The International Labor Organization’s (ILO) 1977 Declaration of Principles concerning Multinational Enterprises and Social Policy (MNE Declaration) provides guidelines for regulating the conduct of global businesses and defines the terms for their relations with workers and host countries in the developing world. The ILO Governing Body has recently discussed the possible review of the declaration, which was last updated in 2006, with some groups pushing for a full revision of the text that could include additional burdens and obligations on businesses.

While the business community, represented within the ILO by the global employers’ group facilitated by the International Organization of Employers (IOE), supports the MNE Declaration and recognizes the importance of updating it to reflect recent developments – such as the endorsement of the United Nations Guiding Principles on Business and Human Rights – the employers’ group does not believe a more comprehensive revision of the declaration would be needed.

During a meeting of the ILO Governing body this week, the employers’ group warned against any excessive revision of the declaration for the following reasons. First, any major changes to the declaration could create a conflict between it and other international regulatory texts, such as the OECD Guidelines on Multinational Enterprises, which has a chapter on Employment and Industrial Relations that is already carefully aligned to the existing text of the MNE Declaration. Significant changes to the MNE Declaration  could create confusion for OECD member states and the companies subject to the Guidelines’ recommendations, which were substantially revised in 2011 after much multistakeholder discussion. Second, the employers noted it is unrealistic to believe that the text can be fully updated in just one year, in time for the 40th anniversary of the declaration in 2017. Finally, the employers’ group argued that given the ILO’s limited resources, money should be invested in essential work in the field, rather than formal bureaucratic procedures in Geneva.

Although the employers called for a limited revision of the declaration to be executed by the ILO Secretariat, the ILO governing body agreed to undertake a full revision of the Declaration through a tripartite working group over the coming year, with the aim of completing the update in time for the text’s 40th anniversary. However, the employers’ group was able to negotiate a clause in the text regarding the structure of the tripartite working group, which underlines that the tripartite working group will make its decisions by consensus. This provision will give the employers considerable leverage as the process unfolds.

More information on the ILO’s decision can be found on the IOE’s website.

The International Labor Organization’s “World Employment and Social Outlook Trends: 2016” expects recent labor market growth to slow in the coming years amid uncertain economic prospects. The report recalls previous years’ editions in terms of content and approach, and the overall outlook for global employment remains bleak – worse than in 2015.

The International Organization of Employers (IOE) noted that rather than look only at growth and unemployment with a focus on vulnerable employment, the report could have looked at growth forecasts and their impact on employment, especially new forms of working arrangements. Given the current debate on the future of work, a different approach would have been welcome and may have painted a different picture of the future of employment.

Read the IOE perspective in full here….

Speaking at the B20 kick off meeting in Beijing on January 26, International Organization of Employers (IOE) President Daniel Funes de Rioja targeted the five key inhibitors of flexible labor markets and optimal labor market participation.

With employment already earmarked by the Chinese G20 presidency as a prime area of focus, Funes wasted no time in setting out the expectations of business: “I want the G20 to make ambitious commitments on the headline aim of Energetic Labor Markets and Adaptable Workforces.”

He set out five key actions for the G20 leaders to optimize labor market participation:

• Remove barriers to starting, operating and growing a business.
• Create easy-to-understand, employment-friendly labor law.
• Promote the variety of forms of employment needed to allow companies maximum opportunities to hire as many people as possible.
• Decrease the burden of non-wage labor costs – in many cases an obstacle to employing people.
• Create attractive regulatory framework conditions that stimulate the establishment of apprenticeships systems.

Funes went on to recall the recent IOE-BIAC-Deloitte survey on youth employment in G20 countries, launched just six weeks ago in Ankara, which found that 80 percent of respondents believed that the current regulatory framework for the establishment and operation of enterprises was “more cumbersome than supportive.” The IOE President cautioned that with such framework conditions in place, bringing more people into employment remained a pipe dream.

On top of the required action above, Funes also called for more transparency and accountability in the G20 employment process. The G20 national employment plans could, he acknowledged, play “a decisive role”, but their potential had not been fully exploited to date. The G20, with the support of business, needed to ask themselves:

• Are the employment plans concrete and ambitious enough?
• Is implementation of the employment plans sufficient?
• What are the lessons learned from the last two years?

Summing up, Funes said that the B20 called on the Chinese G20 presidency to refocus the employment process on job creation and growth, and to strengthen the implementation of employment commitments through more rigorous and robust assessment of the employment plans in place across the G20.