ILO is a specialized agency of the United Nations

273rd Session
Geneva, November 1998


Reports of the Programme, Financial and
Administrative Committee

Third report:
Preparation of the Programme and Budget
proposals for 2000-01

1. The Programme, Financial and Administrative Committee of the Governing Body met on 11 and 12 November 1998 under the chairmanship of Mr. N. Akao, Chairperson of the Governing Body. Mr. S. Marshall (Employer spokesman) was the Reporter.

Preparation of the Programme and Budget
proposals for 2000-01
(Seventh item on the agenda)

2. The Committee had before it a paper(1) providing information for the preparation of the Programme and Budget proposals for 2000-01.

3. The Director-General, introducing the proposals, said that the document called for three important comments. The first related to various points on which the Office would like to know the views of the Governing Body in order to prepare the draft budget for March 1999. The Committee's recommendations were especially important because it was a transition period and the next budget would be presented by the new Director-General.

4. The second comment was that the Office had made every effort to understand the numerous remarks and criticisms that had been expressed in recent years on the presentation of the budget.

5. The document in general, and more particularly Part III "Overview of the proposals", was prepared in response to what PROGRAM had understood as the Governing Body's expectations.

6. It was therefore important for the 2000-01 budget that the Committee indicate whether presenting the budget under strategic and operational objectives was more useful, effective and appropriate than past budgets or whether it needed further changes.

7. The third comment had to do with the follow-up on the Declaration which was an extremely important budget item for 2000-01.

8. There had been two documents on the follow-up. First, its budgetary aspects were briefly mentioned in paragraphs 21 to 27 of the document before the Committee. Secondly, a more substantial document had been submitted directly to the Governing Body on the political implications of the Declaration and its follow-up.

9. In both cases (the document before the PFA and the one submitted to the Governing Body) the Director-General had indicated that he has deliberately confined himself to the technical arrangements for the follow-up, in the narrow sense of the term. This of course did not do justice to the complexity of the Declaration and did not reflect the spirit in which it was adopted. In particular, it did not take into account the fact that the follow-up arrangements themselves were to be part of a broader promotional context.

10. The Director-General had done this on purpose because, notwithstanding the general context in which the whole issue must be placed, the follow-up arrangements or promotional aspect of the Declaration presupposed political options that it was not for him as outgoing Director-General to decide on. He had mentioned this contradiction and this difficulty to the Chairman of the Governing Body and the regional representatives and had placed himself at the Governing Body's disposal. The representatives had felt that he should be ready to submit suggestions to the Committee and inform it of his views on the matter.

11. The Director-General said that he remained at the Governing Body's disposal if it thought he could contribute usefully to its deliberations.

12. Mr. Thüsing, speaking on behalf of the Employer members, expressed his gratitude to the Office for taking into consideration the wishes expressed by Committee members to change the presentation of the programme and budget proposals. Although the document differed in some ways from the old style, there was a feeling amongst the Employer members that the new presentation was difficult to read and did not fulfil the hope of greater transparency, inasmuch as there was little real evidence of a new approach in the document. They hoped that the second document presented in March would take more account of their wishes for greater transparency.

13. The document set out three main objectives, and although they encompassed all proposed activities it was difficult to verify what percentage of each activity corresponded to each objective. In table 2 it was impossible to check whether the percentage of resources shown were in fact being allocated to the objectives and it was difficult to see if there was any substance behind the figures. A short summary under particular objectives would have been preferable. As mentioned in paragraph 16 of the document the Programme and Budget proposals for 2000-01 should be sufficiently flexible to reflect the priorities of the incoming Director-General. Flexibility was also important to enable the Organization to cope with unforeseen problems that would inevitably arise in the next biennium.

14. It was important to make a distinction between the Declaration on Fundamental Principles and Rights at Work and its Follow-up on the one hand and the ratification of fundamental standards on the other. Strategic Objective No.1 did not make this distinction sufficiently clear and thus gave no solid basis for discussion of this activity. He also mentioned that in relation to the Declaration the document often used the term "workers' rights" instead of "rights at work". Tripartism and social dialogue should have appeared under a separate objective encompassing the relationship between the social partners, employers' associations and workers' associations. The second strategic objective concerned employment promotion and enterprise development. This was an extremely important activity and should not be confined to small and medium-sized enterprises and the informal sector. Every enterprise contributed in some way to employment generation. The text referred to employment-friendly enterprises, but every enterprise could be considered in this light, even if it was not labour intensive, because of the other enterprises it worked with and helped sustain. More should be done to create a climate in which social partners and politicians had a more positive attitude to the contribution made by enterprises to the development of society and the creation of jobs. The particular problems associated with the employment of young people was also an important issue and deserved higher priority.

15. The Employer members supported the classification of policies and programmes for the protection of workers as a strategic objective. Social security programmes were an important component of this objective but the emphasis should be away from expanding existing systems and more towards an in-depth examination of ways of completely restructuring social security systems, taking into account the increasing role of the private sector in this field. Safety and health were important issues under this objective, especially as they were areas in which the Employers and Workers shared similar views. Standard-setting was regarded by the Employers as an important ILO activity but there had to be some revision not only of the formal text of the standards but also of the procedure for fixing them. Looking at wider aspects of the ILO's activities, it should foster much closer cooperation with other organs in the UN system and with the Bretton Woods institutions, first to give fuller expression to the ILO's mandate and second to attract more extra-budgetary financing.

16. As a concluding comment, the Employers asked for a more transparent presentation of the Programme and Budget proposals for 2000-01 at the next session of the Governing Body in order to facilitate discussion in this Committee. As for the action programmes described in paragraph 143, he would prefer not to have to indicate preferences at this stage; however, if others in the Committee wished to do so now, their preferences were: Nos. 1, 3, 4, 5, 6, 7, 8, 9, 10, 13, 14 and 22. For the technical meetings described in paragraph 147, their preferences were: Nos. 1, 3, 4, 5, 7, 10 and 14.

17. Mr. Blondel, speaking on behalf of the Worker members, observed that the Programme and Budget proposals for 2000-01 had been prepared by the current Director-General but they would be submitted to the next International Labour Conference under a new Director-General who would be responsible for their implementation. The incoming Director-General should have the opportunity to have his priorities reflected as well in the proposals and members of the Governing Body hoped that he would be able to participate in the discussions at its next session in March 1999. The Workers commended the Director-General for having already held consultations with his successor to ensure he was fully aware of the background to the proposals.

18. Mr. Blondel congratulated the Office on the new presentation of the programme and budget proposals as described in paragraph 14 of the document which gave a clearer statement of the strategic and operational objectives of the Organization. The three strategic objectives were essentially the same as those presented in earlier budgets, but the Workers believed that tripartism and social dialogue had been treated rather arbitrarily and deserved to be given more vigour and clarity under a separate main strategic objective.

19. The establishment of a Bureau to coordinate the follow-up to the Declaration adopted at the 1998 Conference represented the most important proposal for the Worker members and its work would be more effective if characterized by a strong multidisciplinary approach. They also expressed broad support for the proposals relating to the Active Partnership Policy and technical cooperation activities outlined in paragraphs 28 and 30, which might be better classified under a fourth strategic objective on tripartism and social dialogue as proposed earlier. Provision for the regular evaluation of the results of the active partnership policy and the follow-up to the report submitted to the Committee on Technical Cooperation should be clearly defined and established. It was regrettable that cuts had been proposed for technical cooperation activities in Africa. In view of the difficult economic and social conditions facing many member States in that region the more appropriate course would be to increase assistance as much as possible.

20. Table 2 of the document did not reflect the fact that a single activity could contribute to more than one objective, and the figures would change according to the action programmes and technical meetings chosen. The present Governing Body sitting was probably not the appropriate time to select specific action programmes, especially as the incoming Director-General might wish to adjust priorities early next year in response to changing economic conditions. Programme directors should perhaps be allowed greater flexibility to reallocate resources among programmes to ensure that the global objectives established by the Governing Body could be more readily achieved. Of all the proposed action programmes submitted only 23 were shortlisted and of these the Committee was to select just 12. This exercise must have created a lot of frustration among programme directors who had seen their proposed action programmes dropped. The Worker members would not be submitting a shortlist of action programmes at this Session, and they requested the Office to provide the Governing Body with a document evaluating the selection procedure and the outcome and outputs of the various action programmes implemented in the past. The selection of only seven technical meetings also was difficult, but of those listed in paragraph 147 they would give indicative support to Nos. 1, 3, 5, 6, 8, 13 and 15 and would like a decision to be taken in March 1999.

21. The Workers were becoming concerned at the level of support given to informal sector activities by the Governing Body. Members should understand clearly that the informal sector was only a transition phase towards the formal sector and any activity aimed at promoting the informal sector at the expense of the formal sector would be strongly rejected by the Workers. This was part of a much wider problem and the Workers wondered if the ILO should consider in future organizing an annual conference dedicated to employment. This was after all within the core mandate of the Organization and it would be an opportunity to actively promote social values and ethics as critical elements not only in the development of countries in transition but also in those undergoing structural adjustment. Such activities would provide a much needed balance to the purely macroeconomic, monetary, and financial considerations promoted by other institutions. The Workers noted that in several places in the document where freedom of association was mentioned there was no reference to collective bargaining. They were also concerned at the special emphasis on subcontracting activities. There was perhaps a tendency to overstate the extent to which small and medium-sized enterprises created jobs when compared with large-scale enterprises. Small and medium-sized enterprises certainly had a role to play but there were real dangers in uncontrolled and unmonitored subcontracting arrangements.

22. The representative of the Government of Canada, speaking on behalf of the IMEC members, expressed appreciation for the Office paper and also for the effort made to respond to Governing Body and IMEC requests for a strategic approach to budget presentation. In particular, IMEC welcomed the fact that the strategic and subprogramme objectives presented reflected the core mandate of the ILO, and were stated in terms of anticipated results; that the indicative resources were allocated to the objectives; and the clear way in which regional programmes related to the strategic objectives. IMEC members welcomed the high visibility given to the follow-up on the Declaration and the programme on the elimination of child labour, two key IMEC priorities. The Office paper provided the basis for the Governing Body to fulfil its role in setting policy and programming directions and the task now was to respond to the Office request for clear guidance on further development of the Programme and Budget for 2000-01.

23. The IMEC members appreciated the degree to which the document incorporated a number of IMEC priorities presented to the Governing Body last March. There were four major areas of concentration. The first, fundamental rights and principles at work, could include programmes on the follow-up on the Declaration and on child labour. The second, employment, could include programmes and activities in such areas as creating sustainable and productive employment, conditions of work, occupational health and safety, micro, small and medium enterprises, youth employment and more and better jobs for women. The third, social protection, could include social security schemes, social safety nets, social security in the informal sector and social services. Finally, the fourth area of concentration would be on social dialogue and labour relations and could include strengthening tripartism through support for employers' and workers' organizations, and promoting cooperation between governments and the social partners through information, education and training on issues related to labour, employment and social protection.

24. There was a need for a coherent programming infrastructure to ensure that the means of action utilized by the Office not only achieved the strategic objectives established but also supported all programme planning and implementation activities. Priority should be given to:

  1. establishing high quality and timely technical cooperation and advisory services for constituents;
  2. strengthening the impact of standards by increasing ratification and application, in particular through the ILO's supervisory machinery; by the evaluation and revision of existing standards; and by better selection and drafting of new standards;
  3. strengthening the ILO's capacity for empirical research, analysis, statistics and data on the areas of its core mandate and programmes. IMEC members reiterated their previous request that the Office develop a research and publications strategy which would clearly set out objectives, indicate how aspects of research work in the ILO were interrelated, including the work of the International Institute for Labour Studies, and how the research programme supported the strategic programmes and objectives established;
  4. a public outreach programme to promote ILO principles, values and programmes on employment and labour issues with other UN organizations, international financial institutions and the OECD. This could be achieved through joint discussion and research on issues of mutual interest, and the provision of technical advice for the policies and to the programmes of other agencies.

25. With regard to paragraphs 139-147 on action programmes and technical meetings, IMEC members took a similar approach to the Workers on action programmes. She strongly supported the basic concept of the action programmes as outlined in paragraph 140. Action programmes and technical meetings were intended to support specific strategic and subprogramme objectives, and should be incorporated into planning and resource allocation of the programme as an activity to achieve its objectives. They should also be part of a comprehensive research strategy. The IMEC members were not willing to indicate preferences at this time on either the action programmes or technical meetings.

26. With regard to paragraphs 21-27 on the follow-up on the Declaration on Fundamental Principles and Rights at Work, IMEC agreed with the Office's observations that an effective follow-up would have a significant impact on the programme and budget. The key issue was to ensure that adequate resources were allocated to implement the provisions of the Declaration. A clear multidimensional framework which would allow results to be reported back to constituents needed to be developed, and the Office should draw on expertise and resources from all parts of the Organization, including the field, for this purpose. Once the Governing Body had agreed on the exact requirements for the follow-up, it would be in a better position to decide on the appropriate institutional arrangements which would need to be put in place. Thus, with regard to the proposal to establish a small Bureau to manage and coordinate the follow-up programme, IMEC members requested that further elaboration on the rationale, concept, mandate and terms of reference for a potential Bureau be submitted to the Governing Body.

27. In paragraphs 28-30 on technical cooperation, active partnership and global programmes, the discussion at the next International Labour Conference would address a number of issues including the review of the Organization and coverage of the field structures. Until that review was complete no decisions should be taken on additional field structures or MDTs.

28. IMEC reiterated its support for the concept of global programmes which were consistent with the multidimensional nature of complex issues and an excellent example of how the ILO had adapted its approach to the new demands in meeting constituent needs. They should guide programmes funded by both regular and extra-budgetary funds. In addition to the examples noted in paragraph 30, the concept of a global programme could be envisaged for fundamental workers' rights, social protection, and workers' and employers' activities.

29. IMEC members fully supported the objectives outlined in paragraphs 120-134 and acknowledged the significant progress made in introducing permanent efficiencies and savings in administrative costs, including through new technology. With regard to paragraphs 132 and 12 on the modernization of ILO's accounting and financial system, the IMEC members noted that a well-functioning system was essential for a strategic budgeting approach where resources allocated and results achieved needed to be reported to the Governing Body. The Office should proceed with plans to modernize the ILO's accounting and financial system this biennium, and this modernization could be funded from Part 1 of the programme and budget. If sufficient progress on IMIS was made in New York, completion of PERSIS should also be accommodated in this programme and budget.

30. She emphasized again the importance attached by IMEC to proper monitoring and to evaluating the implementation of the regular budget and extra-budgetary programmes and, as noted in the External Auditor's report last June on programme and performance evaluation, the Office should proceed with a detailed evaluation strategy noting the External Auditor's observations on the need to improve key performance measures or targets, modifying the database, and annual reports on evaluation results.

31. With regard to paragraph 8 which stated that the Programme and Budget proposals for 2000-01 were based on maintaining the status quo of the Programme and Budget for 1998-99, with regard to the budget level and to the allocations to major sectors of activity, the IMEC members believed that reallocation to priority areas was an essential element in planning a new programme and budget. A zero growth budget was realistic for planning purposes.

32. Finally, with regard to the process for finalizing the programme and budget in this transition period, there was a need for flexibility. Key policy discussions in March and June of next year, including the finalization of the procedures and programme framework for the follow-up on the Declaration, the incoming Director-General's report on future directions of the ILO, a new Convention on child labour and the discussion on technical cooperation and Active Partnership Policy would need to be taken into account. In this light, IMEC would propose the following documents for March: first, revisions to the present document to reflect the Governing Body discussions on priorities but based on the four strategic programme blocks. The revised document should include indicative allocations for the four strategic programme blocks plus one for administrative and policy organs. Substantive and technical major programmes would be grouped within the four programme blocks and this would constitute the principal document for the discussions in March. A second section, or an annex based on the traditional programme and budget structure, would provide a cross reference to the current and previous biennia. This document would include concise descriptions of the objectives and details of the programmes of work of the major programmes as they related to the strategic programme blocks and should be approximately two pages in length. The usual appendices should be available at the appropriate time to enable comparisons with previous biennia. Finally, IMEC encouraged the Office to continue the process of close consultations with the new Director-General, the transition team and constituents as the documents were finalized.

33. The representative of the Government of Japan, speaking on behalf of the Asia and Pacific members, commended the Office for the document before the Committee. He appreciated the increased emphasis on strategic objectives and he supported this approach as a way of producing a budget that targeted priorities and efficiently allocated financial resources to achieve those priorities, while taking into consideration the diversity of social, cultural and economic situations in each country and region. Programme savings should not simply be generated by indiscriminate and ad hoc programme cuts but should be achieved through a structured and planned approach which would establish priorities, given the limited resources available, and determine the most cost-efficient means of action to achieve results. The suggestion by the External Auditor for key indicators of performance to be incorporated in the programme and budget should be taken up. By adopting this approach, the Office should be able to achieve zero nominal growth for the Programme and Budget 2000-01, taking into consideration not only the financial difficulties of many member States but also any additional activities that would be undertaken by the ILO, including the follow-up on the Declaration.

34. It was important however to maintain a level of flexibility in the budget not only to accommodate the priorities of the incoming Director-General but also to take into account programme changes which might be decided following the Governing Body discussion of this paper. Some degree of financial flexibility would also be needed if the Office was to have the capacity to respond to urgent matters that might arise in the future. Against this background, the Asia and Pacific members believed that the budget should emphasize five priorities:

  1. The first priority, employment, should focus on providing assistance to achieve sustainable economic development in cooperation with relevant international institutions such as the IMF and the World Bank. Assistance to enhance long-term and short-term measures for employment promotion, human resource development and labour market adjustment should be included under this head. The alleviation of poverty through employment generation was a critical objective for the ILO and the budget allocation for this activity should be increased in future biennia.
  2. The second priority was the improvement of working conditions. Occupational safety and health should be specifically targeted in the Programme and Budget for 2000-01 as it was generally acknowledged that when economic situations deteriorated, occupational safety and health issues were neglected. Special attention needed to be given as well under this priority to the plight of migrant workers and other workers in the informal sector.
  3. The third priority, social protection, should focus on the establishment of equitable insurance schemes for the elderly, adequate benefits for the unemployed, and concentrate on addressing the special problem of occupational injuries and diseases. This was particularly important during periods of severe financial and economic upheaval as was currently being experienced in the Asia and Pacific region.
  4. The fourth priority was the promotion of labour standards. The ILO should adopt a positive approach which focused on national capacity-building to enable member States to achieve such standards. Emphasis should be placed in this section on technical cooperation and the promotional aspects of the follow-up to the Declaration, improvement of supervisory mechanisms and a thorough review of existing standards.
  5. The fifth priority, the promotion of social dialogue, should be addressed through the establishment and implementation of a systematic educational programme on tripartism for the social partners, particularly in the developing countries.

35. The Asian and Pacific members noted that in order to ensure the promotional nature of the Declaration on Fundamental Principles and Rights at Work, the ILO needed to establish an independent high-level body that could take into account the multidimensional aspect of the follow-up. This body would be the focal point for such follow-up and would be held responsible and accountable for its success. It should be independent of the International Labour Standards Department and other ILO departments and not necessarily constrained by existing supervisory mechanisms. In respect of the establishment of the Bureau mentioned in paragraph 25 of Part II of the document, the Asia and Pacific members stressed that further information was needed, in particular on the terms of reference, mandate and size of such a Bureau before a decision could be taken. Other issues, such as the identification of the specific skills required of the members of the Bureau, the criteria used to select members, the mode of operation of the Bureau and the official in the ILO to whom it would be accountable were important issues that still needed to be addressed and this information should be provided in due course.

36. Regarding the proposed action programmes in Appendix II of the document, the Asia and Pacific members strongly supported proposal No. 6 for the creation of enterprises by the unemployed. The role of micro-finance was of particular significance to the Asia and Pacific region which had recently experienced mass unemployment as a result of the financial crisis during the past year. Action programmes that promoted self-employment were extremely important and he hoped that this programme could be extended to all developing countries.

37. The representative of the Government of Algeria, speaking on behalf of the African group, expressed appreciation for the Office paper, and welcomed the opportunity to express its views on programme and budget priorities for the next biennium. The African member States had always been in favour of the Declaration on Fundamental Principles and Rights at Work and requested more information on how the Office proposed to give special attention to follow-up activities. In line with comments from a number of previous speakers they too would like to see an element of flexibility in the proposals so as to allow for the views of the new Director-General. It was regrettable that the Programme and Budget proposals for 2000-2001 would reflect the constraints of zero real growth. Since follow-up work to the Declaration would have to be accommodated within the budget expenditure on other programmes would be reduced. It might be better to look at other methods of financing the follow-up work, for example through the use of extrabudgetary resources. It would be useful also to have some information on why follow-up work on the Declaration was given top priority.

38. Another matter for concern was the statement in paragraph 11 that the current level of resources for regional services and operational programmes should be maintained, in other words that increases in one programme would be compensated by savings in another. It would be useful to have more detail on how the Office proposed to achieve these savings.

39. The Office paper also included a proposal to establish a bureau that would be responsible for follow-up work on the Declaration. Before this was finally decided the Committee should be given more information concerning the membership of the bureau, whether it would be tripartite, who would appoint its experts, would it be a permanent body, the links between it and other supervisory bodies such as the Committee on the Application of Conventions and Recommendations and the Committee on Freedom of Association, and finally on the links between the bureau, the Governing Body and the Director-General. Paragraph 29 of the paper proposed a review of the Organization's field structures, in particular the network of multidisciplinary teams, as well as the creation of three new multidisciplinary teams, one in Asia and one in the Americas. It would be useful to have information on where the third team would be established, and on what had become of the proposal to strengthen the African multidisciplinary teams, especially the Cairo team which at present consisted of only three experts. With regard to the Active Partnership Policy, more information should be made available on the number of African countries whose country objectives had not yet been defined.

40. The African group members fully supported the proposals in paragraph 30 concerning the better mobilization of extrabudgetary resources, support to the major global programmes such as the International Programme on the Elimination of Child Labour (IPEC), the Strategies and Tools against Social Exclusion and Poverty (STEP), and the increase of 10 per cent in the total of extrabudgetary resources allocated to technical cooperation activities.

41. They also fully supported the activities described under the strategic and operational objective framework, but especially those dealing with policies and programmes for more and better jobs set out in detail under strategic objective No. 2. Of the action programmes described in paragraph 143, they expressed support for Nos. 1, 2, 3, 4, 6, 7, 8, 12, 14, 16, 21 and 23.

42. The representative of the Government of India welcomed the changed format of the presentation of the Programme and Budget proposals for the biennium 2000-01. The strategic budgeting approach should help the ILO in defining priorities as it began work in the new millennium. Reiterating support for the statement made by Japan on behalf of the Asian and Pacific group, he stressed that more resources should be allocated for technical cooperation programmes.

43. There was a certain amount of duplication among the three strategic objectives listed in the Office document, particularly between items 1 and 3. In order to address contemporary challenges such as poverty, unemployment and the impact of globalization, as well as to attain the fundamental goal of promoting social justice, the broad strategic objectives of the ILO should be listed according to priority. First, as the highest priority, employment generation and poverty alleviation in the light of information in the World Employment Report as well as the recommendations of the World Summit for Social Development. Second, principles and standards including protection of workers, conditions of work, occupational safety and health, promotion and progressive attainment of labour standards in accordance with levels of development and socio-economic conditions prevailing in each country and the promotional implementation of the Declaration of Fundamental Principles and Rights at Work. Third, enhancing social dialogue with a view to achieving greater economic efficiency accompanied by full and productive employment and social justice. To achieve these objectives, the tripartite partners in the ILO should focus increasing attention on the problems of the unorganized or informal sector workers, as well as small and medium-scale enterprises, which constituted the largest component of the workforce the world over, particularly in developing countries. In view of the situation in developing countries he asked the Workers' group to reconsider its position taken earlier on this matter.

44. The ILO should regard national capacity building as a principal instrument in utilizing its means of action to promote these three fundamental objectives, which, in turn, would require a strengthening of the ILO's technical cooperation efforts in several areas. Firstly, through developing programmes on employment generation and poverty alleviation, human resource development and training, enterprise development, more effective use of the informal sector, and self-employment promotion. Secondly, through effective coordination between the ILO and the Bretton Woods institutions of programmes that promoted employment, social justice and the development of social safety nets. Thirdly, through strengthening the ILO's capacity for independent analysis of labour trends worldwide, with the objective of promoting employment as well as measures to protect workers.

45. The new budget structure unfortunately made it difficult to isolate the components of the budget earmarked for technical cooperation activities and there should be more specific information in this regard provided in the Office's document for the March 1999 Governing Body meeting. The Programme and Budget proposals for 2000-01 should also allow for flexible allocation within broad clusters, without going into subprogramme details. There should be close consultations between the Office, the Director-General elect and all constituents as budget documents were drawn up for the March meeting.

46. Turning to Appendix I of the budget document concerning the ILO's broad strategic and operational objectives, he commented that the enumeration of strategic problems under the first cluster of democracy, social justice and development reflected a rather narrow and limited approach. Although the importance of the ILO's fundamental principles was universally acknowledged, the prescriptive position taken by the Office was somewhat rigid. The achievement of these objectives did not merely depend on applying fundamental principles but on promoting development, poverty alleviation and employment and social justice, while also taking into account the specific circumstances relating to the levels of socio-economic development in each country. What the ILO was addressing under the rubric of democracy and social justice was the progressive achievement of labour standards as benchmarks in the process of development and the attainment of higher living standards, and not some magical formula which translated into equity and social justice overnight. Similarly, the listing of operational problems and objectives under this cluster offered no recognition of the diversity of the socio-economic conditions and levels of development, rendering it out of step with the ILO Constitution and the Declaration of Philadelphia.

47. There were several points concerning the proposal to set up a bureau for the follow-up on the Declaration that required clarification. More specific details should be provided on the composition of the bureau, the departments and divisions from which its personnel would be drawn, its mandate and its terms of reference. The character and composition of the bureau should ideally be determined by the promotional nature of the Declaration, so it should be a multidisciplinary body with experts in technical cooperation, industrial relations and labour administration. Furthermore, the bureau should be responsible for ensuring the strictly promotional implementation of the follow-up and made fully accountable for this work. Lastly, the Office should provide details on promotional activities emanating from the follow-up and how these activities would dovetail with activities under technical cooperation and the Active Partnership Policy.

48. The representative of the Government of Sweden expressed support for the statement by the IMEC spokesperson. Committee members might wish to reflect that activities at the heart of the ILO's mandate, such as job creation, social protection, tripartism and social dialogue, were highly relevant and important in a world with identifiable and organized labour markets, yet according to the World Employment Report, out of a world labour force of 3 billion people, roughly 1 billion were underemployed or unemployed. Rather than discuss problems in the industrialized world and the developed segments of the developing world, it might be more appropriate to observe a few minutes of complete silence so that the Governing Body could reflect upon the extent to which the ILO's work and these budget proposals really addressed the plight of those 1 billion workers -- men, women and children -- who were among the working poor and the poorest of the poor.

49. The representative of the Government of Finland supported the statement made on behalf of the IMEC countries and thanked the Office for its efforts to improve the overall transparency and strategic value of the preliminary programme and budget. The importance of high-quality could not be overemphasized if the ILO was to remain competitive, but in view of the wide range of priorities the fact was that available resources would have to be distributed somewhat thinly over a wide range of activities. This difficulty was painfully visible in operational objective 3(a), as one might ask what standards were not basically related to the protection of workers. However, a global organization with a mandate on the world of work had a lot to do and little could be neglected. Turning to paragraph 143 on action programmes, he expressed support for programmes 1, 4, 8, 5, 16, 20, 23 and 7. Regarding the technical meetings mentioned in paragraph 147, he expressed support for Nos. 4, 5, 6, 10, 7, 11 and 12.

50. The representative of the Government of Bangladesh supported the views expressed by the spokesperson for the Asia-Pacific group. He also congratulated the Office on presenting a transparent and informative document for the Programme and Budget proposals for 2000-01. These proposals would contribute to the reinforcement of the ILO's constitutional principles relating to fundamental rights and tripartism and clearly demonstrate the ILO's goodwill and determination to institutionalize fundamental workers' rights and ensure social justice at the workplace. They would also highlight the noble role that the ILO played as a social conscience in the world of work.

51. The proposed action programmes should address the serious socio-economic problems emerging from globalization by promoting youth employment, and reducing unemployment and redundancies likely to be caused by the severe competition resulting from economic globalization. He further stressed the need for efforts aimed at creating employment and developing skills through vocational training and vocational guidance, and at making greater strides towards promoting more and better jobs for women. The programme to streamline the capacity of employers' organizations to improve workplace employment relations deserved more support, and he emphasized the urgency of taking priority initiatives to help revamp workers' organizations to promote the spirit of constructive trade unionism.

52. The representative of the Government of Poland expressed appreciation for the Office paper and he supported the three strategic objectives which would form the basis of the ILO's work during the next biennium. The estimated allocation of funds to these objectives was in line with agreed priorities, although a zero growth budget would in effect mean a decrease in available resources because of inflation. A careful examination of the cost-effectiveness of each operational programme would therefore have to take place when deciding on the programme priorities including the allocations to technical and regional programmes. The first strategic objective was of particular importance to the countries in transition and the countries of Central and Eastern Europe, particularly operational objective 1(c), and it was encouraging to see that several forms of technical assistance were planned, including help in devising employment strategies and the training and information activities directed to workers' organizations. He expressed full support for the proposed allocation of one-third of the resources foreseen for the whole of Strategic Objective No. 1 to this category. Even so it was doubtful whether there would be enough funds for regional and interregional research, as well as information and learning networks, as these activities were very expensive and would require not only a rather high initial investment for equipment but also continuous financing for their operation. It might be possible for these activities to benefit from the expertise of the strong, well experienced trade unions in industrialized countries.

53. The second strategic objective dealt mainly with the problems related to increasing employment opportunities. The first operational objective was the largest in terms of allocation of funds, but it was not clear whether there would be enough money to provide financing for all the activities described in paragraphs 79, 80 and 81 of the proposals; perhaps the plan was too ambitious. Employment and investment policies and the training of workers were the most important tools in fighting unemployment and deserved higher priority. Yet it would be necessary to distinguish between what was achievable through the regular budget financing and what additional, external resources would be required and from where. The same reasoning could be used in favour of more regional cooperation projects similar to the TCDC (technical cooperation between developing countries) schemes already operating successfully. The Government of Poland would be ready to assist and accommodate such projects directed to Central and Eastern European countries, which could be considered under operational objective 2(f) in dealing with the ILO's influence on global and regional policy development related to employment.

54. The third strategic objective dealt with the protection of workers. Referring to the social security systems dealt with in 3(b) the provision of technical support in establishing social security schemes and the planned collaboration of the ILO with other specialist international organizations was most appreciated, and his Government was again ready to assist either in providing training for those involved in designing and operating national security systems or in providing the physical facilities for future regional programmes, projects, seminars, workshops or other meetings.

55. In conclusion, he expressed satisfaction that the proposals would reflect not only the ILO's special role in following up the Beijing and Copenhagen Summits but also the priorities for activities at the heart of the ILO's mandate. The final Programme and Budget proposals for 2000-01 should take full account of the observations made by the industrialized market economy countries (IMEC).

56. The representative of the Government of Brazil expressed satisfaction with the Programme and Budget proposals for the 2000-01 biennium. Despite the zero growth constraints the highest priority should be given to the substantive programmes, especially technical cooperation activities, that were of greatest value to developing countries. The programme and budget for 2000-01 should be flexible enough for the new Director-General to implement the policies and priorities of his administration and to take into account the conclusions that would arise from the discussions of his first Report to the 1999 International Labour Conference. Among the other strategic objectives of the ILO, he attached special importance to the promotion of employment and social protection, especially in programmes concerning youth employment and equal opportunities for women.

57. The Declaration on Fundamental Principles and Rights at Work was one of the key elements in the programme and budget, especially the associated promotional and technical cooperation activities. In principle, he supported the proposed establishment of a special office to coordinate the different activities inherent in this follow-up process but it would be useful to have a document at the next session of the Governing Body giving more detailed information on the functioning and the structure of this office.

58. Turning to paragraph 143, he expressed support for action programmes 1, 2, 3, 4, 6, 8, 12, 14, 19, 20, 21 and 23. From the technical meetings in paragraph 147 he expressed support for Nos. 1, 5, 6, 8, 10, 12 and 13.

59. The representative of the Government of Ukraine expressed appreciation for the Office paper. The proposals reflected a zero real growth regime, which was in the interests of all member States of the ILO. The three strategic objectives were clear and logical and would facilitate the discussions next March. He expressed support for the programmes on tripartism and social dialogue, as well as policies and practices to promote job creation and provide for worker protection. In the course of time these strategic objectives could be refined to take greater account of the interests of individual countries and regions. His Government was particularly interested in a special programme for the social rehabilitation of those affected by the disaster as a result of the disaster at the Chernobyl atomic power station and hoped that this particular programme would be given adequate resources.

60. The representative of the Government of Germany fully associated himself with the statement by the representative of the IMEC group, and expressed gratitude to the Office for the way in which it had presented the new budgetary framework. There was however a small printing error in paragraphs 8 and 142, which should refer to zero nominal growth, rather than zero real growth. In order to begin work so that follow-up to the Declaration could be operational in 2000-01, there was a proposal to establish a special bureau. Ideally it should be responsible for the widest possible spectrum of tasks related to the Declaration so that this work could be handled in the most efficient manner. For the same reason it might be better to amalgamate the administration at the ILO field offices and MDTs where possible. In several locations they shared premises but had separate structures and management, so considerable savings might be achieved if they were merged.

61. For vocational training activities the ILO should improve its cooperation with UNESCO so as to avoid wasteful duplication of effort. The ILO should also take advantage of every opportunity to show the quality of its work throughout the world. He recalled a suggestion in March 1998 that the ILO take part in the world exhibition, EXPO 2000, to be held in Hanover in two years' time. Plans included a theme park on employment, the future of labour, which would be an ideal platform for the ILO. In October 2000 there would also be an event called a "global dialogue", and it would be appropriate for the Director-General to attend if possible. Participants would be expected to make their own contribution to the costs of the event but this should not prevent the ILO from participating.

62. Turning to paragraphs 143 and 147, he expressed support for Action Programmes 1, 5, 6, 7, 14 and 23 and for Technical Meetings 2, 3, 4, 7, 10, and 15.

63. The representative of the Government of Panama, speaking in his capacity as coordinator of the Americas group, expressed support for the new budgetary framework which gave greater clarity and detail through the presentation of strategic and operational objectives. They also supported the proposal to ensure sufficient flexibility in the Programme and Budget proposals for 2000-01 to allow the priorities of the incoming Director-General to be recognized. As far as the priorities and guidelines in the follow-up to the Declaration were concerned, the nomination of experts should not create a duplication of efforts with the structures already in place in the ILO. He also congratulated the Office for its work in offering a wide range of options for consideration by the Governing Body, and requested that the document to be considered at the next session of the Governing Body take full account of the views expressed by this Committee.

64. The representative of the Government of the United Kingdom expressed gratitude to the Office for its efforts to address the concerns of member States that the budgetary process should be reformed. He expressed full support for the statement by the Canadian representative on behalf of the IMEC group, and although the fine detail of one or two of the strategic and operational objectives set out in the paper might be questioned, he very much welcomed the overall structure of the document setting out strategic and operational objectives. It represented to a great extent the status quo, as could be seen from the table in paragraph 13 of the paper, but this was both prudent and sensible given that the ILO was in a period of transition. The programme and budget for the next biennium should be sufficiently flexible to allow the priorities of the Director-General elect to be reflected, because it was he after all who would have the ultimate responsibility for implementing the programme and budget for 2000-01. A mechanism should be put in place to allow these essential consultations to take place between now and March 1999. Once this process was complete there should be a significant transfer of resources to priority areas.

65. The United Kingdom Government strongly supported the four policy areas identified in the IMEC statement, namely the follow-up to the Declaration on Fundamental Principles and Rights at Work, quality employment, social protection, and social dialogue and labour relations. The first of these together with the Director-General's proposal for a special bureau would be discussed in the Governing Body the following week. It was vital that the ILO's programme and budget proposals reflected the importance of making a reality of the principles and rights contained in the Declaration and that they allocated sufficient budgetary resources to programmes concerning child labour. Furthermore, they should show a strong focus on stimulating job creation and on educating and training people to obtain and retain employment. He noted the overwhelming support for this policy direction already expressed by the Employers, the Workers and several member States.

66. Social safety nets were an important part of social protection, and the financial crisis of recent months had illustrated the enormous difficulties caused by the lack of underpinning social protection systems and active labour-market policies to get people back to work. Tripartism, the cornerstone of the ILO, should be strengthened by inviting partners in the rest of the UN system, the multinational companies and civil society to take part in a dialogue and contribute to ILO strategic objectives. Paragraph 8 of the Office paper referred to a zero real growth budget. However, for planning purposes at least, the Office should base its proposals on a zero nominal growth budget, given the low rate of inflation in Switzerland and the high percentage of ILO expenditure in Swiss francs.

67. The main purpose of this discussion was to decide what information would be required for the discussion on the Programme and Budget proposals for 2000-01 at the next meeting of the Governing Body in March 1999. The IMEC statement had already requested a document containing indicative allocations for four strategic programme blocks plus one for administration and policy organs, and also a second document or annex based on the traditional programme and budget document. Ideally, the budgetary process should in future be driven by the first of these documents, with the second document, based on the traditional budget presentation, as a comparison between various biennia. Once the process of strategic budgeting was fully bedded down in the ILO the second document would become obsolete and superfluous to requirements. As a final remark he again expressed appreciation for the Office paper and would look forward to receiving the detailed Programme and Budget proposals for 2000-01.

68. The representative of the Government of Argentina also expressed appreciation for the Office paper which was a major step forward in the budget process. Many speakers had called for greater clarity and fuller detail in the presentation of priorities and activities, and this should produce more flexibility and make it much easier to make adjustments in the programme and budget proposals at the Governing Body session next March and during the 1999 Conference in June. Follow-up to the Declaration on Fundamental Principles and Rights at Work would be an important activity in the next biennium and stated that he had no substantive objections to the proposal to set up a Bureau whose functions should consist in coordinating and organizing this work. In view of the far-reaching implications of this follow-up for both policy and operational work in the ILO, this new bureau should report direct to management at the highest level.

69. The formulation of strategic objectives in the document was not completely clear and was inconsistent in parts. The IMEC group's proposals were clearer and more logical, so it would seem more appropriate to adopt their formulation. He also expressed full support for the fourth strategic objective on social dialogue and labour relations contained in the IMEC proposals. For the action programmes described in paragraph 143 he expressed support for Nos. 1, 2, 5, 9, 12 and 14. For the technical meetings in paragraph 147 he expressed support for Nos. 4, 6, 7 and 10.

70. The representative of the Government of Italy associated himself with the statement by the Canadian representative on behalf of the IMEC group. He expressed particular support for the first of the four strategic programme blocks on fundamental rights and principles at work, which would include programmes on child labour and follow-up to the Declaration. Paragraph 30 of the Office paper stressed the need to mobilize extra-budgetary resources to finance the technical cooperation work in the follow-up to the ILO Declaration on Fundamental Principles and Rights at Work. The Office paper also described proposals to modernize ILO computer systems. In common with a number of previous speakers he objected to the proposal to establish a special extra-budgetary fund to finance this expenditure. New proposals had since been put to the Committee and deserved further study so this subject could be considered again at the next session of the Governing Body. As a final comment, rather than create a new department it would be more appropriate to appoint a high-level official to oversee the follow-up to the Declaration on Fundamental Principles and Rights at Work.

71. The representative of the Government of Egypt fully endorsed the statement by the Algerian representative on behalf of the African group. The ILO had to devise new strategies and orientations to meet the many challenges it faced. In view of the level of unpaid contributions and the drop in extra-budgetary funds it was clear that resources were limited. The ILO should therefore concentrate on improving the conditions of workers and alleviating poverty, taking into account at the same time the social repercussions of globalization. The zero growth regime proposed for 2000-01 would make it extremely difficult if not impossible for the ILO to meet the challenges ahead. More funds should be found for priority activities and the Office should continue its search for savings wherever possible. The Office paper pointed out that technical cooperation activities would play an important role in follow-up to the ILO Declaration on Fundamental Principles and Rights at Work. However, technical programmes had been granted only modest increases and further allocations would be necessary to ensure that follow-up activities were effective. Another proposal concerned the establishment of a Bureau to be responsible for follow-up work, but it was not at all clear whether it was really necessary and the money would be better spent on promotional and technical assistance programmes of wider benefit. It would probably be more effective to monitor follow-up to the Declaration under the Active Partnership Policy. In the light of economic and social problems in many parts of the world it seemed that the level of resources for the ratification of Conventions and labour standards for workers' protection was too high. Resources for poverty alleviation and the improvement of workers' conditions were already insufficient and should not be subject to further cuts.

72. The Programme and Budget proposals for 2000-01 should give more attention to programmes related to poverty alleviation and increasing job opportunities because failure to do so would endanger the rights of workers. As well, proposals relating to the main regional programmes should aim at strengthening the active partnership policy. The increase of 10 per cent in total extrabudgetary resources for technical cooperation activities was welcome evidence of the resource mobilization strategy, but this commitment should be reflected in other areas as well. For example, the structure of the MDT covering the five North African countries alongside Sudan should be strengthened, and more resources should be allocated to IMEC as a priority programme.

73. Tripartism was a fundamental concept in the ILO and played an important role in helping to strengthen democracy, create jobs, alleviate poverty and protect workers, as well as improving dialogue between the various organs of the Organization. It should also play a greater part in achieving gender-equality and improving workers' protection and social security. Since many African countries were undergoing structural adjustment programmes there should be more emphasis on programmes aimed at improving economic growth and productive labour opportunities. All of these suggestions naturally had financial implications. Preliminary studies should be carried out to see what could be achieved under the zero-growth regime with a view to putting forward firm proposals at the next session of the Governing Body. The strategic objectives in the programme and budgeting process should concentrate on employment generation and the alleviation of poverty, democracy and human rights, and workers' protection. She expressed support for the action programmes listed by the Algerian representative on behalf of the African group, and listed as technical meeting priorities Nos. 1, 4, 5, 6, 8, 12 and 13 from those described in paragraph 147 of the Office Paper.

74. The representative of the Government of France expressed appreciation for the Office paper, and associated himself with the remarks of the Canadian representative as spokesperson for the IMEC group. Of the four strategic objectives described in the IMEC statement it was only the last that differed from those in the Office paper but they were still quite compatible. For most member States the follow-up action on the World Summit for Social Development in Copenhagen covered almost all fields of the ILO's competence and expertise, but particularly activities concerning the generation of employment. The ILO Declaration on Fundamental Principles and Rights at Work and its follow-up was a new but important activity for the ILO. However, it was not clear whether a new bureau was necessary for the follow-up work but in any case it was not the best solution. Observing that there would be a further opportunity to discuss this matter the following week, he said that the level of the budget was not an end in itself and he hoped that it would take full account of the priorities agreed by member States. Referring to the action programmes listed in paragraph 143 and the technical meetings listed in paragraph 147, it was difficult to rank them in order of priority at this stage and it would be preferable to reconsider them at a later date.

75. The representative of the Government of the United States joined previous speakers in welcoming the Office's response to concerns about the need for reform of the budgetary process. The Office paper made tremendous strides towards meeting the Governing Body's request for a budget presentation with a more targeted format which clearly showed ILO programme activities in the context of the strategic objectives and sub-objectives they were designed to fulfil. They applauded the Office's proposal to put specific objectives, outputs and measurable indicators of achievement into the programme and budget being prepared. He expressed full agreement with the observations of the Canadian representative as spokesperson for the IMEC group on this document and the programme and budget related events to take place next year.

76. In the context of the Office paper, the promotion of fundamental rights at work was of such basic and critical importance that it should stand alone as a strategic objective. Similarly, the promotion of social dialogue, which incorporated tripartism, could stand alone as a strategic objective.

77. The United States Government strongly supported the ILO's standards- related activities and found it wholly appropriate that the document before the Committee acknowledged the need to fund fully the follow-up mechanism to the ILO Declaration on Fundamental Principles and Rights at Work adopted at the last Conference. However, the specifics of that follow-up mechanism were not appropriate for consideration by this Committee and should be left for the Governing Body to deal with the following week. In the meantime, it was critical for this Committee to specify that the Programme and Budget proposals for 2000-01 should include adequate resources to fund fully effective follow-up activities to the Declaration. He also expressed strong support for ILO technical assistance as a key means of fulfilling the ILO's mandate and was pleased to see its incorporation as a key tool for achieving the proposed priority objectives. However, there was a need for ongoing, objective monitoring and evaluation of the ILO's technical assistance activities and the active partnership policy to ensure the efficiency and effectiveness of both the ILO's activities and its delivery system.

78. Concerns continued among Governing Body members regarding the rationale for and effectiveness of the current field structure of regional offices, area offices and MDTs and it was good to see that the Office planned to review the organization and coverage of field structures. However, before such a review, and pending consideration of the ILO's technical cooperation activities by the Conference in June 1999 it would be premature to endorse the establishment of two or three additional multidisciplinary teams.

79. It was a matter for dismay that in spite of some of the progress achieved, the Committee was faced with the prospect of having no analysis of the effectiveness or usefulness of programmes in the current biennium. This meant that there was no objective basis on which to decide how to re-align resources among competing priorities for 2000-01. The proposed action programmes and meetings presented for consideration could therefore not be properly evaluated in the vacuum in which they were presented. From the summary text provided, they all appeared to have merit.

80. What was missing was a report on the effectiveness of those programmes contained in the list which had already been initiated, and the Office's view of the relative importance of each programme and meeting in achieving the ILO's overall priority goals. The Governing Body was being asked to make important choices based on "gut feelings", or, worse yet, political biases. A better approach would be to consider them at the next Governing Body session with additional data and in relation to other programme proposals and the revised strategic objectives they were intended to help fulfil. One exception to that would be the proposed Meeting of Experts on Workers in Situations Needing Protection. This meeting would respond to the resolution adopted by the Committee on Contract Labour at the 1998 Conference, which called for a meeting of experts to examine issues considered by that Committee and to develop recommendations with a view to a further standard-setting discussion on this subject by the Conference in 2002.

81. The four Office-wide objectives aimed at promoting the effectiveness and visibility of the ILO were important and necessary as it sought to consolidate its role in the international community. Ongoing monitoring and evaluation of ILO programmes and delivery systems were essential to ensuring relevance, quality and efficiency. It was pleasing to see an emphasis in Office-wide Objective A on ensuring that ILO principles, policies and programmes were well known. To that end, the draft programme and budget proposals to be considered at the next session of the Governing Body should spell out a coordinated approach to public relations and fund raising. The ILO badly needed a coordinated public relations strategy to market itself -- not to its traditional constituents, but to law-makers, policy-makers and influential interest groups. The field should play a key role in a strategy mapped out in Geneva.

82. In a similar vein, inasmuch as the programme and budget was expected to remain static, a fund-raising capacity would be critical to the Organization's ability to raise the extrabudgetary resources it needed to fill increasing demands for services. The ILO competed with other international organizations and institutions for public recognition and support, and if it failed it had only itself to blame.

83. With regard to the overall size of the programme and budget, the ILO should live within its means and it should formulate a budget at a level below that of the 1998-99 budget, in other words, less than zero nominal growth. With the financial and economic situation of so many countries still so uncertain, now was not the time to increase assessments by enlarging the budget. Governments were reducing spending; so should international organizations. One should reject the comfortable but counterproductive method of approving budgets based on the status quo.

84. The United States Government remained committed to honouring its current obligations to international organizations, including the ILO. In fact, it was strongly supportive of the ILO -- last month, Congress had appropriated $30 million to fight child labour, almost all of which would go to the ILO's IPEC programme as voluntary contributions. There should be continuing consultations by the Office as it moved forward with the development of its programme and budget proposals for consideration at the next session of the Governing Body, particularly incorporating the views of the Governing Body and, without prejudice to the authority of the current Director-General, the views of the Director-General elect. As a final comment, he expressed appreciation for the very positive steps evident in the document before the Committee, and looked forward to working with the Office and the new Director-General towards a final budget document.

85. The representative of the Government of China expressed appreciation for the Office paper, which had important implications for the ILO in terms of its direction and development in the next century. The influence of economic globalization and technological progress was resulting in major changes in the world of work and the Programme and Budget proposals for 2000-01 should be sufficiently flexible to take account of these changes. He expressed full support for the statement by the Japanese representative as spokesperson for the Asia and Pacific group. In the years ahead the biggest challenges facing the world of work would undoubtedly be employment generation and the eradication of poverty. The World Summit for Social Development in Copenhagen had accordingly set employment promotion as a primary priority for economic and social development in all countries. The ILO had a leading role to play in meeting this challenge but it could only succeed if this became a top priority. It was a matter for regret that in the last ten years or so the ILO had not given sufficient attention to employment promotion and there was some risk that its role in the field would be taken over by other international organizations.

86. Labour protection and the improvement of working conditions had also become an important priority in view of the threats posed by economic globalization and technological progress. There were also many challenging problems in the field of social protection, and the ILO should be in the forefront of work dealing with issues such as pensions, medical insurance and related issues.

87. More than two-thirds of ILO member States were developing countries or countries in transition. The ILO should give the fullest consideration to their needs and to the ways in which they could be assisted with technical cooperation activities. These programmes were of course subject to financial constraints, but the Office should look at ways of expanding these activities through the use of extrabudgetary resources. With regard to the action programmes listed in paragraph 143 he expressed support for programmes 1, 2, 4, 6, 10, 12, 13, 15, 18, 19, 20 and 21. With regard to the technical meetings described in paragraph 147, he expressed support for Nos. 1, 2, 4, 8, 12, 13 and 14.

88. The representative of the Government of South Africa expressed sincere appreciation for the concise and detailed manner in which the Office had prepared the paper before the Committee, which went a long way to meeting the wishes expressed by the Governing Body in March 1998. Developments of the recent past were sufficient to anticipate the ILO's main preoccupations in the new millennium. First, the historic adoption of the ILO Declaration of Fundamental Principles and Rights at Work called for the reordering of priorities in the programme and budget proposals, and in the Office itself, in order to bolster the Organization's efforts in promoting the realization of fundamental workers' rights. Second, the rapid spread of financial contagion across global markets since the onset of the Asian financial crisis 17 months ago had brought to the fore the urgent need to strike a healthy balance between market liberalism and social justice. The programme and budget of the ILO should reflect this reality and deploy sufficient resources to help stem the tide against a potential social peril. Social safety nets should be the pillar of this key objective. The overall strategic orientation of the Organization on this matter should focus on issues of globalization as a whole, in other words their impact on labour and employment. Third, the World Employment Report 1998-99 painted a very grim picture of the world employment situation, particularly in developing countries. More than just responding to this situation, the Organization should assist constituents in their efforts to develop strategies to combat unemployment and poverty.

89. Fourth, the Organization's efforts should be underpinned by a relentless effort to promote and establish genuine tripartism and social dialogue, without which its efforts would be pointless. In the context of social dialogue, the Organization and its constituents could no longer ignore the emergence of a new civil society, which was continuously clamouring to play a role in employment and social policy debates. Indeed, globalization had created a proliferation and diversification of the landscape, and the implications needed to be thoroughly examined.

90. The programming framework should reflect these strategic objectives in a more detailed manner. With regard to the parameters of resources there should be adequate flexibility in the programme and budget proposals to reflect the new Director-General's priorities. It was regrettable that the Programme and Budget proposals for 2000-01 merely reflected the status quo. Many Members had expected to see increased resources for technical cooperation, particularly in the light of recent events.

91. A matter of even more concern was that the current level of resources would be maintained with regard to regional services and operational programmes. Recent experience had proved that existing regional programmes, together with the Active Partnership Policy, were indispensable in achieving the Organization's objectives. The proposed reductions in expenditure for regional programmes should be made in a transparent manner that allowed the affected countries to be consulted. The proposal for the establishment of a bureau to take responsibility for the annual report on unratified Conventions as well as the global report required serious and thorough reflection. There could be no doubt that a project as important as the Declaration would require technical and administrative backup to facilitate the application of follow-up action. However, the Committee should be cautious not to set a precedent for future programmes of the Organization. It should not be the norm to create a special bureau every time the Organization embarked on a major programme.

92. For the next session of the Governing Body to take an informed decision on this matter the Office would have to elaborate on the terms of reference, the scope, and the implications of the bureau for other related programmes. It would also be important to clarify the relationship of the bureau with regional offices, area offices and multidisciplinary teams.

93. With regard to the choice of action programmes it would be expecting too much for the Committee to agree unanimously on 12 of the 23 proposed programmes, and it would have been of great help to the Committee if the Office had proposed criteria that would enable it to make choices. From the action programmes described in paragraph 143, he expressed support for Nos. 1, 2, 3, 8, 10, 12, 14, 18, 19, 20, 21 and 23. For the technical meetings described in paragraph 147, he expressed support for 1, 6, 7, 10, 13 and 14.

94. The representative of the Government of the Republic of Korea expressed full support for the statement by the spokesperson for the Asia and Pacific group. Unemployment in the Asian and Pacific region had increased dramatically in recent months, partly as a result of the process of globalization but mainly as result of economic collapse in some countries. The Twelfth Asian Regional Meeting last December and the High-Level Tripartite Meeting in April this year had focused on the problem of unemployment and on the need for social protection programmes in the region. These issues should now become the top priority for the ILO. This did not mean that other ILO activities were unimportant, only that they should be given less priority at the moment. Stable and productive employment was indispensable if social justice and the protection of basic rights was to be achieved.

95. The representative of the Government of Hungary expressed appreciation for the Office paper and fully supported the statement by the IMEC spokesperson in connection with the formulation of key strategy programme areas. He also expressed support for the zero real growth regime and for flexibility in the programme and budget proposals so that they could take account of the priorities of the new Director-General and of discussions at the 1999 Conference. The development of the strategic and operational objective framework was a positive step forward and he fully endorsed operational objective 2(b), employment-friendly enterprise development policies and programmes.

96. The most important task facing the Hungarian Government in coming years was the creation of jobs and job opportunities. Together with others it placed great emphasis on improving conditions for the operation of small and medium-sized enterprises so that companies could contribute to economic growth and increased job opportunities. Of the action programmes listed in paragraph 143 he expressed particular support for Nos. 1, 6, 8 and 9. Of the technical meetings described in paragraph 147 he expressed support for Nos. 1, 3, 4, 6, 7, 12 and 13.

97. The representative of the Government of Japan expressed appreciation for the new framework for the Programme and Budget proposals for 2000-01. From the statements of the IMEC group and Asia and Pacific group representatives, also from the statements of Government delegates and the Employers and Workers, there seemed to be a substantial amount of common ground on the Programme and Budget proposals for 2000-01. It should not be a difficult exercise for the document to be considered at the next session of the Governing Body to incorporate all the views put forward.

98. Looking more closely at the proposals, strategic objective No. 1 included tripartism and the promotion of social dialogue and cooperation with other international agencies. However, they related to all ILO activities and were not exclusive to strategic objective No. 1, so it would be more appropriate if operational objectives 1(c), 1(d) and 1(e) were transferred to a separate strategic objective. The paper also referred to the establishment of a bureau to deal with follow-up work on the Declaration of Fundamental Principles and Rights at Work. The follow-up work should be a promotional activity and since it would be closely related to technical cooperation programmes a mechanism should be devised to ensure close collaboration between technical cooperation departments and the new bureau.

99. Referring to the Active Partnership Policy it might be appropriate at this point to clarify the roles played by headquarters, the regional offices, the local offices and also the multidisciplinary teams. The proposal to set up a new multidisciplinary team could be discussed during this exercise. She expressed support for the principle of zero nominal growth and also for flexibility in the programme and budget proposals so that they could accommodate the views of the incoming Director-General. Nevertheless, the Governing Body should hold detailed discussions next March in line with past practice, and aim for final adoption of the budget at the June Conference if at all possible.

100. The representative of the Government of Mexico emphasized that the ILO should set as a first priority the promotion and creation of jobs in view of the contribution it would make towards the eradication of poverty. The top priorities for the next biennium should be employment, working conditions, social protection, international labour standards and social dialogue. Resources for technical cooperation and regional activities should be expanded and he welcomed the proposed establishment of two additional multidisciplinary teams as this would strengthen the Active Partnership Policy. He supported earlier statements made by various speakers requesting additional information on the proposal to set up a bureau for the follow-up on the Declaration on Fundamental Principles and Rights at Work, and in relation to the proposed action programmes described in paragraph 143 he expressed support for Nos. 1, 3, 5, 6, 7, 11, 12, 15, 16, 17 and 22. Of the technical meetings listed in paragraph 147 he expressed support for Nos. 1, 3, 4, 8, 9, 10, 11 and 12.

101. The representative of the Government of the Russian Federation expressed appreciation for the Office paper and welcomed the new presentation of strategic and operational objectives for the biennium 2000-01. One of the top priorities for the next biennium should be the establishment and implementation of an efficient mechanism for the follow-up to the Declaration on Fundamental Principles and Rights at Work. It was important to take into account the views of all participants in this discussion and to ensure that the follow-up machinery was adopted by consensus. The Office should also provide additional information on the establishment of the bureau proposed to be responsible for the annual report, which would simplify the search for a solution acceptable to all. Another priority was the promotion of technical cooperation and active partnership which would contribute to improving social dialogue between the tripartite partners, particularly in the process of elaborating country objectives. It was important to revise country objectives, particularly in those countries whose social problems had recently been highlighted by the ILO and other international organizations. In his own country the MDT had, from the very beginning, been integrated into the operational activities of the Office and this had improved organizational efficiency. With respect to priorities for action programmes and technical meetings, it would be better to postpone decisions at present so that the new Director-General's priorities could be reflected in the final proposals. He hoped that the members of the Governing Body would be unanimous in understanding the need for a Programme and Budget for 2000-01 based on zero nominal growth.

102. The representative of the Government of Canada indicated that her delegation fully supported the IMEC statement. However, Canada wished to express appreciation to the Office and particularly to the Director of the Programming and Management Bureau, Mr. Kirszbaum, and his colleagues, for their efforts in producing a programme and budget document in a clear and understandable format which had greatly facilitated this preliminary discussion.

103. Mr. Blondel, speaking on behalf of the Worker members, felt that it would have been useful at this stage to have a presentation by the Director-General to the PFAC on the follow-up to the Declaration, but noted that this was planned for the Governing Body session. He was worried about some statements which seemed to imply that unemployment and social protection programmes should be given higher priority than those related to labour standards. Workers would prefer to see labour standards ranked with the highest priorities because they understood that one of its most important benefits was the promotion of democracy. As a concluding comment, he remarked that the method of deciding on the technical meetings in paragraph 147 was more of a lottery than a genuine attempt to find a consensus. The list of preferences he had provided was an indication and could be modified after more detailed discussion.

104. The Director-General said that the Office had noted all the comments that had been made in the course of the discussion. Immediately after the Governing Body, the services concerned would contact Mr. Somavía and his transition team so that they could prepare all the budget documents for March according to the new Director-General's instructions and the Committee's guidelines.

105. The Director-General hoped that the Governing Body's desire for flexibility during the transition period would not just be a welcoming gift for the new Director-General but a mark of the confidence that it expected to place in him throughout his mandate.

106. Regarding the point raised by Mr. Blondel, the Director-General had stated that he was quite willing to address either the Committee, or the Governing Body the following week. If the Governing Body agreed, he hoped to make a number of suggestions at the beginning of the discussion the following week in order to answer some of the questions that might be raised in advance. He invited the Chairperson and the Governing Body to decide what form his intervention should take.

107. The Committee requested the Office to take account of the views expressed on key priorities in the next biennium, and specifically on the choice of action programmes and of technical meetings to be included in the Programme and Budget proposals for 2000-01.

Geneva, 17 November 1998.

(Signed) S. Marshall,

1. GB.273/PFA/7.

Updated by VC. Approved by RH. Last update: 26 January 2000.