ILO Candidates for Director-General on Informality

Here are the summaries of my perspectives on how the five candidates for ILO Director-General addressed the issue of informality in their January 2022 interviews.

Gilbert Houngbo

Mr. Houngbo spoke well about his experiences and perspective on this issue. First, he acknowledged that the ILO has done a lot of work in this area, for which a first step for him as D-G would be to use that knowledge base and to look at its “different dimensions”. He described what he did as prime minister in Togo, to organize the informal sector, for people in the informal sector to “have a voice” on policy issues and then to “harness the technology available” for it – as in Uber.  Beyond that, he listed option of more incentives to encourage social protections and using tax policy in a “mindful” way – and, he continued, to “fight corruption” that increases informality! So I was impressed. Here is someone who understands the African context and the developmental challenges, who has worked at the UN and UNDP for several years, at the ILO (albeit briefly) and at IFAD, where he described the fight against inequality (and informality) in rural areas especially affecting women and child labor.

Kang Kyung-wha

This was not a subject on which Ms. Kang could claim any experience. Nonetheless, on this issue, as she did throughout her interview, she showed her familiarity with ILO materials and spoke positively about the work of the ILO – and specifically about Guy Ryder’s leadership. As Mr. Houngbo had also noted, she praised the good work of the ILO data on informality and emphasized how more can be done with digital tools to make the issue more visible. When pressed further on the issue, she acknowledged that “we need to be more robust in reaching out” and that “social dialogue on the ground could be much more inclusive in collaboration with civil society on the ground”. In fact, she observed that labor unions and human rights groups were already collaborating “more closely on behalf of invisible groups”.

Mthunzi Mdwaba

As one would expect, one of the first questions from the Workers was about Mr. Mdwaba’s view of the role for the ILO in managing the growing erosion of the formal economy and increase in precarious jobs – and especially in the context of the ILO role in global supply chains. Mr. Mdwaba responded that informality is “huge where I come from” and that he understands how social protection requires more than transitions to formality. He believed that one should look at people in informality where they are, and even suggested that the ILO could apply a wider array of innovative tools, including the application of Convention 87 (the ILO standard on the right to collective bargaining). “Yes,” he said, “we must deal with informality in all its phases”. As for informality as applied to global supply chains, one could “get into” them to find answers with the development of small and medium enterprises. This appears to be in line with his written statement where he describes a “new way” of restructuring the world of work through social dialogue, also described there as the “third way” without his explaining what the “first” or “second” way might mean. It is worth noting that he expressed enthusiasm for social dialogue and working with Workers’ representatives but said nothing about a role for governments here.

Muriel Pénicaud

Ms. Pénicaud’s approach on addressing informality was distinguishable in two important respects. First, she described it mostly in terms of the absence of social protections. The obstacles facing small and medium enterprises and the self-employed are related to their having no access to a socially protective framework. Second, she expressed the view that one should “dare to be innovative” on access to social protections. The ILO, she said, should link up with international development and financial institutions and with the OECD to support social protections and a legal framework for them. She also mentioned her work with the social partners at Danone where she spearheaded a universal social protection program across Danone’s supply chains globally, much to the consternation of Danone’s competitors. She defended this kind of application of due diligence to business and social responsibility, and she highlighted it as an example of her profound commitment to tripartism. At another point in the interview, she emphasized the importance of a regional focus on informality and of asking the social partners on the ground what they need to transition to the formal economy. And she concluded her interview by reiterating the challenge to the ILO to “dare to be innovative” on this issue of universal access to social protection.

Greg Vines

This issue came up several times during the interview with Mr. Vines. Pulling together his responses to these different questions, there are three outstanding points. First, he recognized that there is an “enormous variety” in informality today. The ILO, he remarked, has been “completely under-resourced” on the issue and has yet to crack it. More research is needed to understand more about how to formalize employment, which should be done in a transitional way, recognizing that some work can temporarily be in the informal sector. The second point is that he recognized that the “formalizing” of work must include all three parties. He even described the important role of governments as requiring a “whole-of-government” approach.  He then gave an example of how he did this when he was industrial relations government official in Australia. And thirdly, he was challenged by the Employers’ representative who expressed the view that the transition from informal to formal employment is blocked by ILO standards, a point on which he firmly disagreed. In his view, the ILO system delivers opportunities to formalize, not barriers. While the ILO needs to pay more attention to enterprise development, including how to improve productivity, he believed that it should be done in a way that all parties can benefit from it, including workers.  So here we have a comprehensive grasp of the complexities on informality and a firm approach to addressing it. One should add here that Mr. Vines also affirmed a willingness to be educated if Employers (or anyone else) can show where there are obstacles in the ILO standards and to better understand how to make the transition to formality as easily as possible.

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