GB.274/PFA/9/1 - Governing Body

ILO is a specialized agency of the United Nations

GB.274/PFA/9/1 274th Session Geneva, March 1999

Programme, Financial and Administrative Committee	PFA

NINTH ITEM ON THE AGENDA

PROGRAMME AND
BUDGET PROPOSALS
FOR
2000-01

VOLUME 1

STRATEGY AND ORIENTATION

Contents
Paragraphs
Executive introduction by the Director-General Elect		1-13

Strategic Programme and Budget		14-113
Strategic Objective No. 1:
Promote and realize fundamental principles and rights at work		25-42
Operational objective 1(a):
ILO member States give effect to the principles and rights concerning freedom of association and collective bargaining, discrimination and forced and child labour that are reaffirmed in the ILO Declaration on Fundamental Principles and Rights at Work		27-30
InFocus: Promoting the Declaration
Operational objective 1(b):
The fundamental Conventions on freedom of association and collective bargaining, the elimination of forced labour and discrimination and the abolition of child labour are extensively ratified and fully applied		31-37
Operational objective 1(c):
Child labour is progressively eliminated, giving priority to the urgent elimination of its worst forms and providing alternatives for children and families		38-42
InFocus: Progressive elimination of child labour, promoting development

Strategic Objective No. 2:
Create greater opportunities for women and men to secure decent employment and income		43-72
InFocus: Reconstruction and employment-intensive investment
Operational objective 2(a):
ILO constituents are equipped to analyse economic and labour market developments and to elaborate and negotiate effective employment promotion policies and programmes		55-60
InFocus: Investing in knowledge, skills and employability
Operational objective 2(b):
Employment-friendly enterprise development policies and programmes are effectively implemented		61-64
InFocus: Boosting employment through small enterprise development
Operational objective 2(c):
Women have access to more and better jobs		65
Operational objective 2(d):
Policies and programmes to upgrade informal sector activities are effectively implemented		66-67
Operational objective 2(e):
Targeted programmes are adopted or strengthened to enable groups such as young workers, the disabled, migrants and indigenous populations to find decent employment		68-70
Operational objective 2(f):
ILO constituents are better equipped to influence global and regional policy development related to employment		71-72

Strategic Objective No. 3:
Enhance the coverage and effectiveness of social protection for all		73-96
InFocus: SafeWork: Security and productivity through safety and health at work
InFocus: Economic and social security in the twenty-first century
Operational objective 3(a):
International labour standards related to working and employment conditions are widely ratified and effectively applied		76-78
Operational objective 3(b):
ILO constituents target and take effective action against hazardous conditions in and around the workplace		79-82
Operational objective 3(c):
Policies and programmes of action on workers' protection are implemented for the most difficult-to-reach sectors and the most vulnerable and exploited groups, while voluntary measures are implemented to reach those workers who are insufficiently protected by existing systems		83-89
Operational objective 3(d):
Member States broaden the scope of social security systems, improve and diversify benefits, strengthen governance and management, and develop policies to overcome financial constraints		90-94
Operational objective 3(e):
ILO constituents at national level are able to analyse the social and labour implications of globalization, and to develop effective policies to protect workers from adverse social effects		95-96

Strategic Objective No. 4:
Strengthen tripartism and social dialogue		97-113
InFocus: Strengthening the social partners
Operational objective 4(a):
Employers' and workers' organizations have the necessary capacity to serve their members and to influence economic and social policy		99-107
Operational objective 4(b):
Machinery for social dialogue and consensus is widely adopted and fully operational, on a bipartite or tripartite basis as appropriate		108-113
The Turin Centre and the International Institute for Labour Studies		114-115
Technical and sectoral meetings		116-118
Strengthening institutional capacities		119-134
Rapid ILO response		135-141

Draft budget of expenditure and income for 2000-01		142-148

Appendix

Strategic and operational objectives: Synopsis

Tables

Graphs

Proposed expenditure budget
Contribution of the technical programmes, regional programmes and support activities to the strategic objectives

InFocus programmes

InFocus: Promoting the Declaration
InFocus: Progressive elimination of child labour, promoting development
InFocus: Reconstruction and employment-intensive investment
InFocus: Investing in knowledge, skills and employability
InFocus: Boosting employment through small enterprise development
InFocus: SafeWork: Security and productivity through safety and health at work
InFocus: Economic and social security in the twenty-first century
InFocus: Strengthening the social partners

Executive introduction by the Director-General Elect

1. This budget presentation sets in motion a process of strategic budgeting following the Governing Body meeting of November 1998. It moves away from the previous structure based on 39 major programmes to a new one centred on four strategic objectives and their corresponding operational objectives. As members of the Governing Body are aware, I have actively promoted this evolution.

2. Under each strategic objective, a number of international focus (InFocus) programmes of high priority, relevance and visibility have been identified. They will concentrate and integrate activities already under way while responding to new needs and demands for maximum impact and coverage. These (InFocus) programmes will have their corresponding expression within regional programmes. Appraisal of development needs and gender dimensions will constitute cross-cutting issues in defining specific activities in all strategic objectives.

3. The four strategic objectives and their related InFocus programmes are:

Promote and realize fundamental principles and rights at work

InFocus programmes
Promoting the Declaration
Progressive elimination of child labour, promoting development

Create greater opportunities for women and men to secure decent employment and income

InFocus programmes
   Reconstruction and employment-intensive investment
   Investing in knowledge, skills and employability
   Boosting employment through small enterprise development

Enhance the coverage and effectiveness of social protection for all

InFocus programmes
SafeWork: Security and productivity through safety and health at work
Economic and social security in the twenty-first century

Strengthen tripartism and social dialogue

InFocus programme
Strengthening the social partners.

4. Together with the above, a thorough analysis of present methods of monitoring and evaluation will be undertaken in order to ensure that programmes are formulated, funding allocated, and expenditures approved on the basis of targets, clear outputs and measurable performance indicators. Reaching agreed results is an important source of satisfaction for staff and a basis for recognition of their work. Activities already undertaken to develop key indicators of achievement in the context of MERS will serve as an initial basis for this task. By the time the programme for 2000-01 begins to be implemented, the system will be in place. Such a process is necessary because the ILO's efficiency can ultimately be judged in terms of its positive or negative impact on the life of individual women, men and children. It is a heavy responsibility we all share.

5. The strategic budgeting process will be the financial and monitoring backbone of the ILO as well as a crucial management tool:

• Defining priorities, focus, choices and even risk-taking are key to projecting the identity of the institution beyond itself and its traditional counterparts. It gives a sense of direction and purpose to its work. It is a statement of objectives and ensures clarity of purpose. In the case of the ILO, it responds to a major danger facing the institution, that of overreaching and underachieving.

• In a world of competition for limited public resources, cost-effectiveness, impact and image are crucial to the challenge of explaining why the ILO should be funded. One of the biggest bureaucratic mistakes that I have seen repeated so often is to take funding for granted. In the long term, only relevance and effectiveness ensure success and only success ensures adequate funding. Even so, the realities of financial constraints tend to prevail.

• Any successful endeavour depends on people, their commitment, sense of team play and dedication to the task. But for ILO staff to be motivated, they need a motivating mandate. They need to know from the decision-making bodies and the Director-General where the organization is heading, what the overall vision is and the way in which their work contributes to a larger picture. A motivating mandate gives them a tool with which to enrich and develop the strategic objectives of the institution.

• Strategic budgeting with larger envelopes facilitates the organization of greater in-house multidisciplinary activities focused on agreed priorities. Task forces, interdepartmental cooperation, greater headquarters and field integration and expansion of external partnerships are all enhanced possibilities.

• In implementing the budget priorities, the Office will seek ways to maximize the use of resources and impact by developing more intensive forms of cooperation and partnership with other organizations and donor countries within the multilateral system, as well as interested business and labour leaders and civil society organizations at the field level.

6. The Governing Body discussions in November 1998 highlighted the need to address the budget formulation process with an appropriate degree of flexibility. This seems proper for a number of reasons:

•The shift from major programmes to strategic objectives needs to be implemented on a step-by-step basis and will be guided by discussions in the Governing Body in March 1999 and the decisions of the Conference in June 1999.

• My Report to the Conference will develop further, in programmatic terms, the strategic outlook of the budget proposals of this document. It will highlight the immediate tasks ahead and propose areas of concentration on which to focus resources. It should be read in conjunction with the present document.

• At the time of drafting these budget proposals, some key elements of the 2000-01 programme of work of the ILO are still awaiting further discussion in the decision-making organs. Among them are the scope and implications of the follow-up to the ILO Declaration on Fundamental Principles and Rights at Work, further analysis of the Active Partnership Policy, the analysis of technical cooperation structures (management, delivery, impact, feedback), and work supporting private sector initiatives such as corporate codes of conduct, and the proposed new Convention on child labour.

• There is a need to develop a built-in rapid response capacity to address unforeseen events, critical situations affecting the world of work and in-house adaptation to programme implementation based on "early warning" signals.

• The counterpart to flexibility is a smooth ongoing process of information and consultation with the Governing Body.

7. The operational conclusion of the points above is that the Office will be in a position to articulate basic programme activities and specific budgets at the programme level for the biennium 2000-01, after the International Labour Conference of June 1999. The present budget proposals are conceived so as to give clarity and transparency to the major expenditure envelopes corresponding to strategic objectives, and to enable a comparison with the 1998-99 budget, as requested by the Governing Body. It is envisaged that, after the Conference, a process of consultation will be set in motion so that the November meeting of the Governing Body can be presented with financial information at the programme level.

8. In terms of budget lines, the level of aggregation and apportionment of previous major programmes to strategic priorities has been calculated on the basis of programme managers' evaluation of their unit's contribution to each of the four objectives. This procedure permits a clear comparison with the 1998-99 budget structure.

9. I am proposing resource increases for all of the regional programmes with greater concentration on Africa and Asia and the Pacific. The principle of zero growth has been applied with a proposed expenditure of US$481,050,000 for 2000-01; the same budget level as 1998-99. There are net cost savings of $785,000 in 2000-01 by comparison with 1998-99, an amount which has been applied to substantive programme activities.

10. This budget discussion comes at a time when the ILO is facing tough competition in the real world beyond its offices and meeting rooms. Other organizations both public and private are offering similar products and services, sometimes with greater visibility and influence. I am firmly convinced that we are in a good position to address this challenge on the basis of traditional ILO values and ideals. But to do so, important changes are necessary. I want the ILO to become a modern, dynamic organization which combines adaptability with a strategic vision of its mission. It should be capable of redefining priorities and reassigning resources in a normal management process responsive to new demands and emerging needs. It should be certain of its identity and self-assured of its areas of competence — an attractive institution that combines knowledge, service and advocacy in creative and imaginative ways to the satisfaction of all its constituents, stakeholders and donors.

11. This budget is an integral part of a wider process of change that will take place in the ILO from March to November 1999 at three interlocking levels: formulation of a strong tripartite consensus around the Organization's substantive priorities and the main focus of each priority, a reallocation of budgetary and extra-budgetary resources to implement them through the organization's programme of work, and the corresponding adaptation of the management structures and programme activities to make them operational. Ideally, this process should have been sequential in the order just mentioned, but because of the timing of my appointment, the budget approval process and the substantive discussion in the Conference follow a different order; flexibility becomes essential.

12. In the Programme, Financial and Administrative Committee meeting in November 1998, Director-General Hansenne indicated that the Office should collaborate with me and my transition team so that the budget documents for March could be prepared according to my instructions and the Committee's guidelines. Given time constraints, this procedure was followed mainly in the formulation of the strategic budget. I wish to express my gratitude to him for his approach in this matter and his constant cooperation since my election.

13. In order for this Executive introduction to be self-contained, I have included three main budget tables.

Juan Somavía,
Geneva, January 1999.

Table 1 . Summary of 2000-01 proposals (in US dollars)

Regular budget

1998-99 budget

2000-01 estimates

Policy-making organs ¹

65,636,386

65,440,917 )

Strategic objectives ²

357,087,481

358,067,950 )

1. Fundamental principles and rights at work

--

78,565,118

2. Employment

--

132,124,622

3. Social protection

--

88,553,188

4. Social dialogue

--

58,825,022

Management services ³

40,931,367

40,931,367 )

Other budgetary provisions

20,636,500

20,636,500 )

Adjustment for staff turnover

(4,116,734)

(4,116,734)

Unforeseen expenditure

875,000

875,000 )

Working Capital Fund

0

0 )

Adjustment for cost factors

(785,000)

Total approved budget 1998-99

481,050,000

Total proposed budget 2000-01 (recosted)

481,050,000 )

¹ This item covers the functions described under 10 (International Labour Conference), 20 (Governing Body), 30 (Major Regional Meetings), 210 (Legal Services) and 220 (Relations, Meetings and Document Services). ² This item is subdivided into three groups: Technical programmes, Regional programmes, and Support activities. These three groups are described in more detail in Table 2. ³ This item covers the functions described under 40 (General Management, 160 (Personnel), 170 (Financial Services) and 200 (Programme and Management).

Table 2 . Proposed breakdown of strategic objectives

Regular budget (in constant 1998-99 US dollars)

2000-01 estimates

Strategic objectives

Technical programmes ¹

149,387,855

1.Fundamental principles and rights at work

31,737,426

2.Employment

55,103,584

3.Social protection

44,271,122

4.Social dialogue

18,275,723

Regional programmes ²

140,909,873

1. Fundamental principles and rights at work

31,918,244

2. Employment

51,946,056

3. Social protection

27,339,510

4. Social dialogue

29,706,063

Support activities ³

67,770,222

1. Fundamental principles and rights at work

14,909,448

2. Employment

25,074,982

3. Social protection

16,942,556

4. Social dialogue

10,843,236

358,067,950

1 This item covers the functions described under 50 (International Labour Standards and Human Rights), 60 (Employment and Training), 65 (Enterprise and Cooperative Development), 75 (Turin Centre), 80 (Industrial Relations and Labour Adminis tration), 85 (Multinational Enterprises), 90 (Working Conditions and Environment), 100 (Sectoral Activities), 110 (Social Security), 120 (Statistics), 125 (Development Policies), 130 (International Institute for Labour Studies), 140 (Equality for Women), 145 (Interdepartmental Activities), 225 (Employers' Activities) and 230 (Workers' Activities). 2 This item is described in more detail in Table 3. 3 This item covers the functions described under 175 (Internal Administration), 180 (Publi cations), 185 (Information Technology and Communications), 190 (ILO Library), 235 (Public Information) and 240 (Industrial Relations).

Table 3 . Proposed breakdown of regional programmes

Regular budget (in constant 1998-99 US dollars)

1998-99 budget

2000-01 estimates

Active partnership, technical cooperation and resource mobilization

3,180,261

3,180,261

Field programmes in Africa

39,615,698

40,450,698

Field programmes in the Americas

36,643,947

36,793,947

Field programmes in Arab States

7,985,753

8,085,753

Field programmes in Asia and the Pacific

39,420,668

39,820,668

Field programmes in Europe and Central Asia

12,478,546

12,578,546

Total Regional programmes

139,324,873

140,909,873

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

Table 1 . Summary of 2000-01 proposals (in US dollars)

Regular budget	1998-99 budget		2000-01 estimates

Policy-making organs ¹		65,636,386		65,440,917 )
Strategic objectives ²		357,087,481		358,067,950 )
1. Fundamental principles and rights at work	--		78,565,118
2. Employment	--		132,124,622
3. Social protection	--		88,553,188
4. Social dialogue	--		58,825,022
Management services ³		40,931,367		40,931,367 )
Other budgetary provisions		20,636,500		20,636,500 )
Adjustment for staff turnover		(4,116,734)		(4,116,734)
Unforeseen expenditure		875,000		875,000 )
Working Capital Fund		0		0 )
Adjustment for cost factors				(785,000)
Total approved budget 1998-99		481,050,000
Total proposed budget 2000-01 (recosted)				481,050,000 )
¹ This item covers the functions described under 10 (International Labour Conference), 20 (Governing Body), 30 (Major Regional Meetings), 210 (Legal Services) and 220 (Relations, Meetings and Document Services). ² This item is subdivided into three groups: Technical programmes, Regional programmes, and Support activities. These three groups are described in more detail in Table 2. ³ This item covers the functions described under 40 (General Management, 160 (Personnel), 170 (Financial Services) and 200 (Programme and Management).

Table 2 . Proposed breakdown of strategic objectives

Regular budget (in constant 1998-99 US dollars)		2000-01 estimates

Strategic objectives
	Technical programmes ¹		149,387,855
	1.Fundamental principles and rights at work	31,737,426
	2.Employment	55,103,584
	3.Social protection	44,271,122
	4.Social dialogue	18,275,723
	Regional programmes ²		140,909,873
	1. Fundamental principles and rights at work	31,918,244
	2. Employment	51,946,056
	3. Social protection	27,339,510
	4. Social dialogue	29,706,063
	Support activities ³		67,770,222
	1. Fundamental principles and rights at work	14,909,448
	2. Employment	25,074,982
	3. Social protection	16,942,556
	4. Social dialogue	10,843,236
			358,067,950
	1 This item covers the functions described under 50 (International Labour Standards and Human Rights), 60 (Employment and Training), 65 (Enterprise and Cooperative Development), 75 (Turin Centre), 80 (Industrial Relations and Labour Adminis tration), 85 (Multinational Enterprises), 90 (Working Conditions and Environment), 100 (Sectoral Activities), 110 (Social Security), 120 (Statistics), 125 (Development Policies), 130 (International Institute for Labour Studies), 140 (Equality for Women), 145 (Interdepartmental Activities), 225 (Employers' Activities) and 230 (Workers' Activities). 2 This item is described in more detail in Table 3. 3 This item covers the functions described under 175 (Internal Administration), 180 (Publi cations), 185 (Information Technology and Communications), 190 (ILO Library), 235 (Public Information) and 240 (Industrial Relations).