An introduction to the economic, social and environmental dimensions of EII in infrastructure

1. An introduction tothe economic, social and environmental dimensions of EIIin infrastructure “Employment-Intensive Investment for Sustainable Development” Cape Town, South Africa, 9 – 13 July 2012 A155532

2. EII – Using public investments Public investments – an instrument still available to governments Infrastructure investments: important share of total major share of public In reconstruction periods much larger 2

3. EII – Infrastructure for local development Linking sectoral public investments in productive infrastructure social infrastructure protection of productive resource base (environment) with employment creation – both direct and indirect and induced employment Injection to local people, enterprises and economy Means for and part of local economic development Domestic market expansion Social protection 3

4. Make the most of local resources, including Unskilled labour Knowledge (e.g. technology, skills transfers) Skilled labour Micro and Small Enterprises, Consultants Organisations, Associations Tools and Equipment Materials Natural Resource Base Finance What are local resources? 4

5. Local resource use: possible applications Soil conservation Sanitation Water harvesting Water Management Which productive and social infrastructure, and natural resources? 5

6. Technology choice – EIIP Development Technical and engineering standards to optimise the use of locally available materials in construction and maintenance Construction management and appropriate hand tools, equipment and machines, planning techniques and tools Productive and decent work 6

7. How much labour (% of budget) can productively be used? 7

8. What has been proven? • Based on technology choice: • Direct jobs: 3-5 times more • Multiplier effect: 1.6 – 2.0 Employment • Foreign exchange: typically 50% savings • Costs: typically 20% cheaper • Contribution to increased GDP + Social benefits from regular infrastructure investments 8

9. Sectoral Public Programmes Planned centrally or at decentralised level (Transport Sector Programmes, National Rural Infrastructure Programmes, National Education Programmes, National Health Programmes) Priority Objectives promotion of EII policies based on technology options local private sector development local governance Work opportunities are offered 9

10. Sectoral Public Programmes – Potentials, Constraints, Conditions for success Potential employment creation for unskilled, semi-skilled people, enterprises, consultants, as well as for unemployed graduate youth Well known constraints; operational systems developed and implemented in an increasing number of countries Priorities Access to public tenders, adaptation of contract systems to EII and SME approaches Support technical capacity building and management Access to credit, equipment, … 10

11. Employment-Intensive Investment Approach 11

12. Multisectoral Programmes – Community Works Small investment funds for employment and/or local development Productive, social infrastructure or productive natural resources/environmental programmes Direct and sustained impact on production and income for target populations, for their access to goods, assets and basic services Promotion of participative modalities and contractual approaches specifying rights and obligations of concerned parties Promotion of the principle of organisation and negotiation in previously unorganised environments 12

13. Multisectoral Programmes – Potentials, Constraints, Conditions for success Support to local communities in their role of programme managers: planning, programming, budgeting, supervision, administrative systems, fast disbursements and effective decentralisation Support to decentralised technical services Support to private sector development in programme supervision Support to value based organisations in programme management and implementation 13

14. Capabilities development:A new debate in economics Growth does not translate automatically into development Success in economic development no longer measured by GDP but employment sophisticated production structure human development Not one-size fits all policies, but different and diverse policies and institutions for country-specific context are required 14

15. A new development vision ILO‘s perspective Key challenge: trigger and sustain a development process which is characterised by Transformation of production structure (advanced technologies, diversification ) Transformation of employment patterns Accumulation of domestic capabilities These three processes are interrelated, complex, cumulative and path-dependent The State and social partners play a key role in facilitating and shaping the transformation and learning process 15

16. The Concept of Capabilities Capabilities are defined by two dimensions Competences – performance, knowing how to do, standards Option space – opportunities, potentials, choices Capabilities exist at the individual level at the collective level (firms, industry, society) Collective capabilities are more than the sum of individual capabilities 16

17. Why focus on infrastructure? Creation of productive capacities: economic and social return (public good) Employment creation Employment key for poverty reduction, social justice Close link technology – employment (also type) Employment key in creating human capital (capacities) and employability (capabilities) of workers Domestic capability Condition for dynamic catching-up process Capabilities of: enterprises, workers, institutions 17

18. Public Sector Enabling environment – govt. centralised/decentralised capacity Procurement systems/procedures Transparent tendering, rapid payment Private Sector Capacity building contractors and consultants Skills matching for workers Organisation building Capacity Building – Public and Private Sector • Adaptation of contract systems and procedures • Local resource use – technology choice • Decent working conditions • Active involvement of national partners, tender boards and committees • Public Private Partnerships • Training and capacity building centres • Registration and classification systems • Framework agreements and Codes of Conduct 18

19. EIIP support to constituents at three levels At micro level providing technical assistance for project development At mezo level providing institutional development and capacity building At macro level influencing investment policies and programmes with governments and international agencies Brief on EIIP – Strategic levels 19

20. At micro level Providing technical assistance for project concepts, feasibility studies and economic assessments targeting (youth, women, regions and zones) procedures for selection of partners and actors technical design and contracts implementation setting up monitoring and evaluation developing data 20

21. At mezo level Strengthening public-private partnerships; in design, implementation and evaluation of works Local private sector (SME, Consultants, etc.) crucial for quality implementation of works Management capacity of communes (procedures of tendering et adjudication of bids, etc.) Capacity for organisation and negotiation at local decentralised level, with communities and local organisations with a legal status Strengthening institutional capacities; Trainers, Training centres, Technical Colleges, Universities and Research Centres ILO: Networking, knowledge development and exchange (Annual Training Programmes in Turin) Regional Seminars facilitated in Africa, next 15th in Cameroon 21

22. At macro level Influence and re-orient public investment programmes and develop and put in place programmes Integrate employment considerations and use of local resources in decision making, to highlight their impact on employment and coherence with PRSP strategies Analyse employment impact through employment impact assessment methodologies Analyse institutional constraints and regulations Setting up a coordination function (Finance/Planning and with Labour, Sectoral, Regional Govt.) to facilitate support approach at large scale in all sectoral investment policies 22

23. The environmental dimension Reduced environmental impact Softer work methods and artisan production methods Local materials and less transport/mobilisation Employment-intensive works for Preventive measures against effects of climate change (adaptation) Restoration of natural resource base (mitigation) Increasing productive capacity of natural resource base Sustainable maintenance approaches – asset management Life cycle costing – investments and maintenance of assets Reduced waste, reduced costs and improved economic returns Long term sustainable jobs 23

24. Unpaid Care work EIIP design can contribute to addressing these gender inequalities… in sometimes profound and powerful ways…. Reduced mobility – tied to home Time spent collecting fuel, fetching water 1.3 billion poor women Lower labour market participation Prevalence of informal work Gender division of labour in workplace Unequal pay 24

25. EII and Gender Promoting equity in labour markets New and improved employment/income opportunities for women and men Equal pay for work of equal value Access to training Managerial positions Better access to services Increased participation and new perception of the role of women in society 25

26. Labour standards relevant to the construction sector • Equal opportunities and non discrimination(C100, C111) • Freedom of association and right to collective bargaining(C87, C98) • Elimination of forced labour(C29, C105) • Abolition of child labour(C138; C182) • Minimum wage and wages paid on time(C131, C95) • Basic provisions for safety and health(C155, C167) • Agreed working hours • Equality of treatment for casual labourers ensured • Social security regimes to be applied • Workers’ compensation for work accidents • HIV/AIDS and the world of work

27. Implementing labour standards – Requirements • Appropriate labour legislation • Contract systems and procedures • transparent tendering, rapid payment, at central and decentralised levels • Training of line agency staff for new role in: • preparation and supervision of contracts • partnership with SMEs • partnership with Ministry of Labour • Discussion/negotiation procedures between social partners

28. Implementing labour standards – Requirements (cont.) • Contractors are employers and should consider their employer obligations • Labour issues should be properly dealt with in contractor training programmes • Contracts should include relevant clauses • The client should monitor the effective application of such clauses

29. Some important questions • Who is reliable for what? • Which standards to focus on? • Implementing standards has a cost: who pays? which returns? • Have possible incentives and sanctions been considered for making clauses operational? • How to monitor and report for compliance?

30. Dialogue at local level Local level planning tools enable active participation – accessibility encourage a gender balanced development both in what to do and how to do it Better distribution and targeting of infrastructure investments IRAP – Integrated Rural Accessibility Planning WATER HEALTH MARKETS EDUCA- TION ROADS TRANS- PORT FUEL WOOD ELECTRI- CITY 30

31. Dialogue at central level Reliable methodologies for Employment Impact Assessments (EIA) of infrastructure programmes Establishing basis for an informed technology choice in infrastructure sectors Data collection on technical, economical and employment issues Ex-ante and ex-post studies Guide discussion and negotiation of strategies and procedures – Finance and Planning Ministries, Sectoral Departments and Municipal/Local Governments, Social Partners Three categories of EIA: Comparison labour- and equipment based methods based on micro-level data Employment impact analysis of components of certain sectors Evaluation of actual and estimation of potential impact of wide-scale application of labour-based Modification of legislation; enterprise, procurement, labour, etc. 31

32. Dialogue, Inequality and Social Cohesion 32

33. On behalf of theEIIP Global TeamThank you! eiip@ilo.org 33