approval. He realized that the issue was not just one of having some new dishes to digest; it was a nutritional issue, and that was another matter altogether. What the governments seemed to want now was to know exactly what went into each dish -- how much fatty substance, how many proteins, lipids and glucides -- in other words, a complete breakdown of the food they are being served.

96. It has taken years to fully comprehend that what the Governing Body was looking for had changed. For his part the Director-General was not convinced that making good food and being a good dietician called for the same skills, nor that as a result people were going to eat any better or feel any more satisfied. But the message was now clear, and the Office would endeavour to take due account of the comments of the members of the Governing Body.

97. The Committee had before it a paper⁽²⁾ containing a recommendation by the Director-General concerning the structure of discussion on the Programme and Budget proposals for 1998-99. The Committee agreed to the recommendation in the paper to discuss the individual programmes in six major groupings.

A. General management and meetings (including the Conference, the Governing Body, regional meetings and sectoral meetings), shown under major programmes 10, 20, 30, 40 and 100

98. Mr. Gray, speaking on behalf of the Worker members, underlined the fact that a large part of the overall proposed programme and budget savings -- amounting to nearly $9 million -- came from major programmes 10, 20, 30, 40 and 100. The bulk of the savings came from cuts in the ILO's policy-making bodies, in the Conference, the Governing Body and in regional meetings, as well as in respect of sectoral meetings and other sectoral activities. As concerned major programme 10, the Conference had yielded considerable savings through reforms made since 1993. Reforms introduced in 1996 had been extended to 1997 and there was an assumption that they would continue in 1998 and 1999. However, the Worker members retained their established and strong objections concerning restrictions on the publication of the Provisional Record. The Conference had overwhelming importance as the ILO's highest decision-making body. The Director-General had given notice of possible future reforms, but no reform could be allowed to impair the proper functioning of the Conference, regardless of perceived financial gains. The Conference could not be squeezed indefinitely and reforms already introduced needed to be monitored carefully and subjected to regular review. Governments should recognize that the savings realized from the reform of the Conference were greater than those indicated in the budget proposals because governments' obligations to finance their tripartite delegations had been reduced. The Workers underlined their strong attachment to the assumption made in paragraph 10.4 of the proposals that there would continue to be three technical items on the agenda of future Conferences.

99. Referring to major programme 30, dealing with major regional meetings, the Workers had only two queries, both of which concerned language use. Paragraph 30.4 of the proposals indicated that the meetings of the members of the Workers' and Employers' groups, foreseen for the first morning of such meetings, would have to take place one after the other because of constraints on interpretation facilities. This made adequate group preparation very difficult. The Worker members asked whether it would be possible to hold simultaneous group meetings at subsequent points during these meetings, and requested information on the cost implications of a review of this situation. Similarly, it was noted that while documentation for the American Regional Meeting was to be provided in French, no such provision was made for interpretation. The Worker members asked whether this was in line with past practice or if it constituted a new cut.

100. While supporting the proposals for major programme 40 on general management -- which were unchanged -- the Workers wished to place on record the importance they attached to an effective collegiate approach in the overall guidance of the Organization by those at the top management level. Although the relevant proposals were spread out in a wider number of major programmes than those covered by this part of the debate, the Worker members wished to take the opportunity to make clear their preference in respect of the programme of technical meetings (paragraph 58 of the Director-General's introduction). In so doing, they underlined that meetings of this type were, and must remain, an important means of ILO action. The Workers were therefore pleased to note that proposals were made for convening nine technical meetings, instead of the seven referred to in November 1996. The Worker members could agree to the Director-General's proposals with the single exception of the Meeting of Experts on Labour Statistics: Occupational Injuries, which they wished to see replaced by the Meeting of Experts on Ambient Factors at the Workplace (concerning noise, dust and other pollution factors), which was to have taken place during the current biennium with a view to the adoption of a code of practice. In summary, the Worker members agreed with the proposals in major programmes 20 and 30 assuming answers could be provided on the question of interpretation and interpreters. In view of the fact that the regional meetings had been shortened, there should be at least enough interpretation to hold simultaneous meetings of the Worker and Employer members on both the first day and during the course of the meeting.

101. Mr. Marshall, speaking on behalf of the Employer members, recalled that general comments had already been made in respect of the overall budget and it was appropriate now to consider the specific programmes as proposed by the Director-General in the categories listed. The Employers regarded this opportunity as a means of identifying priorities and of developing practical responses to those priorities and, therefore, as a useful tool before establishing finally the budget allocation levels. A number of very constructive proposals had been made by the IMEC and other Government representatives concerning, in particular, the information required to further the transparency seen already in the context of this budget development activity. While members of the Committee would obviously consider these proposals within their appropriate groupings, it was important to place on the record the need to recognize that any further consideration of the programme and budget in June should take place as a continuation of this Committee's activities with full tripartite involvement.

102. The major programmes included under paragraph A (of document GB.268/PFA/6/S) had all been the subject of considerable prior discussion in this Committee and in other Governing Body committees, with a view to both achieving cost savings and efficiency in the professional delivery of the programmes. In general terms, the budget proposals reflected the understandings reached in those discussions. In respect of major programme 10, the Employers agreed with the understandings reached in previous discussions and wished to indicate that, while it was appropriate for budgetary purposes to make provision for three technical items to be discussed at the 1999 Conference, that should not predetermine the outcome of future discussions on the content of that Conference. It might be appropriate to have two items although, for budgetary purposes, the matter could be left as proposed. The Employer members had no further comment concerning major programme 20. In regard to major programme 30 on major regional meetings, the Employers understood the point raised by the Workers concerning the scheduling of the meetings of the Employer and Worker members but considered that the proposal be retained and that there be an attempt to make the situation work in practice. While it might prove important to take another approach to maintain an international perspective, it was agreed for the moment that these meetings take place without the attendance of Governing Body delegations. There were no additional comments in respect of major programme 40. The Employer members were very supportive of the ILO's sectoral activities (major programme 100) and believed that some constructive outputs could be achieved from properly planned sectoral meetings which were targeted to specific sectoral issues. Such meetings should not be merely an opportunity for people within a specific sector to come together. The proposal to reduce the number of meetings during the biennium was accepted although this should not necessarily mean that such a situation should continue. It was considered, in fact, that sectoral activities might take on a high profile in the future, particularly in relation to employment generation activities within a given sector. The Employer members appreciated the enhanced budget for follow-up to these meetings. The follow-up activities should not, however, be predetermined and the Governing Body's Committee on Sectoral and Technical Meetings should review actively each sectoral meeting and determine the appropriate follow-up in respect of the specific sectoral issues discussed at those meetings.

103. The representative of the Government of Canada recalled the statement made by the IMEC group on the programmes under discussion which sought information on estimates of the full costs of the Conference, Governing Body and major meetings which, it was hoped, might be available before the end of the discussion. Noting that the statement also referred to efficiency savings and the need to look at streamlining -- which remained a preoccupation of the IMEC group -- she indicated a desire to see those criteria widely applied, perhaps in a specific suggestion to impose more discipline with regard to timing. Consideration should be given as to whether there was scope to shorten the meetings, and the speeches, and to start the meetings on time. Substantial savings had been achieved through this measure in respect of the 1997 Conference and could be imposed usefully also in regard to Governing Body sessions.

104. The representative of the Government of France expressed support for the comments made by the representative of the Government of Canada concerning discipline and the timing of meetings. With regard to major programme 10, which dealt with the International Labour Conference, he wished to thank the Office for having taken into account the interventions made concerning the Provisional Record and for having found a compromise solution. In addition, he asked for clarification as to whether the complete record of the Conference would include the plenary discussion of the reports presented by the Chairperson of the Governing Body and the Director-General. Information was also sought on the difference between the cost for external printing (outlined in paragraph 10.6 of the proposals) and the cost of the method used previously.

105. The representative of the Government of the United States supported the comments made by the representatives of the Governments of Canada and France and reaffirmed the wish to receive details on the full cost of the meetings, as requested in the IMEC group statement. With regard to major programme 10, it was considered that any reforms affecting the Conference should be targeted towards ensuring that full use was made of the potential for the Conference to enhance the visibility of the Organization at the highest levels. The Conference should be made attractive for ministers to attend and its products needed to be marketed in such a way so as to ensure the ILO was recognized as a leader in the field of labour standards and employment. Her Government, as well as others, had noted in the past that it would be preferable to keep the number of Conference agenda items to a manageable level in order to ensure the highest quality of new standards adopted. It was therefore preferable for the budget to take into consideration two standard-setting items annually although, for planning purposes, five such items could be considered for the biennium. As most of the costs in major programme 20 were concentrated on the travel of Governing Body members, she asked for an assurance that this travel would be undertaken in the most economical way possible, eliminating business class travel and ensuring that the per diem rates were well within the rates expected by governments. There was some confusion as to what was actually included within major programme 40 (General management). As Assistant Directors-General were covered elsewhere in the proposals, there was a need to know the reasons for this difference and the justification for including this matter also in paragraph 40.2. There was also a concern about the relationship between the Professional and General Service staff in this programme. Her Government believed very strongly that the committees of the Governing Body needed to be careful about the number of items on their agendas. While there were many important issues being considered in the ILO -- and there was a natural inclination for discussion of those matters as quickly as possible in the appropriate committees -- it was also important to prioritize these issues, as the agendas were becoming far too large for the committees to handle in the time available. There should, for example, be only one annual meeting of the Technical Cooperation Committee and a half-day was sufficient. The same consideration applied to the Committee on Sectoral and Technical Meetings.

106. The representative of the Government of Germany associated himself generally with the views of the previous speakers and wished to recall his request for clarification as to why there had been an increase in travel costs of 319 per cent in major programme 10 (International Labour Conference).

107. The representative of the Government of Japan indicated, in regard to major programme 10, that the speeches and addresses of many persons attending the Conference, which included ministers and high-level trade union officials, had an inadequate impact because, unfortunately, they did not attract the attention of the outside world. It was, therefore, important that arrangements be found to publicize these speeches not only within, but also outside, the ILO. As concerned major programme 30, he referred to the fact that the first Asian Regional Meeting to be held under the new format would take place in December 1997 and would provide an opportunity to assess the new arrangements. Seven staff were to be dispatched from headquarters to attend this meeting. Information was sought as to whether interpreters would be sent from Geneva or recruited locally. Referring to major programme 40, the speaker also asked how differentiations were made between the tasks assigned to the Deputy Directors-General and the Assistant Directors-General. Commenting on major programme 100, he emphasized that sectoral meetings ought to focus their debates on sector-specific issues because political issues such as the social clause often took up most of the time allocated for discussion. During the course of these meetings, the members of the working parties were often the only members who were kept busy, with the result that the other participants were not engaged actively in the meeting. Accordingly, it was necessary to devise an arrangement to ensure that all participants could take an active part in the deliberations. Reports of those meetings should be taken up at Governing Body meetings, and in the case of seminars, resumés at least should be reported to the Governing Body.

108. The representative of the Government of the United Kingdom welcomed the proposals for the major programmes and the reforms that had been put in place. The streamlining of the Conference and the Governing Body had already proved successful and there should be parallel reforms for the regional meetings. The Office should continue exploring the scope for further savings but in the case of the Conference, the most important public manifestation of the ILO, there was a need for complete revitalization as well. The representative of the Government of the United States had made a number of suggestions to promote the Conference and it would be useful to hear more about the idea of a Social Forum during the Conference. She expressed support for the call by the Employer members for well-planned and targeted follow-up on all sectoral meetings.

109. Mr. Blondel, speaking for the Worker members, referred to Mr. Gray's comments on major programme 100. The Committee would not be surprised to hear that the Worker members were not satisfied with the proposals made by the Director-General because they reduced the resources by more than 20 per cent for a programme which was of crucial importance to the activities of the ILO. The importance of this programme should be acknowledged by all members, especially as the Director-General had emphasized the necessity of bringing the ILO closer to its constituents -- the precise objective of sectoral meetings. The Workers had the impression that sectoral meetings were being systematically and regularly devalued at the ILO, an unfortunate development when these meetings provided a unique tripartite framework for exchanging points of view on questions and problems related to the world of work -- problems which were raised by those directly concerned. The sectoral meetings were fundamental to the ILO's activities as they contributed to reinforcing national capacities in the area of industrial relations, as proposed in major programme 80. The evaluation of sectoral activities carried out by the Governing Body in 1995 had resulted in a new structure for the meetings. The reduction in the budget for the meetings was to be offset by an increase in spending on technical assistance activities, consultation and follow-up, so these changes would have had no net financial impacts. However, the decisions taken by the Governing Body in the difficult financial climate in 1995 meant that the number of sectoral meetings had fallen from 16 to 12 in one biennium, with a proportional reduction in the spending on means of action. The Workers were not claiming that the resources for this major programme did not conform to decisions taken earlier, but it was evident that sectoral activities were the most affected by global budgetary reductions. In the circumstances prevailing in 1995 it had perhaps been easy to target sectoral meetings, but current circumstances demanded a more balanced approach and a significant modification of the proposed cuts. The Workers were concerned that the 1995 evaluation exercise, far from laying down the basis for a more dynamic and efficient programme of sectoral activities, appeared to be opening the way to the gradual dismantling of this major programme. The reductions in staff and financial resources envisaged could deprive the programme of the expertise and competence necessary to guarantee its efficiency, and indeed one had the impression that the very existence of the programme was threatened. The Workers had already given their agreement to the 12 meetings in paragraph 100.9, which corresponded to decisions already taken in November 1996. Mr. Blondel expressed support for a meeting of the Joint Maritime Commission, which had already been raised at the first discussion on the programme and budget. The Commission should not be classified as a sectoral meeting because it was different in nature and had a very specific objective. The last regular session had taken place in 1991, with brief ad hoc sittings in 1994 and 1996. The Commission should be convened in 1998-99 in order to ensure the proper follow-up to the last session of the Maritime Session of the Conference. If a meeting was not held in the next biennium the earliest date for it would be about the year 2000, which was too far away. In a 1991 resolution the Commission had indicated the items to be placed on the agenda of its next session, one of which was the revision of ILO maritime Conventions. These formed part of the overall review of policy on the revision of standards, and the Joint Maritime Commission would be the best equipped to carry out this exercise.

110. The Workers would not make detailed comments on the follow-up proposals for sectoral meetings because they understood that preliminary consultations with constituents from the sectors concerned and with international workers organizations had been held on the proposed measures. That said, the proposal in paragraph 100.17 on basic metals appeared strange: "the changing roles of unions in relation to other workers representatives in negotiations with the management on new work practices". He asked what the relation of the unions in relation to the other workers representatives was, as it suggested competition between trade union organizations and pseudo-unions.

111. In general the Workers had agreed during the evaluation of sectoral activities that they be organized around modules comprising meetings, research activities, advisory services, technical cooperation and networking activities, etc. They trusted that this idea would be retained and applied. It was important that the available resources be equally distributed between the 22 sectors that had been identified and that the activities be organized in a regular and timely way without long interruptions or fluctuations caused by the cycle of meetings. If reductions in the major programme were unavoidable, the sectoral programmes should be integrated into other technical and regional programmes, with some exceptions -- specifically, major programme 90. He regretted that no conclusions had been drawn from the excellent work of the Symposium on Multimedia Convergence; it had been interesting but the lack of follow-up meant it would have limited significance for the future.

112. Mr. Thusing, speaking on behalf of the Employer members, expressed his support for most of what had been said on the subject but said that Mr. Blondels intervention had prompted him to take the floor. He too would be pleased if this programme were allocated more resources, but it was normal that a reduction in resources should result in a reduction in the number of meetings. However, detailed analysis of the programme had been carried out and a decision had been taken on a reduction involving new procedures and structures. Pointing out that the existence of the programme was not endangered in any way, he said that it should continue as planned and no immediate assessment should be made to reverse these decisions.

113. Referring to the question of follow-up measures, he agreed that, although sectoral meetings did not necessarily give rise to conclusions or resolutions, the form of the follow-up was extremely important and had to be identified by the meeting. The overall package seemed acceptable, but there was not necessarily agreement on all the details within the package. Future follow-up action should be better discussed in the Committee.

114. A representative of the Director-General (the Deputy Director-General responsible for Policies related to Standards, Sectoral Activities and Relations with ILO Organs) responded to the objections raised by the Worker members and by the representative of the Government of France regarding the Provisional Record and said that the Governing Body had decided after the 1996 Session of the Conference to continue the new arrangement in 1997. The Provisional Record was one of the largest expenditure items at the Conference and it would cost about $500,000 to re-establish it in its earlier form. Referring to the statements of the representatives of the Governments of the United Kingdom and of the United States calling for a revitalized Conference, the Office was already considering this matter but any changes would inevitably mean some additional costs. Referring to points raised by Mr. Gray on regional meetings, he explained that full French interpretation had been provided for Haiti at the Conference of American States Members of the ILO. In the event, however, no delegation from Haiti had attended. Simultaneous interpretation could be provided at no additional cost if the Government members met briefly the first day, as had been the normal practice. Otherwise one more team per language would have to be added, and this would incur extra costs. Turning to the statement of the representative of the Government of Canada, he replied that the budget had to be drawn up on the basis of certain assumptions but there would always be difficulties later if they were not met.

115. Referring to Mr. Chotards statements, he confirmed that Committee reports would be included in the final Record of Proceedings printed after the Conference. Regarding the savings achieved by printing the Record in-house rather than outside, he compared the general printing costs of $1,922,240 for 1996-97 with the estimated costs of $1,168,600 for 1998-99, which meant a reduction of $753,640. These figures, however, included all costs and went beyond those indicated in paragraph 10.6 of the programme and budget proposals.

116. Responding to various questions about travel costs for the Conference, these had been presented differently from the past, when they appeared under personnel costs. They represented the cost of bringing officials from the field to serve on a committee or to fulfil a specific function at the Conference. This explained the increase of 319 per cent mentioned by the representative of the Government of Germany. These costs were now presented under the right title.

117. As regards general travel costs, which the representative of the Government of the United States had mentioned, he said that prudent management implied addressing them. Sometimes there was a difficulty of taking advantage of economy class fares on shorter trips or on trips which did not include the weekend. The DSA for the weekend could in some cases negate any savings. He acknowledged the comments about business-class travel but wondered whether Governing Body members from outside Europe would appreciate travelling economy class. In reply to the statement of the representative of the Government of Japan concerning Asian regional meetings in the current biennium, he explained that interpreters were not recruited from Geneva but locally from Bangkok, except for English. Russian interpreters were recruited from Moscow, Chinese interpreters from Beijing and Arab interpreters from the Arab region.

118. A representative of the Director-General (the Director of the Bureau of Programming and Management), in answer to the first question of the representative of the Government of Canada who spoke on behalf of the IMEC group, said that what they were talking about was the total cost of the General Management over and above what appeared in major programme 40.

119. Major programme 40 comprised the resources earmarked for the members of the General Management, i.e. the Director-General, three Deputy Directors-General and two Assistant Directors-General -- a total of $2,995,000.

120. Other resources than those mentioned in major programme 40 included the six other posts making up the General Management: Treasurer and Financial Comptroller, Regional Director for Africa, Regional Director for the Americas, Regional Director for the Arab States, Regional Director for Asia and the Pacific and Regional Director for Europe. The expenditure for these members of the General Management appeared under the major programme for each region and, in the case of the Treasurer and Financial Comptroller, under major programme 170 (Financial services).

121. There were also two other Assistant Director-General posts, the Director of the International Institute for Labour Studies and the Director of the Turin Centre, which were shown under the corresponding budgets.

122. All in all, eight regional Assistant Director-General posts did not appear in major programme 40, for a total of $6,990,480. The overall total General Management was therefore $9,488,450, plus the $6,990,490 for the other members.

123. The Deputy Director-General responsible for Policies related to Standards, Sectoral Activities and Relations with ILO Organs said it was reassuring to hear the groups express their agreement on the importance of the programme on sectoral activities. A special effort had been made to express the programme objectives in such a way as to facilitate the integration of the sectoral programme with other activities in the house because of the close linkages between sectoral activities and almost all other ILO programmes.

124. The Director-General, replying to the question of the profile of the Conference and its significance which had been raised by the representatives of the Governments of the United States, Japan and the United Kingdom, said that there were two considerations. The first was what must be done to attract ministers to the Conference, make it interesting for them and give their speeches a proper impact. The second was how to ensure that the ILO was taken into account by public opinion and could sell its products more easily. These were important and difficult questions. Broadly speaking, ministers were more likely to attend if they found the topics discussed at the Conference interesting. That was also the best way of arousing media interest, and the ILO was more likely to attract ministers if they thought that their statements might be taken up in the press and on television. At the same time, the media would be much keener to cover the Conference if it was attended by decision-makers making policy statements.

125. The fundamental question was whether the ILO could do a better job. If one asked whether, as it stood, the Conference was ideally suited to this type of activity, the reply was a resounding "no". Some people might say that that was not what it was there for, that its purpose was first and foremost to carry out a certain amount of important and difficult technical work on a tripartite basis, and that therefore the ILO's first concern must be to have an effective, serious Conference discussing matters without worrying about public opinion.

126. Without wishing to belittle this fundamental aspect of the Conference, the Director-General felt that it was possible to combine the two operations.

127. One way of improving things would be to ensure that the Conference's agenda was interesting. The Director-General's forthcoming Report to the Conference would describe how the Conference agenda was established. Choosing the standards or Conventions to be discussed took a long time and involved a complex and difficult dialogue with member States. There was no reason to link them to other items on the agenda. But the procedure started much too early and did not take into account the latest developments or swings in public opinion. As far as possible, a compromise was reached between standard-setting activities and other activities, and often there was no opportunity at a later stage to opt for more topical, interesting subjects that might have had a greater impact among ministers, in the general public and in the mass media. Taking decisions two or three years in advance meant that the Conference might end up with items on its agenda that were no longer so topical. His Report would contain precise suggestions on this point.

128. Was it possible to go a step further and imagine that, apart from the technical work of the Conference, a series of other events could be organized? This had already been tried and recent years had seen some innovations, such as the organization of informal meetings of ministers on more topical issues. It had been very successful. Ministers had attended, sometimes in considerable numbers, and both public opinion and the media had shown an interest in these events. Another question was whether the ILO should consider more modern marketing methods. A new departure this year had been to organize an Enterprise Forum separately from the Conference, which had drawn people to Geneva and to the ILO who did not traditionally come to its Conference sessions and its meetings. Everybody had considered that the innovation had been successful, and in his Report he proposed that the ILO continue along these lines and organize other forums of this kind. The representative of the Government of the United Kingdom had asked how the two could be combined. Was it possible, at the same time as the Conference, to organize round tables, meetings and forums attended by people other than those who were normally part of the Conference, and also by employers' and workers' representatives and ministers of employment and labour attending the Conference? If the ILO wanted to interest public opinion in forums and round tables that did not lead to immediate decisions, the subjects for discussion had to be highly topical, difficult and complex and the international personalities who came to express the