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Bangkok  December 1997

Twelfth Asian Regional Meeting

Report of the Director-General



INDUSTRIAL RELATIONS, WORKERS'
PROTECTION AND GLOBALIZATION

II

Introduction

Together with accelerated technological, organizational and labour market changes, economic liberalization and globalization require emphasis on industrial relations (IR) and workers' protection in facilitating and supporting industrialization and economic develop-ment in Asia and the Pacific.

During the 1990s the new demands of international competition and major advances in technology, together with the move towards greater market orientation in many countries occasioned by liberaliza-tion, have dramatically altered the nature and operation of the "market place" and the way production is organized in many industries around the world. Individual enterprises, as the engines of economic growth and employment, have a critical new role: to innovate in order to provide "the right product or service, at the right price and time".

The most competitive enterprises in the region are developing new approaches to employment relations to meet this challenge. IR is seen as having an increasingly strategic role, and its nature is changing. It is being used by such enterprises to secure better performance, by improving workplace cooperation, to achieve more efficient work organization and to enhance the skills and flexibility of the workforce. In such enterprises and the more developed countries in Asia and the Pacific generally, recognition is growing that such an approach must be supported by closer attention to workers' protection -- to ensure a more equitable distribution of the benefits of growth, to improve the effectiveness with which those benefits are applied and enforced, and to address the needs of special groups.

But so far these developments have not been sufficiently uniform, consistent and balanced across the region to improve the situation of workers to any significant extent. The vast majority of workers in Asia and the Pacific still fall outside formal IR systems, and many have working conditions which are precarious and unsafe. Even for those workers within national systems, the policies, legislation and institutions governing IR and workers' protection have been slow to respond to the demands of the new economic environment. Responses have generally been inadequate, and there are worrying signs of reductions in workers' collective rights and representation. In many countries relations between governments and the social partners have become further strained in addressing issues such as privatization and the increasing incidence of redundancies and atypical forms of employ-ment, arising in the course of the relentless drive for economic efficiency.

These formidable challenges must be addressed if governments and the social partners are to take advantage of the strategic oppor-tunities provided by liberalization and globalization to position the region for a period of continued strong economic growth.

Industrial relations and globalization

Industrial relations in the new environment

Traditional IR has focused on the relationships arising inside and outside the workplace, the processes by which those relationships are expressed (collective bargaining and worker involvement in decision-making), the management of conflict between employers, workers and trade unions when it arises (including the role of formal and informal institutions) and the rights and responsibilities of management and workers, and their representatives. IR has sought to achieve collec-tive outcomes at the national, sectoral or industry level, which are then applied to each enterprise.

But along with globalization, information and process flows made possible by new technology are building inter-enterprise net-works around the world, calling into question the traditional boundaries of the enterprise and eroding current IR collectivist arrangements. New management systems, particularly human resource management (HRM), are being implemented. They are focused at the enterprise level and seek to align the interests of managers, individual workers and groups of workers around certain mutually agreed corporate objectives. These systems emphasize individual relations and are concerned with maximizing workers' commitment, organizational integration, workplace flexibility, efficiency, innovation and quality. This situation calls for a broader perspective on employment relationships and ways to harmonize IR and HRM policies and practices to strengthen outcomes for both. Figure 1 provides a framework for analysing the impact of globalization on industrial relations.

Multinational corporations (MNCs) are the primary driving force for change in the new economic environment. They are creating very complex international production networks which distinguish globalization from the simpler forms of international business integration in earlier periods. As producers of global goods and services, centres of networks and large employers, MNCs have an impact extending far beyond urban centres in the countries in which they are located. Locally based enterprises, too, are responding to this new environment by applying information and process technologies to domestic and international markets in a way which is contributing to a growing individualization and decollectivization of work in many countries.

One overarching consequence of globalization is that managers from investing countries are having to adapt their own national management practices to the circumstances prevailing in different countries. This requires knowledge and sensitivity about legal, IR and human resource (and other management) practices in different cultural environments. Workplace rules, practices and behaviour which apply in one country may not apply or be appropriate in another. Trade unions and workers also need to understand and adapt to changing enterprise (including cultural) practices which may be foreign to them. The growing incidence of industrial disputes in some local operations of foreign-owned enterprises and joint ventures in a number of countries suggests that this process of adaptation is not yet being successfully managed.

On a related issue, "capital" is significantly more mobile in an open international environment, while "labour" remains relatively immobile. This can place "labour" at a relative disadvantage, in that "capital" can now employ "labour" in different countries at lower costs than in the originating country, and on a basis which can preju-dice the continuing employment of workers there (see Chapter I). The growing number of export processing zones (EPZs) exemplifies this. Such zones have created employment opportunities in host countries but while experience varies between countries, trade unions are frequently discouraged or banned, wages are often lower than in similar non-EPZ firms, other kinds of protection (such as workplace health and safety) either do not apply or are not enforced, and the quality and stability of employment and skills development are generally poor.

Globalization is also presenting a more general challenge to the formal IR system: safeguarding working conditions in the face of employers' efforts to improve economic efficiency in response to increased domestic and international competition. The growing incidence of casualization and other forms of atypical employment referred to in Chapter I, as well as workers' increasing concerns about job security and the need for improved workplace safety and health, reflect this situation (the implications for IR and/or workers' protection are dealt with later in this chapter). The more significant challenge for the formal IR system, and an offshoot of the new economic environment, is whether (and, if so, how) to extend the protection of the regulatory framework to the informal sector and otherwise to facilitate and promote its development. IR institutions and processes can help resolve many issues confronting the informal sector, but the specific constraints and needs of workers in that sector would have to be incorporated into the IR institutional and bargaining agenda, and specific attention given to new or improved mechanisms to represent workers' interests. A significant practical issue is whether governments and the social partners are capable of addressing the needs of the informal sector for increased social protection.

Finally, globalization is having a contradictory impact on IR. It is accelerating economic interdependence between countries on an intra-regional and interregional basis and encouraging similarities in approach by individual enterprises in competitive markets. This may lead to some convergence in IR arrangements around the world. At the same time, and reflecting the different circumstances and value systems in the region, there is clear evidence of resistance towards convergence. This is occurring despite the continuing influence of "Western" legislation, institutions and practices on IR systems.

Industrial relations trends in Asia and the Pacific

Although there are exceptions, the main characteristics of the IR systems which have emerged in the region can be briefly summarized as: a high degree of economic commitment by governments to facilitate private-sector-led industrialization; an emphasis on labour relations to prevent or minimize industrial conflict; reasonably comprehensive (but narrowly focused) labour protection and relations legislation, accompanied by relatively weak IR institutions and processes; the lack of strong and independent trade union organizations; and the need for stronger employers' organizations. From an ILO perspective, any sound IR system should be based on the principles and standards relating to freedom of association, and the right to organize and bargain collectively; this is directly connected to the campaign for universal ratification and application of the fundamental human rights Conventions.

There have been some positive recent trends in response to globalization and liberalization, but also a continuation or exacerbation of traditional IR issues in individual countries or subregions. These trends are summarized below.

Recognition of IR as a key to improved enterprise performance. The main imperative now for many enterprises around the region is achieving and maintaining competitiveness. For many East and South-East Asian, and some South-West Pacific countries, quality and innovation are critical. For most countries in transition and a number of South Asian countries, low-cost considerations are most important at this time. Some countries (e.g. in West Asia) will require both forms of response because of different levels of development in particular industrial sectors. Whatever the responses adopted in individual countries, IR reforms and workers' protection improvements are increasingly being seen as fundamental to realizing the changes needed.

Recognition of IR as integral to macro-level policies and planning. A notable feature of the fast-growing Asian and Western Pacific economies in recent years has been the greater link between IR and economic development at the level of macroeconomic policy-making and implementation. There is increasing integration between IR and: education, human resource and training policies (to produce skilled workers); active labour market and immigration policies (to overcome shortages of particular types of labour); tax and broader financial policies (to continue to provide incentives to foreign investment). There are some indications that similar policy approaches are emerging in South Asia, but most countries in that sub-region still exhibit traditional IR policy approaches. It is also notable that the social partners in many countries are not involved to any real extent in policy-making and implementation.

Evolving IR and HRM. In most countries in the region, relations between managers and workers and their representatives are still viewed from the more limited perspective of traditional IR. The scope of IR must now be seen as extending to all aspects of work-related activities which are the subject of interaction between managers, workers and their representatives, including those which concern enterprise performance. But the range of issues emerging around HRM, and cross-cultural management issues, have not until recently been considered as part of labour-management relations. IR in the region will need to address, much more than at present, workplace relations and people-centred issues. It can no longer focus only on collective relations.

In this respect, the most competitive and innovative enterprises in the region (whether they be MNCs or domestic firms) are changing their IR/HRM function from one of the traditional type (mainly focused on providing advice and negotiating and maintaining rules) to one which encourages innovation and is integrated in and supportive of corporate business strategies. In other words, the IR/HRM function is now considered to be as important as, for example, the planning and development, production and marketing functions in an enterprise.

Key characteristics of the new form of employment relations being practised in advanced firms include: job security for key (core) workers, combined with more flexible contracts for peripheral workers; broad and challenging jobs, many based on teamwork; a concern for process improvement and fulfilling obligations to other units/departments in the same enterprise; supervision based on facilitation, not hierarchical control; continuous skills upgrading; individual performance appraisal; a performance-based rewards system; and workers' involvement in decision-making through a formal committee and/or a union in the form of a single bargaining unit.

As more firms begin to consider these issues, which involve increasing attention to linking performance, skills development and payment systems, there will be greater questioning of the continued relevance of minimum wages, where they exist in the region. Minimum wages have traditionally been a policy instrument to provide basic protection for those on lower incomes or to address poverty alleviation. The current debate reflects concerns about both the scope of the minimum wage (it does not protect a major poverty group, self-employed farmers) and inadequacies in minimum wage administration (too much political influence, lack of credible criteria for setting and adjusting wages, inadequacies in data collection and analysis, deficiencies in enforcement). Considerable controversy surrounds the criteria to be applied: from the perspective of increasing international competitiveness and employment, whether a particular increase in a national minimum wage will be too high to maintain or increase investment, or whether increases in labour costs should be offset by productivity gains. A number of countries are still establishing (particularly Cambodia, the Lao PDR, Viet Nam) or are currently seeking to reform (India, Indonesia, the Philippines, Thailand) their minimum wages systems to address some of these concerns. Finally, some employers and their organizations within the region are ques-tioning the need to retain a minimum wage. To date, these arguments have not received wide support from governments.

Increased focus on job security. In recent years, many South-East Asian workers have been enjoying better job security because of increasing labour shortages in the countries involved. However, the downsizing of many enterprises in the region (through the impact of new technology or better to equip enterprises to compete in more difficult market conditions) and economic adjustment programmes in South Asia and elsewhere (involving closure or privatization of state-owned enterprises) have led to a substantial loss of full-time jobs. This has been combined with a growing demand by employers for atypical forms of employment (part-time, temporary and casual employment) and consequential lower entitlements to pay and working conditions. Many workers affected by loss of employment have experienced difficulty finding comparable jobs, limited access to redeployment and retraining opportunities and, in the case of many former civil servants in a number of countries, a reduction in social protection (loss of health care benefits and assistance with housing, education and family welfare). In spite of the pace of development in many parts of Asia, the majority of the new jobs created each year in a number of countries are in the informal sector, which remains beyond the reach (and hence the protection) of the labour legislation in most countries (see Chapter I, "The informal sector").

Modernization of labour legislation. To support these evolving policies and strategies, IR legislation and supporting institutions and rules must be continually reviewed. Labour legislation in many countries in the region reflects an outdated approach based on minimization of industrial conflict. Greater priority should be given to how legislation can be used to establish a framework for managers, workers and trade unions to pursue improved productivity and flexibility on a participative basis, while still providing appropriate protection for workers and a share in the benefits of growth. In this process, attention must be given to who is covered by labour legis-lation. For adequate protection to be provided to all workers, they must first be covered by legislation. In many Asian countries legis-lation emphasizes the role of industrial workers; but rural agricultural workers, workers in domestic service, casual and contract labour, workers in shops and other small businesses, and special groups (child workers, workers with disabilities, foreign workers) are either ex-cluded from the legislation or their position is ambiguous. Dispute settlement machinery (including processes and administration) also needs to be made more effective in a number of countries, emphasizing the prevention of disputes through greater workplace cooperation. Some countries in the region have already attempted to reform labour legislation in these directions in recent years, and others are considering similar action. The relevant international standards should be a source of inspiration.

Limited tripartite cooperation. Though the principle of tripartite cooperation appears to be accepted in most parts of Asia and the Pacific, it cannot yet be said that most governments view the process as an essential part of their relations with the social partners. While a number of countries have long-standing and effective arrangements in this area, others are struggling with giving effect to the principle. For countries in transition, understanding of the concept and its application in practice are still at an early stage of development.

A number of important factors still limit the effectiveness of tripartite cooperation in the region. On the part of governments, these include: not integrating tripartite consultation in all issues related to national planning and development; a lack of political will to make the process work (failure to consult, lack of follow-up on agreed matters); policy and legislative restrictions on the role of workers' and employers' organizations; and technical impediments to and inadequate resources for the effective operation of consultative or other tripartite bodies. Workers' and employers' organizations are still handicapped in tripartite processes by such issues as their relative weakness vis--vis governments (in terms of their personnel, technical and organizational capacities); their lack of representativeness; the lack of coordination of views with other trade union federations or employers' organizations; the politicization of trade unions (particularly in South Asia); and the lack of organized and continuous bilateral relations.

Weak bipartite relations and workers' involvement in decision-making. In many countries little emphasis has been given to building strong bilateral relations between managers and workers/trade unions. While attempts have been made to institutionalize workers' involvement in decision-making in several countries (e.g. through legislation requiring the setting up of labour-management committees), these institutions have not worked satisfactorily. There has been too much emphasis on form, not substance. As noted previously, the competitive pressures exerted by globalization are resulting in more emphasis on improved workplace relations (through increased bipartite consultation and cooperation) and higher-level contributions to enterprise performance from workers. There is, therefore, room for greater optimism. A critical issue will be the extent to which trade unions can enhance their profile and influence through this process.

Declining trade unionism. Union density has never been a strong feature of industrial relations in the region. Asian trade unions fall considerably behind their European counterparts in this respect, though a number of national trade union movements and individual unions exercise considerable political power and influence. Restrictions on union formation in certain sectors or in EPZs, legislative and practical restrictions on bargaining, and workers benefiting from growing economies and rising real wages, have generally combined to dampen interest in union activism and membership. This situation is compounded by the reluctance of many domestic employers and MNCs to meet their employment obligations fully, and by the fact that trade unions cannot rely on governments to enforce labour legislation effec-tively. It is also disturbing to note that the fastest-growing sectors in many Asian economies (textiles, clothing and footwear, and electronics, particularly those firms in EPZs) either have only a limited trade union presence or are union free.

Decentralization of bargaining. This is occurring, particularly in the export-exposed sectors of national economies, as a result of increased emphasis on lower-level bargaining (especially at the enter-prise level), moves towards higher wage flexibility, and the growth of enterprise unions. But only limited progress has been made in relation to collective bargaining in the public sector, and there is a growing incidence of individual bargaining in some countries. It is also difficult to gauge whether there has been an increase in the level of collective bargaining in the region in recent years, and in the quality of outcomes in terms of its contribution to improved enterprise performance. Moreover, it is clear that the collective bargaining process still needs to be strengthened in many countries through appropriate legislative changes.

Developing a more effective response

There is limited research that discusses the impact of globalization on industrial relations in Asia and the Pacific. Much more needs to be done in this area to assist governments and the social partners in understanding the new economic environment and in framing their responses.

Implicit in the discussion earlier in this chapter is the need for countries to develop labour market arrangements which are not overregulated (which would constrain their flexibility and capacity to compete in the global market place), but which at the same time provide adequate protection to workers and enable them to share in the benefits of enterprise development and growth. If these twin objec-tives of "efficiency" and "equity" in employment relations are to be achieved in the region, certain fundamental changes in the roles of governments and the social partners will be necessary.

First, increasing decentralization of IR (resulting from the need for enterprises to become more flexible, productive and competitive) implies that governments must devolve more power and responsibility to managers and workers at the industry and enterprise levels to enable them to resolve issues of direct concern at the workplace. This means that the traditionally strong role of the State in the region will increas-ingly be called into question. It will also place much greater demands on individual enterprises, and reinforce the requirement for strong and effective workers' and employers' organizations which have the capacity to respond to members' needs (see below).

Second, the values of the "actors" in the IR system will be sub-ject to closer scrutiny in the future. Equity and stability in IR can only be delivered by the parties themselves although, as shown by the ILO standards on freedom of association and the right to organize and bargain collectively, governments have an important role to play in creating a healthier IR environment. In addition, standards on tripar-tite consultations (especially Convention No. 144, and also Recommendations Nos. 113 and 152) provide a firm basis for progress in this area. In particular, there will need to be a reaffirmation of freedom of association, the rights of workers, and pluralism. This will require increased attention in some countries to promoting the role and legitimacy of trade unions and other workers' representatives. Issues such as eliminating forced and child labour and reducing (and even-tually eliminating) discrimination in the workplace will also have to be given much higher priority. In this context, the role of international labour standards in guiding the parties towards appropriate policies and strategies will continue to be very significant.

There are a number of specific responses which the parties can make to facilitate and support the changes required to the framework and operation of each country's IR system.

The role of governments. Globalization requires governments to make policy changes which they may not otherwise wish to make, and to that extent they have less control over economic planning. This does not necessarily mean, however, that the role of the State in IR becomes less important under globalization, merely that its role is different in certain areas. Traditional, but improved, interventions will be required at the policy and legislative levels to establish and enforce minimum employment standards and to provide a means of settling industrial disputes. A new emphasis will be needed on greater flexi-bility in enterprise-level arrangements. New forms of institutional intervention may also be required (retraining schemes, job search assistance), given the types of changes taking place in the organization of production and work at the enterprise level, and the fact that there is likely to be greater mobility between jobs and enterprises (see Chapter I, "Human resource development", for a discussion of these issues).

Individual firms (both MNCs and domestic operations) can also be encouraged (through, for example, "best practice" programmes) to experiment in relation to skills development, work organization and other forms of improved IR/HRM practices. Governments can seek to use the outcomes as a basis for broader government or industry programmes to diffuse new practices on a wider basis. Encouraging management and workers, and their representatives, to develop and promote "model" collective agreements, covering the same areas, is another useful strategy.

Globalization leads to expansion and contraction in various industry sectors and to competition between developing countries for investment (through EPZs, or more generally). The position of workers is, therefore, more vulnerable. Certain minimum conditions of employment are necessary to redress workers' relative inequality in bargaining power with employers. This will require rights to associate, organize and bargain collectively with employers; prohibition of forced and child labour; and protection against discrimination in the workplace (see "International labour standards and human rights", below). Governments have a responsibility to ensure that these standards are met by all employers, including foreign companies and MNCs.

Finally, governments should continue to promote bipartite and tripartite institutions and processes to establish appropriate labour policies and standards. Inputs from all relevant parties should be considered. Not only will this limit potential conflict in the future (particularly where major business and investment interests -- including those of MNCs -- are involved), but it should also establish a sound basis for investment, economic and employment growth.

Responses by employers and their organizations. Many Asian and Pacific entrepreneurs -- small, medium-sized and large -- have relied on the low cost of goods and services and speed of delivery as the core of their competitive advantage. They now need modern management styles and strategies, which incorporate traditional cultural values (such as respect for authority and experience) and the views and experiences of workers in day-to-day decision making, within an approach emphasizing innovation, by equipping workers with increased technical capacity (through skills development) and by encouraging experimentation. Culturally sensitive management must also be applied, as companies invest within and beyond the region.

MNCs will continue to have an influential role in shaping local corporate cultures. Their policies, practices and technologies influence domestic enterprises, directly (as a role model or through requiring certain practices from their suppliers) or indirectly (by raising wages and conditions of employment, and improving workers' skills). Local firms will also have to develop initiatives to improve their responses to increasing competition, through informal contact with the wider group of firms with which they do business, and their own bench-marking exercises.

Employers' organizations, like trade unions, face a difficult situa-tion in assisting their constituents to face the new demands of globalization. Not only must they become more representative (by recruiting new members from a broader cross-section of the business and industrial community) but, like unions, they confront very different situations from country to country and differ in their capa-cities to fulfil their functions effectively.

A key function of employers' organizations has always been to seek to influence the broad policy environment in a manner conducive to their constituents' interests. Although this role will remain significant, their ultimate credibility will be determined by their capacity to provide services which enterprises need. Considerable emphasis is now being given within the region to developing employers' organizations as strong professional organizations. Priority is being given to strategic planning; developing direct services to members (advisory, negotiating and training) across a range of issues (labour law, IR/HRM, labour market information, HRD); and building the necessary internal capacities to deliver these services (knowledgeable, well-trained technical staff, supported by sophisticated research and information databases).

Responses by workers and their organizations. There is a need for more effective unionism, that is, a proactive and strategic form of unionism which enables trade unions to participate in strategies for improving enterprise competitiveness and the quality of work, by emphasizing skills development and changes to work organization and labour-management relations, and producing an equitable share for workers in productivity gains. Effective unionism is not limited to the workplace and requires activities at the industry, national and inter-national levels to promote initiatives and secure support. The develop-ment of effective unionism (and, indeed, of trade union movements everywhere) is contingent on the recognition and application of the rights of freedom of association -- to organize and to bargain collectively.

Strategies under effective unionism are directed at ensuring an equitable distribution of the results of economic progress: preventing the exploitation of workers by continuing to pursue fair wages and conditions for their members; supplementing inadequate state regula-tion of employment relations; having a role in improving productivity and in increasing workers' responsiveness to change; and promoting greater adherence to fundamental workers' rights in the conduct of international trade and investment.

Strategies in developing effective unions will vary from country to country. For example, awareness raising and training as regards their role in a market-oriented economy will have a much higher priority in the case of trade unions in countries in transition. But whatever the individual country circumstances, the key objectives of national trade union organizations must be to attract more workers into unions by improving recruitment, offering better services and communicating more effectively with and between members and officials. Strong leadership from trade union centres and their agreement and coordination on priority strategies are critical. To maintain support and influence at the enterprise level, it will also be necessary to build and maintain an active workplace union organization. The availability of more skilled and technically capable union representatives in the workplace, supported by more professional and better resourced unions at higher levels, will be crucial in achieving these objectives.

The extent to which trade unions can adopt and achieve advances through this more proactive role will depend on a number of considerations, including government policy, legislation and attitudes at the national and international levels, the responses of employers and their organizations, and union leadership, organization and strategies. Given the considerable difficulties still facing trade union movements in Asia and the Pacific, additional legislative and promotional measures will be needed to recognize labour and provide it with a voice at both the enterprise and the national levels, and to afford better protection for workers' representatives in undertaking their functions.

International labour standards and human rights

In today's changing industrial relations environment, international labour standards are playing a major role in shaping developments worldwide. They provide an enabling framework, permitting workers and employers (and governments, where applicable) to develop employment relations in a sound and equitable manner, taking into account workers' interest in fair wages and working conditions, and employers' interest in enterprise flexibility and competitiveness. But in fact the scope of ILO standards is not limited to this aspect of economic and social development. Various instruments provide guidance on policies in general on employment, HRD, labour admini-stration, and so on. The Governing Body of the ILO tries to ensure that the catalogue of standards remains up to date and revised when-ever necessary in the light of modern conditions and the demands of member States in all regions.

Apart from the international labour Conventions and Recommendations dealing specifically with industrial relations, numerous other ILO instruments are available to guide governments and the social partners, ranging from issues concerning human rights at work (freedom of association, equality, forced labour, child labour) to conditions of work (wages, hours of work, night work, weekly rest, paid leave, occupational safety and health), to standards concerning social security, and to those dealing with specific groups of workers, such as children and young persons, women, migrant workers, persons with disabilities, seafarers and plantation workers.

Over time, the ratification and implementation of these and other ILO standards have contributed significantly to social progress around the world. Acceptance of these instruments in the Asia-Pacific region and implementation, in law and practice, of the principles contained in them vary from country to country.

As a centre of increasing industrial development, the region owes much of its recent growth to the competitive position it has achieved through low-cost structures, including that of labour costs. While most agree that workers' and other human rights -- and the tripartite approach -- are part of a viable, durable and harmonious development strategy, fear of losing this competitive advantage to other countries has led to a certain reticence in applying international labour Conven-tions and Recommendations. This, however, has been partially due to misconceptions and a certain amount of misinformation.

The need to continue to attract foreign investors and to spur further development has fuelled an intensive debate within the region on the social dimension of globalization. Concern has been expressed that this phenomenon could be used by developed industrialized nations to impose their high social standards on developing countries, thus depriving the latter of their competitive edge in world trade. For instance, it has been argued that countries in the region have to defend themselves against the imposition of a worldwide uniform minimum wage, which would cripple their growing economies. ILO minimum wages Conventions, however, only suggest a method of implementing a minimum wage system adapted to national circumstances, wherever it is felt to be necessary. They do not call for a uniform level of wages in absolute terms.

Furthermore, some countries in the region have argued that recent discussions in the World Trade Organization (WTO) on the social dimension of globalization, particularly with regard to certain proposals to link trade measures to the observance of labour standards (the so-called "social clause"), were inappropriate. While support for international labour standards has been repeatedly expressed in meetings of ASEAN Ministers and in other regional fora, the debate in the WTO has affected the way in which such standards are regarded in many countries. The first Ministerial Conference of the WTO held in Singapore in December 1996 has cleared much of the confusion, while at the same time renewing the commitment to observe internationally recognized core labour standards, by adopting the following statement in its final declaration: "We renew our commitment to the observance of internationally recognized core labour standards. The ... ILO ... is the competent body to set and deal with these standards, and we affirm our support for its work in promoting them." The Governing Body of the ILO and the International Labour Conference have continued to explore ways to strengthen the supervisory system of these core standards. Most recently, the Governing Body has confirmed that "the Organization must be ... the focus for the elaboration, implementation and supervision of workers' rights. The emphasis must be on respect for the fundamental rights of workers in the globalized economy and the overall improvement of ILO standard-setting activities so that the relevant instruments may be rapidly ratified by the greatest possible number of member States and amended as the situations evolve, and so that their application may be supervised effectively ...".

Some of the fundamental aspects of employment relations are embedded in a set of seven Conventions which have long been promoted by the ILO on a priority basis. Their importance and relevance were underlined, in 1995, by the United Nations World Summit for Social Development and by the United Nations Fourth World Conference on Women. These Conventions refer to freedom of association and the right to organize and collective bargaining (Nos. 87 and 98), equal remuneration and discrimination (Nos. 100 and 111) and forced labour (Nos. 29 and 105). In addition, the Minimum Age Convention (No. 138) is the standard referred to in the field of child labour. A decision has been taken to prepare a new instrument on the most intolerable forms of child labour, at the 1998 and 1999 Sessions of the International Labour Conference (see Chapter III, "Child labour").

Ratifications of these seven Conventions in the region are shown in annex tables A2 and A3 for the Asia-Pacific region and the Arab States of West Asia respectively. Fifteen of the 25 ILO member States falling within the geographical area covered by the ILO Regional Office for Asia and the Pacific have ratified at least three out of the seven fundamental Conventions. Two countries, both of them newcomers to the ILO, have ratified none of these Conventions. As regards West Asia, eight of the 11 member States under the jurisdiction of the Regional Office for the Arab States have ratified at least four of the seven Conventions.

With the spread of democracy and more open political and economic systems, it is increasingly accepted that basic human and workers' rights are necessarily associated with them. While this pro-cess is continuing, some positive outcomes can already be observed. What is in fact even more important than ratification of Conventions is their implementation. Action by the ILO in this respect is further described below.

ILO action to ensure the monitoring of the application of standards and to promote improved implementation, as well as universal ratification of the seven fundamental Conventions, is described in Chapter III.

Workers' protection

Working conditions

Working conditions -- particularly relating to hours of work, weekly rest, paid leave, night work, provision of work-related welfare facilities and termination of employment -- are extensively regulated by governments in many countries of Asia and the Pacific, especially those which inherited a detailed legal structure for labour and employ-ment issues from former colonial administrations. In practice, how-ever, protection seems to owe far less to the level of detail in laws and regulations than to the establishment of a clear framework in the relevant legislation, supported by the adoption, on a tripartite basis, of national policies on key issues (including agreement on priorities and the specific responsibilities of the different partners).

The current situation. Implementation of the laws and regulations on workers' protection has generally been very weak even in the areas of the economy -- especially the modern industrialized sector -- which have been the main focus of attention of labour administrations and employers' and workers' organizations. In small and medium-sized enterprises, and even more so in micro enterprises and the informal sector, which account for the great majority of the labour force throughout the region, efforts to improve working conditions have so far been largely irrelevant. Many millions of workers in Asia and the Pacific are working in sub-standard or even dangerous condi-tions, often for excessive hours.

The disparity in working conditions, not only between those in micro, small and medium-sized enterprises and those in modern, larger enterprises, but also amongst the latter, is detrimental to workers. Especially in the fast-growing countries, where the dis-parity is most visibly contrasted with changed expectations, it creates an inherent instability that will threaten future growth. There is, therefore, a need to ensure that the gains of economic development lead to real and visible improvements in working conditions and incomes for the vast majority of the people.

There is an increasing recognition of the need for labour admini-strations to set priorities and focus their efforts much more intensively in order to make a real impact in their areas of responsibility. Similarly, employers' and workers' organizations are trying to play a more significant role in both defining the appropriate standards of working conditions and promoting their effective implementation.

This shift in the roles of governments and of employers' and workers' organizations has been hastened by the trend towards government deregulation, affecting most, if not all, public sector activities. This has encouraged debate on defining the essential areas for regulation. The debate in Asia and the Pacific is coinciding with a global debate over the desirability of expanding regulation of working conditions into areas such as provisions for workers with family responsibilities, conditions for part-time workers and home-based workers, and protection of workers' privacy; and the feasibility of reconciling concern for workers' protection with more flexible provisions, for example, governing limitations on working hours or restrictions on labour subcontracting.

The impact of globalization. Rapid industrialization, particularly in the fast-growing economies of East and South-East Asia, has pro-duced a more widespread understanding, and implementation, of the basic minimum standards of working conditions, especially of working time and of work-related welfare facilities. However, a great deal of this growth has been based on an abundant supply of cheap labour and investment has often been rather footloose. In these situations, the tendency has been to apply only the bare legal minimum standards at best. This has not always led to improved working conditions: for example, a rapid rise in working time, parti-cularly evident when compared with the much lower average working hours in agriculture, has accompanied economic growth in the region.

The speeding up of the process of globalization and liberalization of national economies has seen Asia at the forefront, and at least in most countries in the region the impact on the quantity of employment has been very positive (see Chapter I and "Industrial relations trends in Asia and the Pacific", above). However, there are some concerns about the potential adverse effects on the quality of employment. There is a risk, for example, that in order to attract foreign investment, countries will "bid down" not only wages but also core working conditions, in the belief that this will increase competitiveness. This process occurs, for example, through the informal creation and marketing of "union-free" areas in EPZs, or even EPZs which are formally exempted from labour laws and regulations.

However, if the processes of globalization and liberalization have sometimes contributed to a degradation of working conditions, they have paradoxically also been an important force for their improvement. The direct role of enterprises and the supporting roles of employers' and workers' organizations have been of primary impor-tance. As noted earlier in this chapter, in their efforts to respond to the challenges of increased competitiveness, responsiveness and quality, firms are turning their attention to ways of maximizing the development and use of human resources. Flexible pay systems (based on productivity and profitability) are increasingly being considered for their capacity to reward performance based on higher-order skills (without increasing labour costs) and to respond to variations in the business cycle. In some countries the initial impetus for changed pay arrangements has come from governments. To be effective, however, such arrangements have to be negotiated and agreed at the enterprise level, a trend which is reinforcing the relevance of decentralized collective bargaining on these and related enterprise-performance issues.

Improved working conditions have also become one of the strate-gies for achieving these enterprise goals, and many companies have voluntarily adopted conditions which far surpass nationally mandated minimum standards. Seeking improved competitive advantage is not the only objective of such improvements: these enterprises often have other motives, such as a commitment to the principles of corporate social responsibility and the need to enhance social and community stability. However, the potential contribution of working conditions to a company's growth strategy is still rather poorly understood across the region, and enterprises lack the practical tools for analysing the costs and benefits of such improvements. Employers' and workers' organizations could play an important role in efforts to improve working conditions through promoting and publicizing positive examples, to complement their activities aimed at ensuring adherence to basic national minimum standards.

Workers in the informal sector and small and medium-scale enterprises are not so easily reached through these strategies. The ILO has given serious attention to this problem in Asia and the Pacific for over a decade, and practical interventions are now available to improve working conditions in these areas (see Chapter III).

As noted in Chapter I, many groups have been left behind in the growth process because of their geographical location, lack of assets of various kinds or weak structural position in the labour market. These groups often suffer the greatest problems in relation to working conditions: women at work face many problems arising from discri-mination, their low socioeconomic status, lack of maternity protection, the double burden of family responsibilities, sexual harassment and other factors; child labour is increasingly recognized across the region as a serious problem, but the development of practical ap-proaches for combating the problem has lagged well behind awareness (this issue is addressed later in the chapter); migrant workers are often excluded from protection; persons with disabilities, if they can find employment, are frequently exploited and underpaid, and much needs to be done to assist them to realize their potential and their right to equal treatment and opportunity; the needs of older workers are only now beginning to receive attention in a few countries where the demographic transition has been earliest felt, but many more Asian countries will soon need to confront this issue. One of the challenges facing policy-makers in Asia and the Pacific, including the social partners, is to develop ways to ensure that these groups will be in a position to benefit from continuing growth.

Occupational safety and health

The high economic growth recently experienced by most countries in Asia and the Pacific has provided real opportunities to improve safety and health at the workplace. Encouraging developments have included the ratification by Viet Nam (1994) of the Occupational Safety and Health Convention, 1981 (No. 155), the ratification of the Chemicals Convention, 1990 (No. 170), by China (1995) and the enactment of comprehensive occupational safety and health acts in Malaysia (1994) and in Fiji (1996), as well as the expansion of training and awareness-raising programmes in many countries (see Chapter III).

However, available accident statistics demonstrate the need for continuing concerted action on improving safety and health at work in most parts of the region. For example, in 1995 the number of reported industrial accidents in Thailand and Malaysia was 216,525 (966 fatalities) and 114,134 (828 fatalities) respectively. In China, during the same year, 20,005 fatalities were reported, including many in the mining and construction industries. More than 10,000 cases of pneumoconiosis have been reported annually in China. These high numbers are a reflection of industrial expansion and of improvements in the national reporting system; many other countries have limited data, particularly on occupational diseases, owing to the weakness or lack of national mechanisms to identify such diseases. In addition, major accidents continue to occur. For example, in 1993 a toy factory fire in Thailand took the lives of 188 young workers and a gunpowder warehouse explosion killed 63 people in Hubei, China.

In many countries the existing legal framework regulating occupational safety and health (OSH) still protects only certain categories of workers. Law enforcement is often limited to large enterprises, due to the lack of government inspection capacity. Thus, millions of workers in small and medium-scale enterprises are not sufficiently protected by existing legislation. Basic awareness of the importance of safety and health measures, and of their link with productivity improvement, is still absent among most managers and workers in the region, as the growth of information and training services in this area has not kept pace with economic development.

Countries in the region face common challenges to expand programmes to protect effectively all workers in a globalizing economy. A key task is to create a consensus in each country that the safety and health of workers should not be compromised in pursuit of economic growth. The establishment of a clear national policy is an important step in this direction. Developing such a policy through the collaboration of governments and employers' and workers' organizations, integrating it into the national economic planning process and securing adequate funding should ensure appropriate action. Various actions to implement such a policy are described below.

Improving OSH legislation and its enforcement. OSH legisla-tion should be continually reviewed to ensure that it responds to changing economic and other developments. It is essential that employers, regardless of the size and type of their establishments, be made responsible for protection against all hazardous situations in the workplace. In reviewing legislation, reference should be made to recent ILO standards, particularly Convention No. 155. In parallel, a greater effort must be made to enforce existing legislation. Supporting measures should include a well-publicized government decision to ensure strict enforcement of legislation, accompanied by improved training for existing inspectors and recruitment of additional qualified persons.

Developing special programmes. Having special programmes directed to hazardous occupations and industries is crucial for the effective use of limited human and financial resources. Each pro-gramme should include provision for analysis of issues and problems, and concrete practical measures. Special attention needs to be given to promoting practical action in small-scale enterprises, including measures linked with productivity and locally achieved low-cost improvements.

Improving the compilation and analysis of statistics. Comprehensive and reliable statistics on occupational accidents and diseases provide the basis for priority setting for preventive action, as well as for concrete programmes for identified sectors. Data collection from the employment injury insurance scheme should be promoted. The development of the means of identifying prevailing occupational diseases is a crucial step in the fight against them.

Developing nationwide awareness-raising and promotional programmes. It is extremely important to make managers, workers and the broader community aware of the significance of OSH in achieving sustainable socioeconomic development and higher productivity. Promotional activities linked to training, and planned and implemented through tripartite cooperation, can play a vital role. Improvements to regular national campaigns on safety and health, including industry-specific programmes, should be considered.

Setting up national OSH training mechanisms. The training of managers, supervisors and workers is the most important priority in promoting OSH. Such training should be made available throughout each country. Although the government safety and health inspectorate plays an important role in promoting such training, it is not usually in a position to organize and provide all the necessary training. The establishment and mobilization of private sector bodies should, therefore, be considered.

Mobilizing available resources and expertise. To promote OSH effectively, appropriate levels of funding must be secured. This is an area of real difficulty in most countries. Such funding should be sought through multiple channels. The protection of workers is the primary responsibility of employers. Establishing this responsibility in legislation, with the emphasis on training and strong enforcement mechanisms, provides the basis for ensuring appropriate budget allocations within enterprises. Governments committed to the promo-tion of OSH should be able to allocate funds for this purpose. Another possible funding source could be national employment injury insurance schemes, which will benefit through reduced expenditure from a lower incidence of accidents and diseases.

Social security

With a small number of exceptions, social security in Asia and the Pacific is relatively underdeveloped, considering the level of economic development attained by many countries in the region. As countries search for more people-centred forms of development, social security needs are becoming a higher priority than in the past. The main challenges are set out below.

Provision of replacement incomes in old age. As more and more people migrate towards urban areas and/or take up wage employment, the need for a replacement income in old age is becoming more widespread. Whereas people working on their own account may continue to work as long as they have the strength, the earning opportunities for employees become very restricted after the normal retirement age. Mutual support networks within families and village communities, while still important, are less able than in the past to satisfy people's needs for economic security in old age. This reflects not only increased labour force mobility but also the aspirations of older people themselves to enjoy greater economic independence and not to be reliant on assistance from their children. Increased life expectancy is also an important factor.

Workers in larger enterprises have some kind of social protection for old age in most countries of the region. However, this often takes the form of a national provident fund which provides only lump-sum benefits at retirement, not a pension providing a replacement income throughout old age. Research has shown that these lump-sum benefits tend to be exhausted within two or three years.

The challenge facing the countries with provident funds is, therefore, to introduce pension benefits and gradually to phase out (or at least reduce the importance of) lump-sum benefits. Not only does this help prevent the emergence of poverty among older retirees, but it also makes it possible to achieve a pooling of risks among those covered by the scheme (particularly important for those who become disabled or who die leaving a dependent spouse and/or children) and to provide some degree of income redistribution in favour of the least well-off pensioners.

Extension of social security coverage. In most countries of the region, social security coverage -- such as it is -- tends to be restricted to workers in larger enterprises. Admittedly, when estab-lishing a social security scheme, it is only reasonable to make it applicable, in the first instance, to workers in large firms, which pose few administrative problems. However, the exclusion of workers in smaller enterprises has lasted in some cases for decades. Now it is time to reduce the minimum number of workers above which enterprises are subject to compulsory coverage. Another useful technique is to make compulsory coverage applicable to enterprises with a total payroll in excess of a given amount -- this type of rule serves to bring into the scheme, at an earlier stage, firms which can most easily afford to pay the contributions.

In the developing countries of the region, most of the labour force are self-employed or active in the informal sector. Existing social security schemes can gradually be extended to cover some of these people, notably those working for a wage in the informal sector, but this will require much more effective inspection by the social security authorities.

For people who are genuinely working on their own account, other arrangements will usually have to be developed, since there is no employer to help pay the social security contributions. Schemes for these groups will, therefore, have to be more modest and should focus on the needs identified as priorities by those concerned, such as basic health care. At a later stage, it may be easier to establish schemes providing long-term benefits (old-age, disability and survivors' pensions).

Widening access to proper health care. Resources devoted to health care in many Asian countries are a very small proportion of gross domestic product. Furthermore, they tend to be distributed in a highly unequal manner, with poor people having access only to vastly overstretched public facilities while luxury care in private hospitals is provided to high-income groups. The twin challenge is to increase the total resources for health care, but to do so in a way that ensures good value for money and a much fairer distribution of health care. The role which social insurance plays in achieving these objec-tives is more and more widely recognized. In particular, broad-based systems of social health insurance have immense advantages over private insurance when it comes to finding the most appropriate methods for paying the providers of care. It is particularly important to broaden the target population beyond formal sector workers.

Social protection and transition to a market economy. In the countries now undergoing transition to a market economy, the number of persons employed by the State is falling and the number employed in the private sector rising, in some cases quite rapidly. Social security in the past has been designed to cover public-sector workers only. The challenge now is to make sure that workers in the private sector are effectively covered and that workers forced out of the public sector do not find themselves deprived of pension entitlements arising from their previous employment.

Placing social security schemes on a solid financial footing is the most essential step towards achieving these objectives. This requires institutional reform and may also necessitate a review of benefits and of eligibility conditions where these appear to be at variance with the contributory capacity of employers and workers. The way in which social security is administered in these countries will also have to be changed radically in order to adapt it to the realities of private enterprise. The social security system cannot rely on employers to carry out most of the administrative tasks themselves, as was done by ministries and state enterprises in the past. So social security admini-strations will have to do far more of the work, which will necessitate more highly trained staff and well-designed computer systems. They will also have to improve the information provided to employers and workers and greatly strengthen their capacity to inspect workplaces and ensure full compliance with legislation.

Labour administration and labour inspection

Globalization, together with the related but separate influences of liberalization and transition, dictates a need for new approaches to labour administration and labour inspection in the region.

Labour administration, defined by the Labour Administration Convention, 1978 (No. 150), as "public administration activities in the field of national labour policy", needs to reconsider which labour policies should be pursued to accommodate globalization, and which activities should be undertaken to implement such policies. Labour inspection, involving the enforcement of labour laws and the provision of advice as to how to comply with legal requirements, must also reconsider its role under globalization, as must public employment services. Major issues and challenges for labour administration and labour inspection are discussed below.

Economic efficiency and social protection. The promotion of economic efficiency, the desire for increased competitiveness in inter-national product markets and the desire to attract FDI lead governments to advocate and support policies for reduced levels of intervention in the operation of capital, product and labour markets. However, the pursuit of economic efficiency must be balanced against the need to ensure that workers are adequately protected and that social protection considerations are not abandoned. The challenge is for labour administrations to develop their capacity to enable them to make a leading contribution to the debate on this issue, and to be convincing advocates for social justice in the face of pressure to lower labour standards.

Implementation of policies and laws. Globalization dictates a need for innovative and imaginative policies which must then be translated into laws and regulations that give positive expression to such policy initiatives. The relevant international labour standards, especially the Labour Inspection Convention, 1947 (No. 81), the Labour Inspection (Agriculture) Convention, 1969 (No. 129), and Convention No. 150 referred to above, contain valuable guidelines for policies and their implementation. But the ratification of Conventions and the introduction of labour legislation in support of new labour policies, while important, are not enough; Conventions and labour laws must be enforced with impartiality and consistency, and labour administrations strengthened to enable enforcement functions to be effectively executed. This is of particular significance to countries in transition, all of which have (or soon will have) relatively new labour laws.

Nevertheless, labour administrations have a very limited capacity to raise the awareness of employers, workers and the general community as to the content of laws, to give advice on how to comply with legal provisions, and actually to enforce laws and regulations with impartiality and commitment. They need considerable support to ensure that limited inspection resources are focused on priority areas, that inspectors are trained in enforcement procedures, that there is closer integration of the work of labour and safety inspectorates, and that an inspection culture, based on service to clients, social protection and professional integrity, is developed.

Performance management. The downsizing or "right-sizing" of public administrations is a fundamental element of structural adjustment and economic reform programmes in many countries in Asia and the Pacific. Labour ministries are not immune from such initia-tives and find themselves under increasing pressure to improve their performance and make better use of their available resources. Some labour administrations have limited appreciation of performance management concepts and, indeed, have given scant attention to deter-mining those performance indicators which might be used to evaluate their efforts.

They require additional capacity to collect, compile and analyse statistics generated from their mainstream functions, thereby enabling them more accurately to assess their current performance levels. These current levels can then be used as a basis for establishing realistic future performance targets, and as the starting point of a change cycle which gives due attention to quantitative indicators, without ignoring the qualitative dimensions of labour protection.

A further aspect of the overall management of labour administration and labour inspection functions is the relations between labour ministry headquarters and their operations at the provincial and district levels. Provinces and districts constitute the cutting edge of labour protection services, and their capacity building should not be ignored at the expense of an over-concentration on headquarters.

The future performance of labour administrations also involves a consideration of the privatization of some services. This is of parti-cular significance in the field of employment services, where private employment agencies can be expected to play a larger role in future (see Chapter III, "Labour administration") .

Alternative work arrangements. Globalization and its resultant pressures on enterprises to reduce costs to maintain competitiveness lead to the introduction of different work arrangements of major concern to labour administrations. But with labour administrations struggling to cope with the protection of workers in formal sector wage employment, little attention has been given to less formal work arrangements involving contracting out, home work and other situations in which the relations between employers and workers fall outside conventional contracts of employment.

How to extend labour protection services to these new categories of workers, as well as to informal sector work activities (particularly concerning safety and health), constitutes a major challenge for labour administrations and labour inspection, if such services are to reach out to all segments of the workforce (see above).

Overall, the challenge for labour administrations is to confront the process and impact of globalization, assess its realities and impli-cations, and adjust, change and innovate. But this must not involve an abdication of the prime objective of workers' protection. The pur-suit of this objective will involve different, but not necessarily diminished, interventions on the part of labour administrations. For the foreseeable future, this will require both national and international support for the majority of the Asian and Pacific countries.

The special situation of child labour

Asia has shown dramatic economic performance in recent years, but in terms of child labour the record is both sobering and encouraging: on the one hand, two-thirds of the world's working children and some of its most repugnant forms are found in the region; on the other, Asia is also the region where visible results have been achieved in reducing the overall incidence of child labour. While child labour persists, not only will the children involved continue to suffer physical and mental hardships and inequity, but the situation will continue to reinforce workers' inequality in bargaining power with employers.

Regarding the global movement against child labour that has emerged in recent years, much attention has focused on some of its most intolerable forms, many of which still appear to be rampant in Asia. Many countries in the region are now attempting to eliminate child labour, mainly because they realize that it is inimical to long-term economic development, but also because of the possible loss of foreign trade as a result of international pressure. Governments have reviewed and updated their legislation, enhanced enforcement practices and designed practical policies and programmes to combat child labour. Employers' organizations and trade unions have been part of the process. The ILO's International Programme on the Elimination of Child Labour (IPEC), which is described in detail in Chapter III, is now active in over 11 countries in the region.

The nature and magnitude of the problem

Poverty remains the single most important factor pushing children into work and exploitative conditions at an early age. Lack of access to proper education, the limited relevance and quality of the education which is available, and entrenched social and cultural practices are equally important.

The problem is, however, complex. When children and their families were asked (in an ILO study on child labour in South-East Asian manufacturing)(1) why the children worked, the most common cause lay in family poverty. Yet only a minority of families said that children's earnings were essential to family survival. Almost no employer admitted that child labour was cheaper. The usual response was that adults could not be found to perform particular tasks, or that children accompanied other family members to work. A high pro-portion of the children employed were paid a fixed sum for each piece of work completed, rather than a regular daily or weekly wage. Another ILO study(2) demonstrates that the arguments of the so-called "irreplaceable skills" of children and their lower costs are not supported by facts. In all the industries studied, most of the unskilled activities performed by children were also performed by adults working with them. Child workers were, indeed, paid less than their adult counterparts, but the difference was negligible. The findings from these two studies raise serious doubts about the economic necessity of child labour in some of the most competitive industries in the region.

Various stereotypes have emerged to illustrate the problem of child labour in the region, such as child porters and estate workers in Nepal, rickshaw riders and garment workers in Bangladesh, bonded carpet weavers in India, child prostitutes in Thailand, mineworkers in the Philippines, and children working in the fishing industry in Indonesia. Though simplistic, these examples convey an idea of the variety of work in which children can be found.

The virtual absence of data on the incidence of child labour makes it impossible to develop reliable estimates on the magnitude of the problem and to identify trends over time. The ILO estimates that, globally, there are at least 120 million children between 5 and 14 years old who are fully at work, and more than twice as many (250 million) if we also include those for whom work is a secondary activity. More than 60 per cent of these children are to be found in Asia. On average, labour force participation rates of children in Asia are close to 20 per cent, or one child in five.

Some experts concerned mainly with South-East Asia believe that child labour is declining as a result of various factors, such as higher per capita incomes, the spread of education and a reduction in family size. In South Asia, there are no firm indications that it is on the decline. This can be attributed to demographic structures, high poverty levels, weaknesses in the education system and entrenched social attitudes. Countries in the region that are moving towards a market economy face a different problem. These countries used to have a well-developed social infrastructure, and child labour in the organized sector was virtually non-existent. However, higher educa-tion costs for families and more job opportunities in cheap labour industries have resulted in an increasing incidence of the problem.

Lack of data for the Pacific island countries makes it difficult to assess the situation there. The limited information available on labour force participation rates of children in, for example, Papua New Guinea (19.3 per cent) and the Solomon Islands (28.9 per cent) suggests, however, that there may also be reason for concern.

There are obvious qualitative differences in stages of development and levels of poverty between the different countries, but certain trends and common features are valid throughout the region. In this respect, it has been argued that increasing competitiveness as a result of globalization has further aggravated the situation of working children. Evidence from this debate is still inconclusive, but there are signs that the pattern of children's employment has undergone changes in recent years. Emerging changes are apparent from the structural shift in the incidence of child labour from the primary to the secondary and tertiary sectors, and the increasing proportion in wage employment compared with unpaid family work.

Intolerable forms of child labour

The extent of child labour cannot be measured solely through a simple count of working children; there is a considerable difference between a child who works in a protected family environment for an hour or two daily after school, and a child, far from home, who regularly works eight to ten hours a day in arduous conditions. The recent explosion in the concern that child labour has been receiving, at both the national and the international level, is a vigorous response to various public reports highlighting its most abusive and extreme forms.

Several studies have shown that millions of children are working in manifestly hazardous industries, jeopardizing their health and future for a paltry salary. Children are susceptible to all the dangers faced by adults, but work hazards that affect adults affect children even more strongly. In a comprehensive nationwide survey on working children in the Philippines(3) more than 1.8 million working children reported exposure to poor physical working conditions and about 30,000 reported having suffered from work-related injuries and illnesses.

Children working as domestic servants -- a widespread and continuing practice in Asia -- are likely to be among the most vulnerable of all, yet they are also the most difficult to protect. Even more gruelling is the practice of forced child labour. Children still work in slavery, or close to it, in many countries in the region. Despite legislation and serious efforts made to outlaw it, the practice by which children are sold outright for a sum of money or are the subject of debt bondage continues. In South Asia the problem is difficult to eradicate because of entrenched exploitative and socially complex factors. In South-East Asia the problem takes a different dimension but is certainly not less exploitative. Several cases have been exposed in recent years of child trafficking from Cambodia, China, the Lao PDR and Myanmar to Thailand to work in brothels or sweatshops. Once in a country illegally, children are at the mercy of their employers.

These examples of intolerable forms of child labour are far from exhaustive. Whatever the form, they can cause irreversible damage to a child's physical and psychological development, resulting in permanent disabilities, with serious adverse consequences in adult life. In addition, lack of education may prevent children from ever being able to undertake adult forms of employment which offer some relief from poverty. An ILO study in Pakistan(4) showed that among the child labourers interviewed 72 per cent had no access to education at all.

Challenges and priorities for action

High economic growth and rising education levels in Asia -- combined with strong policy, legislative and enforcement action -- offer favourable conditions for the reduction of child labour. But the problem will not disappear quickly.

Effective universal compulsory education remains the most promising means of reducing and then eliminating child labour. Generally speaking, child labour and the level of exploitation are highest where the provision of compulsory schooling is weakest. Many development initiatives in the fields of education and poverty alleviation could have had a much greater impact on the reduction of child labour if that concern had been built in from the beginning. Effective policies aimed at the gradual elimination of child labour must be adapted to the socioeconomic situation of each country. Not all countries in the region can eliminate all forms of child labour immediately. It should not be forgotten that the people who are most likely to resort to child labour for their own survival are those excluded from "mainstream" society (usually lower castes, ethnic minorities, indigenous or tribal groups). But whatever a country's circumstances, certain forms of child labour are unacceptable. A focus -- through policies, legislation and programmes -- on the most intolerable forms of child labour is, therefore, imperative.

Asian countries, particularly in East and South-East Asia, should be able to bring about a relatively quick end to the most abusive forms of child labour. Progress has been made through the joint efforts of governments, employers and their representatives, trade unions and non-governmental agencies. But there is no room for complacency and recent concerted and vigorous action must be sustained.

Concluding remarks

The changes required to industrial relations and workers' protection arrangements in the new economic environment -- at the policy, legislative and institutional levels -- must, in the first instance, be directed to improving relations between employers, workers and their representatives in the workplace in order to facilitate better enterprise performance and improve employment prospects. In so doing, they must secure equitable participation by workers in the benefits of increased enterprise development and growth. They must also ensure that workers retain their collective rights, including access to representation by the union of their choice.

But the systems governing industrial relations and workers' protection in each country have to do more. They have to respond to the labour market changes which are leading to increasing casual and informal sector employment in the region. Governments have the choice of extending the regulatory framework or undertaking a facilitative, promotional role to address the issues involved. Either approach will require the involvement of the social partners, who must be strengthened in their capacity to undertake broader representative and advisory functions. Support provided to the informal sector should be part of a longer-term strategy to increase employment in the formal sector.

The ILO can bring international analysis and experience to bear on the difficult and complex issues discussed in this Report. In the new economic environment, its unique role -- assisting its constituents to integrate social justice considerations, based on international labour standards, into relevant policies and strategies for economic growth -- has become more important than ever.


1. M. Falkus: A survey of child labour in South-East Asian manufacturing -- Summary and reflections, IPEC Asia Papers No. 2 (Bangkok, ILO/IPEC, 1996).

2. ILO: Child labour: Targeting the intolerable, Report VI (1), International Labour Conference, 86th Session, 1998 (Geneva, 1996).

3. ILO/IPEC and National Statistical Office, the Philippines: Survey of children 5-17 years old, Set of fact sheets (Manila, 1995).

4. ILO/IPEC: Qualitative survey on child labour in Pakistan, prepared by the Ministry of Labour, Manpower and Overseas Pakistanis and SEBCON (Pvt) Ltd. (Islamabad, 1996).


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