Decent Work for All ASIAN DECENT WORK DECADE 2006-2015
Selected Indian and International Experiences addressing formalisation
Presentation at Knowledge Sharing Workshop on Way Out of Informality
,
New Delhi, 6th December 2012
Sandra Rothboeck, ILO Consultant
Overview
1. India addressing formalisation
2. ILO’s integrated framework to enable transition to formality: Selected cases, which promote formalisation during this workshop
3. Selected international experiences addressing formalisation
A. Cases 1: Improving Regulatory Environment for Enterprises
B. Cases 2: Regulating unregistered employment
C. Case 3: Equity, Organising and Social Dialogue
D. Cases 4: Sector specific integrated initiatives
4. Conclusion
2
1. India addressing Formalisation
Some selected important milestones during the last 2 decades.
• 2 National Labour Commissions (1969, 1999), National Commission
on Rural Labour 1987, NCEUS
• Several Bills, Acts for unorganised sector workers & enterprises
• Innovations in Social Protection for unorganised workes (Act, 2008,
Scheme for All 2012
Many movements addressed: wages, social protection, organising, rights
• Trade Unions’ efforts to organise unorganised workers e.g. in
agriculture and construction
• Organisations such as SEWA, Women’s Worker’s Forum, Women’s
Voice, NGOs across the country played a significant role
3
Some selected initiatives @ national, international
originating in India:
• WIEGO (Women in the Informal Employment: Globalizing
and Organising )
• Policy, research, statistics, advocacy work,
• Delhi Group Informal Sector Statistics formed (1997)
• HOMENET South Asia (initiated by SEWA): Convention 177
• STREETNET/National Alliance for Street vendors in India
• Global Alliance for Waste pickers/The Alliance for Indian
Waste pickers (SWACHH)
• International Domestic Worker’s Network (IDWN), National
Domestic Workers Movement in India (NDWM): Convention
189
TRANSITION TO
FORMALITY
Growth strategies and quality employment generation
Regulatory environment, including enforcement of ILS & core rights
Organization, representation and social dialogue
Equality: gender, ethnicity, race, cast, disability, age
Entrepreneurship, skills, finance, management, access to markets
Extension of social protection, social security, social transfers
Local (rural and urban) development strategies
2. ILO’s integrated framework to enable transition to formality
INTE
GR
ATE
D S
TRA
TEG
Y
Summary of Cases presented in Workshop and their focus
Growth
strategy &
quality
employm.
generation
Regulatory
environment,
enforcement
of ILS and
rights
Organi-
zation for
represen-
tation, SD
Equity Entrepreneur-
ship, skills,
finance,
management,
access to markets
Extension
of social
protection
Local
develop-
ment
strategy
Macroec. Integr.
Policies for
formalization in
Brazil/ Indones.
Business Reg.
Reform Uganda
Bulgaria Payroll
administration
ESAF Partnership GOI ICICI Lombard: ensure access to high quality Healthcare for the poor (RSBY)
Sectoral: Waste
collection, Brazil
SEWA:
promoting
gender equity
and organising
Types and areas of formalisation, which are addressed ……
Worker recognition and
protection
Firm level formalisation
Organising,
Collectivising,
Strengthening Social
Dialogue and promoting
gender equity
• Formalizing employment
relationships
• Extending social security
benefits
• Recognizing skills level
(NVQF)
• Finding jobs in the
formal
economy/reducing risk
of informal employment
• Reducing regulatory cost
• incentives to registration
& compliance
• Facilitating formalization
through institutional
channels
• Facilitating formalization
through institutional
channels
• Helping IE firms to grow
& graduate IE
• Enabling environment to
form Trade Unions,
Cooperatives
• Building Associations and
Networks
• Strengthening Social
Dialogue Mechanisms at
local levels
…..through gender sensitive approaches
A. Improving Regulatory Environment for Enterprises
Reduce the costs of formality
Reduce regulatory/administrative barriers
to formalization
Interventions
- Business registration reform, simplified
tax/payroll administration.
- Incentives towards formalisation
- BDS to formal enterprises to increase the
advantages of formality
- Formalisation AND Up gradation
- Organising (Associations)
Focus: Unlock growth constraints of informal enterprises:
Case 1: Local Business Registration Reform, Entebbe
Municipality, Uganda
CHALLENGE
Cumbersome procedures, red tapism, annual trade licenses, which combine a basic registration of their status with other approvals.
(Source: http://www.oecd.org/dac/povertyreduction/38452590.pdf)
Formalizing
employment
relationship
Extending
social
security
benefits
Recognizing
skills level
(NVQF)
Finding jobs
in formal
economy
/reducing
risk of
informal
employment
Reducing
regulatory
cost
Linking
incentives
to
registration
&
compliance
Facilitating
formalization
through
institutional
channels
Helping IE
firms to
grow &
graduate
IE
Business Reg.
Reform Uganda
INTERVENTION
– Streamline MIS
– Simplified trade licensing process in Entebbe municipality,
– Entrepreneurs provide only basic information
– Immediate issuing of license document after payment
Modality: One stop service
IMPACT
Simplified process: admin time reduced from 2 days to 30 min.
Administrative costs reduced (10%)
Increased govt revenue by 40% with less individual payment
Better business- government relationship
Increased businesses registration (43%)
More targeted interventions for high risk enterprises
Better knowledge about sectors/enterprise performance
(ILO clip, 2007)
Case 2: Bulgaria’s Payroll Administration service, run by
local business association, supported by ILO (2005-2007)
Other innovative Cases for enterprise formalisation
Formalizing
employment
relationship
Extending
social
security
benefits
Recogni
zing
skills
level
(NVQF)
Finding jobs in
formal economy
/reducing risk of
informal
employment
Reducing
regulatory
cost
Linking
incentives to
registration
&
compliance
Facilitating
formalization
through
institutional
channels
Helping IE
firms to
grow &
graduate IE
Bulgaria Payroll
administration
through local
business
association
Business and
registration of
independent
workers -
Monotributors
in Uruguay
Argentina, Chile
Fed. of Kenya
Employers
assists MSMEs
in registration,
training and
policy advocacy
B. Ensuring regulation and protection of unregistered
employment/work
Key focus area:
Universal access to DW, recognition
• Recognition & integration into
mainstream
• Rights & benefits of formal
employment and/or formalising
contractual arrangements
Appropriate picture
Potential Intervention
- Redefine employment relationships
- Ensure access to Legal and Formal Social Protection
- Increase productivity (skills)
- Organising/ trade unions/cooperatives
Some innovative Cases for employment regulation
and protection Formalizing
employment
relationship
Extending
social
security
benefits
Recogni
zing
skills
level
(NVQF)
Finding jobs in
formal economy
/reducing risk of
informal
employment
Reducing
regulatory
cost
Linking
incentives to
registration
&
compliance
Facilitating
formalization
through
institutional
channels
Helping IE
firms to
grow &
graduate IE
Tripartite
dialogue and
cooperation –to
register the
unregistered
workers in
Turkey
(ILO/EU)
na
Gangmasters
Licensing
Authority UK
promoting
formalization
through better
licensing,
registration and
compliance
na
Focus:
Ensure recognition and collective voice
through organising
Interventions with specific focus on
women’s rights
C. Role of Equity, Organising and Social Dialogue
Potential Interventions:
Forming Trade Unions, sector specific
Linkages with Federal/National Trade Unions
Promote enabling environment for cooperatives
Formation of Local Business Associations
Linkages with Federal / National Business Associations
Gender Mainstreaming or specific women focused interventions
Case 3: Organising Self Employed Women and Women’s
empowerment: The case of SEWA
CHALLENGE:
Self-employed women at lowest level of IE. Lack of collective voice and recognition. Hazardous, low income work. High levels of vulnerability, particularly for women.
Formalizing
employment
relationship
Extending
social
security
benefits
Recogni
zing
skills
level
(NVQF)
Finding jobs in
formal economy
/reducing risk of
informal
employment
Reducing
regulatory
cost
Linking
incentives to
registration
&
compliance
Facilitating
formalization
through
institutional
channels
Helping IE
firms to
grow &
graduate IE
SEWA, India:
organising
informal sector
workers
Through
cooperative
www.sewa.org
Intervention
• Organising (as Trade Union),
• Access to Social protection
• Micro insurance
• Support structures for self-employed women
• Cooperative Development
• Access to banking services
• Sector specific & overall policy influence on rights and quality of work, and women’s rights
• Fosters national and international sector specific networks,
• Skills training
• Entrepreneurship development
IMPACT/Milestones
Member of ICFTU
Member Indian Central Trade Unions
9,66,139 m. in India (2008)
5,19,309 m. in Gujarat (2008)
Active in 9 states in India
Influenced policies, Labour commissions for unorganized workers and enterprises
Founder/facilitator for national and international networks (Streetnet, Homenet, Global Alliance for Waste Pickers etc.)
Co-initiator and co-founder of WIEGO
Influential in several ILO Conventions
Formalizing
employment
relationship
Extending
social
security
benefits
Recogniz
ing skills
level
(NVQF)
Finding jobs in
the formal
economy/reduc
ing risk of
informal
employment
Reducing
regulatory
cost
Linking
incentives to
registration
&
compliance
Facilitating
formalization
through
institutional
channels
Helping IE
firms to
grow &
graduate IE
Formalisation through integration of the self-employed in trade unions in Ghana
na
Strengthening
business assoc.
& formalization
of apprentices.
in Niger
Fed. of Kenya
Employers
assists MSMEs
in registration,
training &
policy advoc.
More cases on role of Organising, Social Dialogue in
Formalisation
D. Case 4: Sector Initiative: Integrated Waste Collection in Brazil
CHALLENGE:
Hazardous, low income sector. Lack of Recognition, high levels
of vulnerability, particularly for women. Limited waste collection
in poor neighbourhood
Formalizing
employment
relationship
Extending
social
security
benefits
Recogni
zing
skills
level
(NVQF)
Finding jobs in
formal economy
/reducing risk of
informal
employment
Reducing
regulatory
cost
Linking
incentives to
registration
&
compliance
Facilitating
formalization
through
institutional
channels
Helping IE
firms to
grow &
graduate IE
Integrated
Waste
Collection in
Brazil
na (cooperatives)
na na
Source: http://wiego.org/sites/wiego.org/files/publications/files/Scheinberg_WIEGO_WP23.pdf
Intervention Integrated Intervention through 3R
approach:
1) Recognition as occupation
2) Representation (MBOs, Cooperatives led to the National Movement of Waste Pickers)
3) Rights to redistribution through policies: waste pickers as legitimate actors and ensuring inclusion and equality
Approach: Policy inclusion, sector policies, 44% of 325 Municipalities collaborate with cooperatives at local levels
Beneficiaries: over 60’000 members of 500 Cooperatives
2001: National Movement for Waste Pickers MNCR
IMPACT/Milestones
Till 2011:
– 58% waste pickers are organised
– Majority of organised waste pickers earns above minimum wage
– Access to National Health System
2010: National Policy of Solid Waste law
Mandates:
– inclusion of informal recyclers in municipal recycling programmes
– promoting cooperatives
Expected Outcome from Policy:
- Increased average income > min. wage
- Formalize 250,000 workers by integrating
- Improved working conditions
- Socio-economic inclusion in 260 municipalities.
4. Conclusions
Diversity of Informal Economy
Multi-dimensional and integrated initiatives required
Formalisation is a gradual process cutting across several policy areas.
Address Multilateral linkages and institutional capacity
Sector based initiatives rather successful
Many enterprise registration/administrative reforms hand in
hand with incentives for worker registration & social protection.
Use single window/one stop service delivery mechanism with
strong MIS can strengthen local governance and implementation
Role of Social Partners and other stakeholders is critical for
outreach, more effective service delivery and strengthening linkages
with the formal economy.
21
Thank you
ASIAN DECENT WORK DECADE 2006-2015
Decent Work for All