Labor Markets - Core Labor Standards Toolkit

Core labor standards (CLS) are a set of four internationally recognized basic rights and principles at work:

I. Background

While there are many types of labor standards, the four listed above have achieved consensus internationally as the "core" labor standards. The international support for these standards in particular reflects an understanding that they are applicable to all countries regardless of level of economic development. These core labor standards do not establish a particular level of working conditions, wages, or health and safety standards to be applied internationally. They are not intended to alter the comparative advantage of any country. These basic rights have been repeatedly articulated in international human rights instruments and declarations such as the Universal Declaration of Human Rights in 1948 and the Convention on the Rights of the Child 1989. The most prominent recent expression of these four principles as a set of core labor standards can be traced to the Declaration of the 1995 Copenhagen Summit on Social Development.

Core labor standards were further substantiated in the 1998 Declaration on the Fundamental Principles and Rights at Work by the International Labour Organization, a tripartite body with representatives of employers, workers, and governments from 175 countries. The Declarationcalls upon each member to comply with the four principles, regardless of whether that State has ratified the relevant conventions. It also identified a role for international organizations such as the World Bank in promoting respect for core labor standards. The Declaration's follow-up activities include annual reports from the members not ratifying the core conventions and a global report on a different set of fundamental rights each year. Such activities supplement the ILO's detailed supervisory procedures for ratified conventions. The ILOis a key source of information for staff conducting analysis on core labor standards. (See Step 2 of this toolkit).

II. Describing Core Labor Standards

An assessment of compliance with CLS helps refine the Bank's advice to borrowers on poverty reduction strategies. Although assessed, compliance does not automatically lead to the conclusion that the respective country pursues a good development strategy, nor would non-compliance with CLS alone lead to the opposite conclusion.

While each of the core labor standards corresponds to one or more ILO Conventions, a country may be in compliance with a core labor standard even if the conventions have not been ratified. Conversely, the fact that a country has ratified a standard does not automatically prove their compliance with that convention. In all cases, domestic legislation and practice must be considered. Nonetheless, international labor law establishes the definitions and standards that domestic labor codes should follow.

Text of ILO core conventions

Forced Labor

Forced or compulsory labor is any work or service, paid or unpaid, that is performed involuntarily or under threat of penalty. Types of prohibited forced labor include: indentured labor, whereby an employer forbids a worker to leave employment at his or her own discretion; bonded labor in which a person, often a child, works to pay off a debt incurred by another agent; or forced prison labor not carried out in compliance with specified conditions (i.e. must be for convicted persons and if for private enterprise must be with consent of prisoner and/or government supervision. Forced labor for such reasons as mobilizing for economic development, punishment for strike participation, or as a means of discrimination is also prohibited. The key international conventions on forced labor include: the United Nation's 1956 Supplementary Convention of the Abolition of Slavery, the Slave Trade, and Institutions and Practices Similar to Slavery; the ILO's Forced Labor Convention of 1930 (No. 29) and the ILO's Abolition of Forced Labor Convention of 1957 (No. 105). The ILO's 1930 convention is the most widely ratified of any ILO Convention.

Child Labor

While ILO Conventions and national legislation have traditionally addressed child labor through regulation of hours, times, and minimum ages for work, recent legal provisions and interventions focus on the elimination of the most harmful forms of child labor. This policy shift reflects growing awareness of the link between poverty and working children as well as the need to strategically mobilize resources for the eradication of the most severe abuses of children: slavery or practices similar to slavery such as the trafficking and sale of children into debt bondage; forced recruitment of children for use in armed conflict; use of children for pornography, prostitution, or other illicit activities such as drug trafficking; and work which inherently or in certain circumstances is likely to harm the health, safety, or morals of children. To emphasize this urgent priority, the ILO adopted the Convention on the Worst Forms of Child Labor (No. 182) in 1999. This Convention calls for immediate action to eliminate the worst forms of child labor by such means as programs of action and time-bound measures for prevention, withdrawal, and rehabilitation.

The recent convention has not replaced previous child labor standards in international law such as the widely-ratified UN Convention on the Rights of the Child of 1989 and the ILO's 1973 Minimum Age Convention (No. 138). The latter establishes minimum ages for employment taking into account the State's compulsory schooling requirement. Developing countries may set the age at 14, with the understanding that it with increase over time. A higher minimum age is set for hazardous work (18) and a lower one (as low as 12) for "light work," defined as that which is not likely to be harmful to the health or development of children and will not interfere with their ability to attend and benefit from school. World Bank analysis of child labor typically prioritizes addressing the most harmful forms and those which are likely to have a detrimental impact on the human development of children and the long term development of their communities. See Child Labor: Issues and Directions for the World Bank.

Discrimination

A number of international legal provisions address the issue of discrimination, typically in terms of civil and political rights for women and minorities. ILO Conventions 100 and 111 are specific to employment and occupation. The Discrimination (Employment and Occupation) Convention (No. 111) adopted in 1958 calls on States to adopt national policies to eliminate discrimination in access to employment, training, and working conditions on the basis of the following: race, color, sex, religion, political opinion, national extraction, and/or social origin. Discrimination is defined as distinction, exclusion, or preference based on the above categories. The Equal Remuneration Convention (No. 100) of 1951 requires equal pay for men and women for work of equal value. Both are widely ratified.

Freedom of Association and Collective Bargaining

The freedom of association is considered the most fundamental of labor standards within the ILO. Even prior to the 1998 Declaration on Fundamental Principles and Rights of Work, this standard as defined in ILO Convention 87, was thought vital enough that all member states could be subject to complaints on its implementation, regardless of ratification status. Freedom of association applies to both employers and workers in formal and informal arrangements. It is considered an "enabling" right in that it allows key actors in the economy to join together to pursue their interests. The ILO Committee on Freedom of Association examines complaints on the principles of freedom of association whether or not the relevant ILO conventions (C87 and C98) have been ratified by the country in question.

ILO Convention 98 on the Right to Organize and Bargain Collectively, also considered part of the core labor standards, provides protection against interference of workers' and employers' efforts to organize and protects measures promoting collective bargaining. Additionally, the Convention specifically prevents employers from conditioning employment on worker's pledging to not join or to relinquish membership in a union and from dismissing or otherwise punishing a worker due to union activities.

III. CLS in World Bank Operations

While there is no official World Bank policy on CLS, the economic, social, and human development issues embedded in the standards make them relevant for Bank work. The Human Development Network's Child Labor Program, for example, was started in 1998 as a result of growing recognition of the long term negative development implications of child labor. Furthermore, NGO's, trade unions, the ILO, and the IDA Donors (discussed below), have encouraged the Bank to examine the relevance of core labor standards to its work. The 1998 ILO Declaration on the Fundamental Principles and Rights at Work specifically asks international organizations such as the World Bank to promote an atmosphere conducive to the achievement of core labor standards.

Compliance with core labor standards is not a condition for lending or technical assistance in client countries. The IFC and MIGA, however, do have policies forbidding the use of harmful child or forced labor in investor projects. Other World Bank Group activities to promote core labor standards include: policy dialogue and consultation with international trade union organizations and the ILO; training programs for Bank staff on how to work with trade unions; and the Global Child Labor Program which supports research and analysis, pilot studies, staff training, and projects to reduce child labor. Additionally, and further discussed below, Bank staff are encouraged to analyze core labor standards in the Country Assistance Strategies of IDA-eligible borrowers.

For more information, see the following:

Core labor standards and the 12th and 13th Replenishments to IDA

In the report accompanying the 12th Replenishment to International Development Association resources, IDA deputies recommended that Bank staff give greater attention to core labor standards in IDA client countries. Specifically, the report requests that each CAS include a diagnostic review of core labor standards and, "where country practices and policies have a negative impact on the country's development prospects," include such issues in the World Bank's dialogue with that country. The report also recommended increased collaboration with the ILO and integration of core labor standards criteria into the Country Performance and Institutional Assessment. This toolkit and technical assistance by the Human Development Network Hub's Social Protection Unit is designed to assist staff in fulfilling these recommendations. See the relevant excerptsof IDA Deputies Recommendations.

The report accompanying the 13th replenishment to IDA in September, 2002 maintained the recommendation to review core labor standards. See Additions to IDA Resources: 13th Replenishment, Supporting Poverty Reduction Strategies.

CLS and Poverty Reduction

The principles embedded in the four core labor standards can contribute to the World Bank's development mission. Adherence to core labor standards promotes effective labor market institutions that can contribute to economic growth and reduce workplace risks faced by the poor.

Child labor in its most abusive forms prevents children from receiving education and may mentally and physically damage their development, thus risking their future earning potential and perpetuating poverty into the next generation. (see Child Labor: Issues and Directions for the World Bank).

Forced labor self-evidently exacerbates poverty – of the workers forced to work as well as workers suffering from the resulting downward pressure on wages -- in addition to being an undeniably fundamental abuse of human rights and violation of international law.

Discrimination in employment and pay also undermines human dignity and development and impedes economic growth by under-utilizing and misallocating human capital resources. Discrimination in employment can exacerbate poverty among already-vulnerable women and ethnic and religious minorities.

Freedom of association and right to collective bargaining are recognized as potentially important factors in development; however, the application and promotion of this standard are more controversial for the World Bank. Freedom of association applies to both employers and workers and has political as well as economic dimensions. In evaluating the economic impact of trade unions, it is useful to acknowledge both of their somewhat distinct roles: one as a membership organization advocating on behalf of their constituents and another, broader advocacy role in favor of accountable government, social protection programs, and other social policies. The role of trade unions varies widely in developing countries, depending on factors such as: membership, capacity of leadership, and especially, the public policy and governance environment. While the empirical evidence on the economic impact of trade unions is mixed, good industrial relations between employers and employees contributes to a stable economy and, with responsible leadership, may prevent settlements that are detrimental to non-union workers. The evidence further indicates that to achieve this potential win-win outcome, core labor standards must go hand-in-hand with building institutional capacity and trust between the market partners and the government.

For a review of the macro and micro economic evidence on collective bargaining and unions, see The Cost and Benefits of Collective Bargaining: A Survey (139KB PDF).

Freedom of association also relates to conceptions of poverty and development that include empowerment and security, as articulated in the 2000/01 World Development Report. One lesson to emerge from the WDR is that the transformation of society that development demands requires the active participation of its citizens. Embedded in their social role as members of civil society, trade unions that are concerned about the aggregate social welfare, have the capacity, and are independent of the political process can provide vehicles for such participation. Full implementation of the freedom of association and right to collective bargaining help to create the conditions in which trade unions are valuable partners in development.

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