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