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IFC and ILO team up to improve working conditions in global supply chains

The International Finance Corporation, the private arm of the World Bank, and the International Labour Organization agreed on Monday, August 21, 2006, to collaborate in developing a global programme for better labour standards in global supply chains.

News | 25 August 2006

WASHINGTON, DC, August 25, 2006 - The International Finance Corporation, the private arm of the World Bank, and the International Labour Organization agreed on Monday, August 21, 2006, to collaborate in developing a global programme for better labour standards in global supply chains. The Better Work Programme will look at various industries, including garments and footwear, plantations, electronic equipment, and light manufacturing, with a focus on improving labour standards and promoting the business case for better working conditions.

The new programme will build on the success of a range of ILO projects, including its Better Factories Cambodia programme, which has been reporting on working conditions in Cambodian garment factories against national and core international labour standards since 2001. The Cambodian programme combines strict monitoring, remediation and training for factories, and cooperation with government, employers, unions, and international buyers to ensure a transparent and virtuous cycle of improvement. This programme has been widely credited with improving working conditions and compliance with international labour standards in the country's garment industry, as well as contributing to the growth of this industry after the expiration of the Multi Fibre Agreement.

IFC's partnership with the ILO will focus on creating global tools for labour standards monitoring and remediation systems; tools will include training, self assessment, information packages, and global Internet access. The second phase will involve pilot rollouts in selected countries of the Middle East, Southern Africa, and East Asia, where the global tools will be implemented in close consultation with labour authorities and supplemented by capacity building services for official labour inspectors, as well as training on best labour practices.

"IFC's experience shows that there is a clear and strong business case for companies to manage environmental and social risks," said Rachel Kyte, Director of IFC's Environment and Social Development Department. "IFC's recently adopted performance standard for labour and Working Conditions is focused on helping our clients address labour risks in their own businesses as well as in their supply chains. We look on this partnership with ILO as an opportunity to provide companies in emerging markets with new tools and even stronger evidence of the business case for responsible practices."

IFC will support the implementation of country pilots through its regionally based technical assistance facilities and will also provide a grant to ILO to support implementation of the overall programme. IFC will draw upon its global investment experience and social development expertise to develop a framework for corporate social responsibility applicable to each pilot country and will identify appropriate local partners to support the project activities.

"The ILO welcomes the opportunity to work in partnership with IFC on improving labour standards in global supply chains. By working together we can increase our impact," said Armand Pereira, the ILO's Representative Director for the United States. He added, "Improving labour standards often leads to increases in productivity, quality, and competitiveness. Most importantly, it increases the prospects for decent work, which is essential for millions of the world's people to move out of poverty."

Under the partnership, the ILO will develop the global portal and the tools for the Better Work Programme. It will also further extend its innovative monitoring Information Management System, for potential use in other countries and for public labour inspection.

About the ILO

The International Labour Organization (ILO) was established in 1919 by the Treaty of Versailles and became the first specialized agency of the United Nations system in 1946.

The ILO has four strategic objectives: to promote and realize fundamental principles and rights at work; to create greater opportunities for women and men to secure decent employment and income; to enhance the coverage and effectiveness of social protection for all; and to strengthen tripartism and social dialogue.

The ILO's work in setting and monitoring international labour standards has provided the framework for national labour law and practice in virtually all countries. The ILO is guided by the principle that social stability and integration can be sustained only if they are based on social justice. ILO assistance to efforts at job creation has been made more urgent by the steady rise in poverty linked to unemployment and underemployment during the last decade. The ILO provides research, analysis, and advice to assist policymakers and constituents in its 179 member states to make the right choices and formulate optimal strategies for creating more and better jobs. The ILO's technical cooperation focuses on support for democratization and poverty alleviation through employment creation that is grounded on fundamental rights, basic social protection, and social dialogue. In particular, the ILO helps its member states take practical steps towards implementing its international labour standards.

The ILO's total budget for 2006-2007 is just over US$900 million, including a regular budget of US$594 million plus US$306 million in extra-budgetary funds associated with special technical cooperation projects. For more information, visit

About IFC

The Social Responsibility programme is part of IFC's response to an increased demand for guidance and support from client companies and private sectors at large on corporate social responsibility. The programme helps IFC's projects and clients move beyond compliance with IFC's environmental and social performance standards. A subsidiary programme on labour Practices and Human Rights helps businesses improve practices, assess impacts, and act on opportunities related to human and workers' rights.

The International Finance Corporation is the private sector arm of the World Bank Group and is headquartered in Washington, D.C. IFC coordinates its activities with the other institutions of the World Bank Group but is legally and financially independent. Its 178 member countries provide its share capital and collectively determine its policies.

The mission of IFC is to promote sustainable private sector investment in developing and transition countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY05, IFC has committed more than $49 billion of its own funds and arranged $24 billion in syndications for 3,319 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY05 was $19.3 billion for its own account and $5.3 billion held for participants in loan syndications. For more information, visit

In Geneva: International Labour Office Laetitia Dard Phone: +4122/799-7912 Email:

In Washington, D.C.: International Finance Corporation Lucie Giraud Phone: +1202/458-4662 Email: