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SIXTH ITEM ON THE AGENDA

Relations with the Bretton Woods institutions

Addendum

1. As stated in the report on relations with the Bretton Woods institutions,⁽¹⁾ the ILO has broadened the policy dialogue with the World Bank and IMF at the highest institutional levels with a high-level event at the World Bank on 28 October 1998. The event included participation by the Bank's President and the ILO's Deputy Director-General responsible for relations with UN-system organizations and the Bretton Woods institutions and the Deputy Director-General responsible for policy on international labour standards. The Director-General was himself unfortunately unable to head the ILO team on account of illness.

2. The high-level dialogue focused on core labour standards and related issues of social dialogue, as well as their impact on economic development, against the background of the current global financial crisis. The main thrust of the dialogue was to explore how both the ILO and the World Bank -- which have different mandates and different structures but with the common goal of improving economic and social conditions worldwide -- could increase and strengthen collaboration through a better understanding of the need to work closely together on a balanced and inclusive approach to financial and economic issues, on the one hand, and social issues on the other.

3. The Bank stressed that such a balanced and inclusive approach was urgently needed and that the continuing difficulties with the current financial crisis had shown the urgent need to address social issues and to emphasize the building of a social consensus through social dialogue. The ILO stressed that social dialogue -- and social justice -- were central to its work and that, furthermore, core labour standards were essential as a framework for social dialogue to be effective, highlighting the adoption of the ILO Declaration on Fundamental Principles and Rights at Work and its Follow-up by the International Labour Conference in June. The Bank was particularly interested in the promotional approach reflected in the Declaration, which it regarded as a useful framework for policy dialogue on labour standards for the World Bank's operational programmes and policy frameworks which now, more than in the past, were beginning to reflect a more comprehensive approach to development that embraces both economic and social objectives.

4. Throughout the policy dialogue, it was clear that the Bank welcomed closer cooperation with the ILO as an organization with a strong social mandate. It was observed that, in particular, collaboration between the ILO and the World Bank could be streamlined and reinforced to focus on practical ways of promoting labour standards at the country level through Bank operations. The Bank referred, for example, to both formal and informal links it had established with trade unions (and with the private sector) as an indication of its new emphasis on social dialogue as the foundation for participative and inclusive development.

5. Both institutions agreed that there is common ground on the merits of those standards which relate to child labour, discrimination and forced labour but that some differences remained on the impact of standards of freedom of association and the rights to collective bargaining and their applicability to the Bank's mandate. Nonetheless, the policy dialogue was fruitful in identifying the potential for common understanding on these issues as well.

6. In this regard, both institutions agreed to follow up on this dialogue with a special initiative to explore convergence in the approach to the application of the core labour standards concerning freedom of association and the right to collective bargaining. Secondly, both institutions also agreed to support a programme of research, involving staff of both the World Bank and the ILO, on the interaction between economic development and core labour standards, as well as other areas of common interest.

7. Thirdly, accepting the need for a more cohesive approach to policy questions and the operational activities of the two institutions, both institutions agreed that a joint informal working group should be set up to focus on overall policy issues and closer country-level collaboration. Emphasis should also be placed on the World Bank's new approach to social development and the ILO's relevance as an international institution with responsibility in this field.

8. The policy dialogue was followed by a public forum organized jointly by the World Bank and the International Monetary Fund, whose Managing Director, Mr. Michel Camdessus, personally chaired the event at which the ILO Director-General's address entitled "Globalization, liberation and social justice -- Challenges for the international community" was delivered. The Managing Director, in his introductory remarks, reiterated the nature and extent of IMF cooperation with the ILO on social policy issues as they relate to macroeconomic performance. He referred to the recently adopted ILO Declaration on Fundamental Principles and Rights at Work and its Follow-up as a new instrument for dealing with social issues at the international level, noting that the core labour standards covered by the Declaration are central to democratic traditions and the attainment of sustainable development. He reaffirmed the Fund's support for core labour standards and his commitment to consultations with the ILO when questions concerning such standards arise in the context of the Fund's own programmes.

Geneva, 5 November 1998.

1. GB.273/ESP/6.