Australian Multilateral Assessment March 2012

International Labour
Organization (ILO)

OVERVIEW OF ORGANISATION RATINGS

Delivering Results
Very Strong

Transparency and Strong Alignment with

Accountability Australia’s Interests
Satisfactory
Weak

Partnership Behaviour Contribution to

Multilateral System

Cost and Value Strategic Management

Consciousness and Performance

ORGANISATION OVERVIEW

Established in 1919, the International Labour Organization (ILO) is the United Nations
(UN) specialised agency that deals with the world of work. At the core of its remit, ILO
is responsible for drawing up and overseeing international labour standards and
assisting member states to ratify and implement those standards. These standards
include the fundamental principles and rights at work, namely, freedom from forced
and child labour and discrimination, freedom of association and the right to collective
bargaining.

The ‘Decent Work Agenda’ is central to the ILO’s operations. Work is central to people’s
wellbeing. In addition to providing income, the Decent Work Agenda promotes the
idea that work can pave the way for broader social and economic advancement,
strengthening individuals, their families and communities.
ILO’s mandate is organised around four interrelated and mutually reinforcing strategic
objectives to achieve the Decent Work Agenda. These are:

> creating jobs

> guaranteeing rights at work
> extending social protection, and
> promoting social dialogue.

ILO conducts more than 1000 technical cooperation programs in more than 80 countries
with the help of some 60 donor institutions worldwide. ILO has decentralised the
management of most activities to its regional, area and branch offices in more than 40
countries across Africa, Asia, Central and Eastern Europe, Latin America, the Middle East
and the Pacific.

A notable feature of ILO is its ‘tripartite’ nature. Within its structure and function, ILO
brings together governments, employer organisations and worker organisations to jointly
shape policies and programs that promote the concept of decent work for all.

ILO accomplishes its work through three main bodies: The International Labour
Conference and the Governing Body which both comprise governments’, employers’ and
workers’ representatives; and the International Labour Office (‘the Office’) which acts as
the ILO secretariat.

The work of ILO is aided by tripartite committees covering specific sectors and industries.
It is also supported by committees of experts on such matters as vocational training,
management development, occupational safety and health, industrial relations, workers’
education, and special issues relevant to women and young workers.

In June 2011, Australia assumed the role of Chairperson of the ILO Governing Body for the
12 months to June 2012. Australia was recently regional coordinator of the Asia-Pacific
Group of Governments for the two years 2009–11. Australia is also an active member of the
Industrialised and Market Economy Countries government caucus group.

In 2010–11, Australia provided $17.7 million to ILO, comprising $10.2 million of assessed

contributions and $7.5 million in non-core funding. The assessed contribution represents
the equivalent of 1.7 per cent of the total regular budget, and is the thirteenth highest
assessed contribution by a government.

ILO is currently implementing agreed activities under the Australia–ILO Partnership

Agreement 2010–15. Activities funded include:

> the Better Work Program in Vietnam, Cambodia, Indonesia and Bangladesh
($7.5million)
> the Green Jobs in Asia project ($3 million)
> the Global Jobs Pact Framework for Labour Governance and Migration in the Pacific
($1.05 million)
> the Youth Employment Promotion Program in Timor-Leste ($2.25 million), and
> Pacific Growth and Employment Plan ($1.2 million).

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Other funding is also provided by Australia to ILO technical assistance projects, usually in
the Asia-Pacific region. Such projects have included:

> the TRIANGLE Project, addressing labour migration and exploitation issues in the
Greater Mekong region with funding of $10.5 million over the period 2010–14
> promotion of Equality at Work in China with funding of $300 000 for 2010–11
> the TIM-Works employment generating, rural road rehabilitation and maintenance
project in East Timor which received funding of $3.2 million for the period 2008–12
> the Local Empowerment through Economic Development project in Sri Lanka with
funding for $3.39 million for 2010–12, and
> the Decent Jobs for Egypt’s Young People—Tackling the challenge of young people in
agriculture project that received funding of $3 million over three years until 2013–14.

RESULTS AND RELEVANCE

1. Delivering results on poverty and sustainable development
SATISFACTORY
in line with mandate

ILO demonstrates many tangible development results from its activities at country-level.
For example, the ILO–International Finance Corporation Better Work Programme in
South-East Asia has resulted in the extension of labour rights and improved working
conditions for millions of workers in the garment industry. Nevertheless, the quality of
activity implementation varies across country and regional offices.

ILO also has more work to do in systematically assessing the impact of its capacity-
building activities and better linking its program outcomes to broader developmental
goals. Use of Decent Work Country Program reviews has helped in improving reporting,
but these efforts can continue and go further. Similarly, while ILO has made a concerted
effort to embed results-based management practices across the board, implementation
appears to be a top-down process that has yet to be fully implemented at country-level.

Much of ILO’s work, particularly related to its normative and international standards
setting role, is targeted at a cross section of society and not limited to targeting the
poorest of the poor.

a) Demonstrates development or humanitarian results

STRONG
consistent with mandate

ILO’s core mandate is to develop and oversee the implementation of global norms and
standards. Its country-level technical assistance activities must be seen in this context.
There are many examples of the positive impact of ILO development cooperation
activities, often in situations where unemployment (particularly of youth) is or was a
contributing factor to political and social instability. Labour-intensive infrastructure
rehabilitation projects in Indonesia and East Timor are among these. ILO was proactive in
developing youth employment initiatives in Egypt following the Arab Spring, although it
is too early to assess their results.

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Many ILO initiatives involve capacity building of tripartite partners in the countries in
which the organisation works. Measuring the impact of such activities is inherently
difficult, but ILO produces little by way of evidence of the success of such interventions.
Australia encourages ILO to adopt innovative approaches that use qualitative information
to highlight the impact of projects, in addition to rigorous quantitative assessments. ILO
has examples of results reporting that link labour and employment issues to broader
development outcomes, for instance the ILO–International Finance Corporation
collaboration on the Better Work Global Programme coming out of the Better Factories
Cambodia initiative. However, results-based reporting such as this is not institutionalised.
Australia will closely monitor ILO efforts to mainstream results-based reporting.

Interviews conducted with key ILO staff at all levels—Geneva headquarters, the Bangkok
regional office for Asia and the Pacific, and country offices—indicate that while
implementation of results-based management is underway and appears to be effective at
headquarters level, it is yet to be fully and effectively implemented across the
organisation. Better reporting of results will greatly assist ILO in demonstrating its
effectiveness to all stakeholders.

b) Plays critical role in improving aid effectiveness through

SATISFACTORY
results monitoring

ILO’s focus on results-based management in Decent Work Country Programs DWCPs and
other similar measures of quality has been in place for several years now. Focus on the
implementation of results-based management, and ongoing evaluation of the success of
these efforts, is driven by ILO’s Governing Body and remains a central discussion point in
most Governing Body meetings. Whilst these initiatives receive strong endorsement at a
headquarters level, ILO is yet to demonstrate a solid or fully implemented results-based
management system at all levels.

One of the latest policy developments on this front has been the adoption of ILO’s new
evaluation strategy, Results-based Strategies 2011–2015: Evaluation Strategies,
Strengthening the use of evaluations, adopted by the Governing Body in March 2011. This
strategy builds upon previous ILO evaluation strategies and the lessons learned in the
2010 independent external evaluation. Australia will monitor closely the implementation
of this strategy to ensure its effectiveness.

Implementation of the results-based management agenda appears to be an ongoing

top-down process. Leadership on the issue is strong at the headquarters-level. ILO is
looking to further develop its results-based management to allow it to be more closely
linked to budgeting in the future. It is recognised that implementation remains a work-in-
progress and the level of compliance with results-based management principles varies
considerably across countries and across programs within countries. Additionally,
progress reports and evaluations of some activities could benefit from more frank
assessments of implementation challenges. ILO has expressed a commitment to
continuing to invest in this area.

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 c) Where relevant, targets the poorest people and in areas
SATISFACTORY
where progress against the MDGs is lagging

ILO operates across a wide range of contexts from working with high level international
forums such as the G20 through to working with stakeholders in some of the world’s
smallest nations in the Pacific and unstable political and social environments.

Much of ILO’s work, particularly related to its normative and international standard
setting role, is targeted at a cross section of society. ILO’s mandate therefore is not limited
to targeting the poorest of the poor. For example, the newly adopted Convention on
Domestic Workers is of particular relevance to the wider Asia Pacific region as it is home
to both source and destination countries for domestic workers.

ILO is charged, however, with responsibility for monitoring progress against Millennium
Development Goal 1(b), to achieve full and productive employment and decent work for
all, and it is this particular goal that most directly relates to the remit of ILO. Its 2009
publication, Guide to the New Millennium Development Goals Employment Indicators, is a
useful tool for countries to help monitor progress. The 2011 MDG Progress Chart, however,
shows that the poorest result (‘no progress or deterioration’) against MDG 1(b) is in the
Oceania region, a region of key geographic interest to the Australian aid program.

The Australian Multilateral Assessment review of ILO operations in the Asia-Pacific region
indicates that the organisation’s work is generally well regarded—but the ‘no progress or
deterioration’ rating for MDG 1(b) in the Oceania region is a concern. Australia has long
advocated for greater resourcing of the Bangkok regional office and even more so for the
Suva office for Pacific member countries. Australia will continue to monitor and advocate
prioritisation of greater resourcing for our immediate region. At a time when more focus is
being placed on organisational efficiency and the accomplishment of the MDGs in least
developed countries, the effectiveness of permanent ILO representation in a range of
highly developed countries (for example, ILO country offices in France, Germany, Italy,
Portugal and Spain) should be closely examined when there is only one office with a
small number of staff for all eight (soon to be ten) small island ILO member states of the
Pacific. Any review of the effectiveness of ILO operations and permanent representation
in already-developed countries must seriously consider the costs and benefits of
continuing such permanent representation versus redeploying the funds tied up by those
offices to other in-country locations and projects where ILO technical assistance is needed
most.

2. Alignment with Australia’s aid priorities and national

STRONG
interests

ILO has been a useful partner for Australia in promoting normative processes and
technical assistance. Working with ILO has allowed Australia to build linkages in the
Asia-Pacific region on labour and employment issues that support Australia’s national
and regional interests, including regional economic stability.

There is good alignment between the ILO’s Decent Work Agenda and the Australian aid
program’s strategic goals of promoting opportunities for all, sustainable economic
development and effective governance.

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ILO has a strong gender unit at headquarters level with a dedicated team of 20 gender
specialists and a 130-strong network of gender focal points. At country-level, there is
evidence of a focus on gender issues. For example, in Sri Lanka, ILO works with the
government on its gender equality and the world of work program.

ILO effectively promotes skills development and employment opportunities for people
with disability.

ILO’s mandate does not specifically refer to working in fragile states but it has had some
successes in these states and in fragile situations.

a) Allocates resources and delivers results in support of, and

STRONG
responsive to, Australia’s development objectives

ILO has been a useful partner for Australia in promoting normative processes and
technical assistance. Working with ILO has allowed Australia to build linkages in the
Asia-Pacific region on labour and employment issues that support Australia’s national
and regional interests, including regional economic stability.

ILO has proven to be an effective player in contributing to the debate on sustainable

economic development—in particular through drawing on its tripartite structure.
Australia has valued ILO’s voice as a global advocate for sustainable economic
development through better employment and labour practices and opportunities.

Perhaps the most visible example is ILO’s global advocacy on the Global Jobs Pact, an
initiative arising from the 2008 Global Financial Crisis. The Global Jobs Pact has been
endorsed and used by major international bodies including the G20, the UN’s Economic
and Social Council and many regional forums as a model for implementing sustainable
economic reform based on broad principles of social justice and equity. ILO’s work with
the G20 has been particularly valuable in relation to skills development and social
protection, an area in which there was close collaboration with Australia as a leader of
the social protection work stream in the G20 Development Working Group.

In 2010–11, ILO strengthened its technical cooperation and modestly increased resourcing
for programs in the Asia-Pacific region. As noted earlier the regional supervision and
assistance, as provided by the regional office in Bangkok, is not always sufficient to cover
the needs and demands of the Pacific. The physical distance between Bangkok and Suva
impedes the ability for ILO specialists to actively engage with Pacific members as often as
desirable. Partly because of this, ILO has tended towards creating many small technical
assistance activities which, overall, can be quite fragmented. This is evidenced most
strongly in the Pacific, where ILO projects could benefit from a more holistic and coherent
set of interventions. ILO has indicated it is moving to address this by developing best
practice interventions that are replicable in nature; however, this is an area for close
monitoring.

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 b) Effectively targets development concerns and promotes
SATISFACTORY
issues consistent with Australian priorities

ILO provides an employment focus on technical assistance projects, including those

funded through the Australian aid program, that link with employment and jobs-related
priorities in An Effective Aid Program for Australia, including promoting opportunities for
all, sustainable economic development and effective governance.

ILO’s Decent Work Agenda encapsulates efforts that support Australia’s development
objective to ‘improve incomes, employment and enterprise opportunities for poor people
in both rural and urban areas…to boost overall economic development’.

Examples of work ILO has undertaken in recent times that directly supports issues
consistent with Australian priorities include:

> Green Jobs in Asia

> Youth Employment Promotion Programme in East Timor, and
> the social protection and anti-trafficking TRIANGLE Project in the Greater Mekong
Subregion.

Country and regional visits undertaken through the Australian Multilateral Assessment
process have demonstrated the good links between ILO’s work and Australia’s
development priorities. As an organisation with a specialised mandate and expertise, ILO
has been able to provide a range of technical services from combating labour exploitation
to labour law reform. Australia has, and will continue, to work with ILO to ensure its work
is sustainable: the strong capacity building focus that is achieving good results in the
TIM-Works project in East Timor is one example where ILO is bringing sustainable
economic development and the theme of ‘opportunities for all’ to the fore.

ILO’s mandate and development interventions do not directly correlate to the aid
program’s strategic goals of saving lives or more effective preparedness and responses to
disasters and crises.

c) Focuses on crosscutting issues, particularly gender,

STRONG
environment and people with disabilities

ILO has a positive track record of focusing on some crosscutting issues through its
Decent Work Agenda, particularly in gender and disability inclusive development.
Specifically, the Decent Work Agenda includes four strategic objectives with gender as a
crosscutting objective.

ILO has a strong gender unit at headquarters-level that actively promotes the
mainstreaming of gender issues across ILO’s work. There is a dedicated team of 20 gender
specialists and a 130-strong network of gender focal points. Gender is mainstreamed
through the Decent Work Country Programs and is evaluated by the gender department.
The strong organisational capacity in this regard means that gender has become
mainstreamed throughout ILO’s work and is an important consideration to both its
normative and technical assistance work programs.

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The operational aspects of gender are also complemented by the gender-sensitive nature
of its normative work, an example being the strong focus on domestic work over
2010–11 and the gendered implications behind the successful adoption of the Domestic
Workers Convention and Recommendation at the 2011 International Labour Conference as
well as initiatives to ensure established ILO governing texts include gender-inclusive
language.

ILO promotes skills development and employment opportunities for people with
disabilities based on the principles of equal opportunity, equal treatment, mainstreaming
into vocational rehabilitation and employment services programmes and community
involvement. The principle of non-discrimination is increasingly emphasised as disability
issues have come to be seen as human rights issues. To promote mainstreaming of
disability in its body of work, ILO is implementing the Disability Inclusion Initiative that
will take place first in its employment sector activities. ILO has also undertaken recent
national-level workshops in the Pacific on disability to help identify gaps in legislation,
promote skills development and inclusion and to encourage tripartite action in the area of
decent work for people with disabilities. Australia has, to date, had limited engagement
with ILO on disability issues. With limited first-hand experience, it is difficult to assess
their effectiveness at addressing this issue.

Environment mainstreaming is less advanced than gender and disability—perhaps

because it is only a relatively new focus for ILO in the context of decent work.
Environment and climate change concerns are targeted in particular through ‘Green Jobs’
projects, including one funded under the Australia-ILO Partnership Agreement. The scope
of the Partnership Agreement project on Green Jobs focuses mostly on knowledge sharing
and does not yet demonstrate the strengths seen in ILO’s gender and disability work.

d) Performs effectively in fragile states SATISFACTORY

ILO mandate does not specifically refer to working in fragile states but it has
demonstrated some successes in fragile states and situations including contributing to
early recovery and reconstruction efforts in a number of African countries.

A successful ILO intervention in the Asia-Pacific region is in East Timor in creating a

labour-intensive employment program that seeks to address youth unemployment issues
and tripartite capacity building. The TIM-Works project builds the capacity of the
government and its social partners, improving mechanisms for dialogue, labour
regulation, skill development and labour rights.

3. Contribution to the wider multilateral development system STRONG

ILO plays a specialised role through effective provision of policy and expertise in labour
statistics and research. It is a standard-setting institution and has played a critical role in
developing international labour standards since its inception in 1919. In this time, it has
developed 189 legally binding conventions, 201 non-binding recommendations and a
number of declarations, including the collation of the Fundamental Principles and Rights
at Work.

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Other normative areas of ILO work that are particularly valuable include freedom of
association and combating child labour. ILO’s International Programme on the
Elimination of Child Labour is seen as one of its most successful initiatives and is the
largest of its kind in the world.

a) Plays a critical role at global or national-level in

STRONG
coordinating development or humanitarian efforts

ILO’s mandate is not specifically related to international development or humanitarian

efforts. As an organisation with a specialised mandate and expertise, ILO is uniquely
positioned to lead policy dialogue and development efforts through employment and
labour, particularly at the national-level.

Reflecting its unique structure, ILO is effective at fostering dialogue between tripartite
constituents in-country and developing capacity for ongoing dialogue. A good example of
this is seen in the Better Work programme which brings together all the key actors in
national textile, garment and footwear industries to work together to increase efficiency
and productivity for all parties involved and simultaneously improving labour rights for
the factory workers themselves.

In some respects, ILO has been an effective participant in global and regional discussions
on sustainable development against the context of the global financial crisis. ILO has had
a close working relationship with the G20, being tasked to develop policy
recommendations and provide research and analysis on several occasions. ILO’s Global
Jobs Pact and the Social Protection Floor Initiative have also been valuable advocacy tools
in this context.

ILO could enhance its visibility and engagement within the multilateral community at a
country or regional-level. Whilst ILO has a specific set of stakeholders to engage with
(government, employer and employee), increased engagement in general development
coordination and policy fora could help enhance multilateral effectiveness at a
country-level and avoid the duplication of resources or programs. ILO is encouraged to
continue to integrate its agenda at a country and regional-level so it can better contribute
to achieving broader development goals.

b) Plays a leading role in developing norms and standards or

STRONG
in providing large-scale finance or specialist expertise

ILO continues to play a central role in developing international labour standards which it
has done since its inception in 1919. In this time, it has developed 189 legally binding
conventions, 201 non-binding recommendations and a number of declarations including
the Fundamental Principles and Rights at Work 1998 and the Declaration of Social Justice
for a Fair Globalisation 2008.

ILO utilises the norms adopted at the International Labour Conference to address global
challenges such as freedom of association and combating child labour. One ILO’s most
successful initiatives and the largest of its kind in the world is ILO’s International
Program on the Elimination of Child Labour (IPEC). The basis for IPEC rests firmly in
the norms established by ILO Conventions 138 and 182 (Minimum Age Convention and

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Worst Forms of Child Labour Convention, respectively) to provide a framework for the
technical cooperation program. The particular success of IPEC helps operationalise these
conventions and it is this model of working that ILO should apply to its technical
assistance more broadly.

ILO has recognised that achieving a greater number of ratifications of its international
instruments is not enough in itself: it is how countries use these norms and standards to
shape national policy agendas that is critical. ILO’s Committee of Experts on the
Application of Conventions and Recommendations regularly reviews and reports on the
application of ratified Conventions which are used by ILO to inform technical
cooperation.

c) Fills a policy or knowledge gap or develops innovative

STRONG
approaches

ILO makes distinctive contributions in the areas of labour-related research and statistics.
The quality of its work is highly regarded and fills a specialist role which complements
the work of other international bodies. ILO at headquarters (Geneva) and the Asia-Pacific
regional (Bangkok) office have specialist staff to provide technical assistance in this
respect; their work also forms key inputs to major international reports published by
ILO that measure global work statistics and productivity.

ILO also undertakes numerous joint projects with the International Monetary Fund,
World Bank, Organisation for Economic Cooperation and Development and the World
Trade Organization on matters of global interest. A particularly strong example is ILO’s
role as co-leader of the Social Protection Floor Initiative along with the World Health
Organization to help advise on the best approach to extending universal coverage of
social security. ILO also conducts research and advocacy in conjunction with the World
Trade Organization on the intersection between trade and labour which is an area of
growing interest as the number of bilateral and regional trade agreements grow around
the world.

In this respect, ILO could be more active in leveraging its specialised knowledge and
expertise to influence the global development agenda by pushing to mainstream labour
and sustainable economic development issues within development policy dialogue.
A common critique (which has also been presented during collection of evidence for the
Australian Multilateral Assessment) is that ILO can sometimes tend to isolate itself from
the broader development system. This might be the case because of its specialised role
and mandate. ILO, however, has important contributions to make to the broader
understanding of sustainable development. ILO is encouraged to continue its push to use
its knowledge, influence and innovative approaches to further integrate its agenda into
the international development system.

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 ORGANISATIONAL BEHAVIOUR
4. Strategic management and performance SATISFACTORY

ILO has a clear mandate and strong links from this mandate through its operational plans
and strategies. There remains some criticism that it can be sometimes inconsistent in
applying its strategy and plans to operationalise its mandate.

ILO’s Governing Body is tripartite, representing workers, employers and the governments
of member states. Such a structure is unique in the UN system. The Governing Body
provides adequate oversight of management performance.

In recent years, ILO has produced higher quality program and budget documents and
has moved to a more streamlined reporting system that describes priorities under the
19 outcomes of its strategic policy framework with measurable indicators. This has led to
better and more consistent implementation of monitoring and evaluation systems.

Recent efforts at headquarters level to more strategically align ILO programs and projects
need to be maintained and extended across all levels and offices of the organisation.

ILO has a strong leadership team among its senior executive. Priorities under its Human
Resources Strategy 2010–15 include addressing in-house resolution of staff conflict and
countering a ‘silo mentality’ culture.

a) Has clear mandate, strategy and plans effectively

STRONG
implemented

ILO operates under a clear mandate and targeted strategies through the Strategic Policy
Framework (SPF) and Programme and Budget (P&B). These documents together govern
ILO’s major planning and strategy development within a results-based programming
cycle. Both documents are organised around the four strategic objectives of ILO to
enhance linkages and ensure a focus on mandate and expertise. These have also been
developed following the adoption of the Declaration on Social Justice for a Fair
Globalisation 2008 which was adopted at the ninety-seventh session of the International
Labour Conference.

The Strategic Policy Framework 2010–15 was approved at the March 2009 Governing Body.
It identified 19 ‘outcomes’ required to achieve each of ILO’s four strategic objectives.
Outcomes are based on ILO experience and areas of comparative advantage. Importantly,
it includes performance indicators to measure the achievement of each outcome.
Australia will closely monitor the outcomes against the new SPF cycle at the Governing
Body in March 2012 at which the Programme Implementation Report 2010–11 will be
presented.

In recent years, ILO has produced higher quality Programme and Budget documents,
including moving to a more streamlined report that describes the priorities under the 19
outcomes of the Strategic Policy Framework and with measurable indicators. In addition
to this streamlined approach, ILO has taken into consideration current and emerging
global issues. For example, the 2010–11 Programme and Budget addressed the
implications of the economic and financial crisis on the world of work for achieving ILO

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core outcomes and provided concrete proposals or strategic coherence, particularly in the
context of member States’ constrained budgetary capabilities. The Programme and Budget
also recognised the need for increased funding for field delivery and services for the
Asia-Pacific region given that many Pacific Island countries are lagging in making progress
against the Millennium Development Goals.

b) Governing body is effective in guiding management SATISFACTORY

ILO Governing Body is tripartite in nature, reflecting the organisation and its mandate.
Such a structure is unique in the UN system. In recent years, the International Labour
Office (‘the Office’, functioning as ILO’s secretariat) has been responsive to the decisions
of the Governing Body.

The Governing Body has a high level of responsibility in providing strategic guidance on
the activities of the organisation. Papers presented to the Governing Body, and the range
of decisions it is required to make, are wide-ranging and comprehensive. The most recent
(March 2011) budget debates for the biennium 2012–13 show the Office’s responsiveness in
this respect: due to the concerns raised by some member countries reflecting domestic
budget pressures, the Office revised operational budgets downward in favour of greater
efficiencies.

In March 2011, the Governing Body achieved tripartite agreement to reform measures
applicable to the working and functioning of the Governing Body. The reforms relate to the
structure of the Governing Body, its agenda setting process, time management and
documentation and consultation with the aim of making it a more effective and efficient
management body. The restructure will streamline Governing Body attendance by
delegations and shorten meeting times overall. The effectiveness and practical application
of these reform measures will take time to bed down—the first opportunity for the
Governing Body to meet in its new form was in November 2011. Concerns remain that the
tripartite governing structure may impede its ability to encourage improvements in
operational effectiveness. Australia will monitor closely.

A notable feature of the Governing Body reform is that it has, in part, been designed to give
greater voice to the Government members of the Governing Body. These reforms will be
important to ensure a greater balance in influence exercised by all three tripartite partners.
The Australian Government will continue to monitor these reforms to assess their
effectiveness in implementation.

c) Has a sound framework for monitoring and evaluation,

and acts promptly to realign or amend programs not SATISFACTORY
delivering results

In recent years ILO has reformed many aspects of its monitoring and evaluation framework
including improving and strengthening the practice of independent evaluation in ILO.
Since 2005, ILO has increased the use of independent evaluations as a means to promote
transparency and accountability for the impact of ILO action. Independent evaluations are
now required for all projects over US$1 million. Independent evaluations have been
generally thorough in their scope and recommendations and ILO Governing Body regularly
reviews both the independent evaluations and ILO’s response to them.

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An internal evaluation unit (EVAL) works to monitor and report on the overall
effectiveness of ILO programs and policies. EVAL also reports to the ILO Director-General
(through the Evaluation Advisory Committee) and produces annual evaluation reports for
consideration by the ILO Governing Body Committee on Programme, Financial and
Administrative Committee. Greater responsibilities for follow-up on evaluation
recommendations was given to EVAL following an independent external evaluation of ILO
evaluation function in 2010. The new procedures put in place have resulted in improved
buy-in from line management and higher quality recommendations that are more
specifically linked to action.

ILO has stated that it does not renew projects that receive non-satisfactory final
evaluations. Limited evidence has been found, however, on the ability of the organisation
to actively realign or amend programs that are not delivering results while under-
performing activities are still in place.

d) Leadership is effective and human resources are

SATISFACTORY
well managed

ILO has a strong leadership team among its senior executive. Particularly in recent years,
ILO senior management has been actively pursuing the mainstreaming of the results-
based management agenda and continues to do so. It is recognised that ILO has adjusted
to the results-based management agenda later than other organisations and so Australia
will continue to watch with interest the bedding-down of results-based management
systems with other like-minded donor countries. The Director-General in particular has
been responsible for raising ILO’s profile across the international system, particularly in
light of the global financial crisis. The Director-General however has announced his
retirement leaving the position midway through his third term in 2012. The senior
management team in place now is strong, but Australia will monitor ILO’s response to the
departure of the Director-General.

ILO’s efforts in its human resources management will remain an area of interest for
Australia. The Human Resources Strategy 2010–15 is one of the four integrated results-
based management strategies endorsed by ILO at the November 2009 Governing Body.
The strategy focuses on aligning with the strategic objectives of the ILO, the Strategic
Policy Framework 2010–15 and the Programme and Budget. Australia will closely monitor
the progress of the implementation of this strategy in 2012.

Despite this positive move, some issues remain on the radar for evaluation. At the
adoption of the human resources Strategy paper, a notable inclusion was money
dedicated to the in-house resolution of staff conflict and countering an existing culture of
silo mentality. Addressing these will contribute to a more effective organisation. Recent
meetings of ILO have also been marked by ILO staff protests about working conditions.
The ILO Governing Body is able to monitor progress on human resources issues by
hearing directly from the executive responsible for HR and also from a staff
representative’s report.

One issue that needs attention, but is also common to many UN bodies and not just ILO, is
the ability to ensure the right staff go to the right positions in the field. In particular, the
leadership of country managers has proven to have a direct correlation to the quality of

Australian Multilateral Assessment (ILO) March 2012  www.ausaid.gov.au 13

project implementation and delivery. Furthermore, evidence shows that an inability to fill
some positions (both at country head-level, and at an activity-level) can adversely impact
project implementation.

5. Cost and value consciousness SATISFACTORY

While ILO’s Governing Body and annual International Labour Conference have good
formal oversight across budgets and scrutinise costs, a culture of cost awareness needs to
be embedded across the organisation.

The Governing Body generally considers value for money and has demonstrated
responsiveness to the concerns of member states in relation to its budget. In March 2011,
it initiated budget cutting and efficiency measures, including establishing an ongoing
expenditure review committee to provide members with direct input into budgetary
processes and proposals throughout each two-year budget cycle. The first report of this
committee is due before the end of 2011.

There is little evidence that ILO challenges its partners to seek more efficient approaches
to budgeting and disbursement.

a) Governing body and management regularly scrutinise costs

SATISFACTORY
and assess value for money

Recent Governing Body meetings on the ILO budget reflect concerns of many of the
traditional donor countries and their limited fiscal ability to increase funding to
international organisations. ILO has sought to maintain its budget in real terms (that is,
providing for small budget increases incorporating inflation in costs) and in March 2011
came up with a range of budget cutting and efficiency measures designed to address the
concern of many of the major donor countries that were in turn facing their own domestic
budgetary pressures.

These negotiations in March 2011 demonstrated a level of responsiveness from the Office,
and saw its acceptance of a proposal for an ongoing expenditure review committee—a
proposal that was also well received by many governments. This committee will monitor
and review all ILO expenditure, with a view to improving effectiveness and efficiency and
will feed into biennial budget preparation. The first report of this committee is due before
the end of 2011.

b) Rates of return and cost effectiveness are important factors

SATISFACTORY
in decision making

ILO has, in recent years, become acutely aware of the need for greater focus on cost and
value. Previous complacency on this issue has seen governments and Governing Body
members demand and receive improvement in this area. As mentioned in other criteria in
this assessment, the March 2011 negotiations for the two-year budget period of 2012–2013
saw the Office offer up a range of budget cuts in order to satisfy ILO members who were
calling for a zero nominal-growth budget.

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In some ways then, it can be seen that an initial shift to a culture of cost awareness is
being driven by members and the Office is being pulled along by this move. This
assessment takes note of ILO’s response to the UK Multilateral Aid Review published in
March 2011, and Australia continues to encourage all levels of the Office, from
headquarters through to country-level, to become more proactive in taking rates of return
and cost effectiveness into consideration at all stages of the project management and
budget cycle.

c) Challenges and supports partners to think about value

WEAK
for money

Minimal evidence was found on this criterion.

The Australian Mulitlateral Assessment recommends ILO should undertake activities that
challenge its partners to seek more efficient approaches to budgeting and disbursement.
This is particularly important given that ILO frequently relies on implementing partners
for their development activities (including some under the Partnership Agreement).

6. Partnership behaviour STRONG

Partnership is at the core of ILO’s structure and mandate. Its tripartite structure enables
governments, employers and workers of each member country to participate as equal
partners in its activities. From this perspective, ILO is highly effective in bringing key
stakeholders together.

ILO’s approach to partner country priorities and systems in the implementation of its
Decent Work Agenda is guided by overarching principles of country ownership and
alignment with partner priorities.

Feedback at country-level indicates significant variation in ILO’s engagement with

partners. For example in China, ILO was commended for providing technical advisory
services to the government on legislation for employment promotion and social insurance
law, and in working with non-government organisations and universities to promote the
employment rights and employability of people with disability. In Kiribati, however, ILO
was subject to strong government criticism for its piecemeal and inflexible support for
youth employment.

a) Works effectively in partnership with others STRONG

ILO’s unique tripartite structure enables governments, employers and workers of each
member country to participate directly, as equal partners, in its activities. ILO brings
together these three groups and promotes open dialogue through the International
Labour Conference and the Governing Body. Decisions taken by the Governing Body and
the International Labour Conference are taken by tripartite consensus. Tripartism is a key
aspect of the ILO that sets it apart from other institutions in the multilateral system.

Social dialogue is one of ILO’s strategic objectives. ILO encourages tripartism within
member States by promoting social dialogue to help design and implement national

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policies. ILO helps governments, employers’ and workers’ organisations to establish
sound labour relations, adapt labour laws to meet changing economic and social needs
and improve labour administration. One strong example of ILO in this respect is its Better
Work Programme in South-East Asia, in particular the Better Factories Cambodia
program. This innovative program brings together factory workers and owners, workers’
groups, employers’ groups, government and multinational buyers to create a
strengthened audit system that aims to simultaneously improve working conditions and
business sustainability.

The tripartite model has strengths and weaknesses. In many respects, tripartism allows
for government decision making to be complemented by the input and expertise of their
social partners, the ‘real economy’ actors. At an institutional-level however, ILO operates
on a consensus basis that requires all tripartite partners to agree on decision points.
While this may indeed be beneficial to ensure all partners are moving in the same
direction, it can sometimes mean that decision making processes are slowed down or
direction changed in order to accommodate the interests of all involved.

Evidence gathered during headquarter and country visits indicate that while ILO is seen
as an effective organisation in many respects, there are some instances where ILO is
perceived to situate itself ‘outside’ the in-country team of development organisations.
This may be because ILO is a highly specialised agency that has quite a unique remit that
other actors don’t often actively engage in. This situation is then juxtaposed with other
situations where ILO does play a substantial role in the in-country coordination of
UN activities with ILO staff taking the role of Resident Coordinator in some locations.
This assessment concludes that the operation and characteristics of ILO in-country is
highly dependent on the Country Director and the personal angle they bring to their role.
ILO would benefit from a more structured organisational approach to mainstreaming the
labour and employment agenda within the wider traditional development system.
This would bring a more standardised approach to partnerships with other agencies
in-country.

b) Places value on alignment with partner countries’ priorities

STRONG
and systems

ILO’s approach to partner countries priorities and systems in the implementation of its
Decent Work Agenda is articulated in ILO’s Technical Cooperation Strategy.

Many countries have national development plans or sets of social and economic policies
that address issues of relevance to ILO mandate such as youth employment, vocational
training and the promotion of gender equality. Many of those plans now refer to
internationally agreed goals such as the Millennium Development Goals, and poverty
reduction strategies.

ILO works through national development plans and policies in defining the priorities and
outcomes of each Decent Work Country Programmes (DWCP). These plans seek to further
promote the use of national systems by strengthening the institutional capacity of
constituents. Decent Work Country Programmes also recognise the importance of the
ownership of development policies by partner countries and encourage the participation
of civil society, particularly national social partners.

Australian Multilateral Assessment (ILO) March 2012  www.ausaid.gov.au 16

 c) Provides voice for partners and other stakeholders in
SATISFACTORY
decision making

ILO provides a voice for partners and stakeholders at the institutional-level through its
formal bodies (International Labour Conference and Governing Body); and close
consultation with tripartite stakeholders in national contexts.

ILO takes a consultative approach to program design to a large extent because of its
organisational basis in tripartism and its mandate to foster social dialogue. In this regard,
social partners are often well represented in program design consultations and are often
active participants in many stages of project cycle management.

Some evidence was gathered during country visits and feedback from Australian overseas
missions that would indicate the approach to consultation and inclusion of partners in
program design and delivery is not always systematic and standardised. While it might
not always be possible to undertake in-depth consultations, ILO would benefit from
regular auditing of partner consultations and to incorporate lessons learned into future
endeavours particularly at country-level.

7. Transparency and accountability SATISFACTORY

ILO has taken steps to improve its transparency and accountability. Its use of its biennial
program and budget document to outline resource allocation is adequate, and its use of
internal and external audit functions is good.

ILO publishes a wide range of material on its website, but it could be better at publicly
releasing project assessment information and encouraging higher standards of
transparency and accountability in its partners.

While its accountability systems appear to generally work well, ILO has impressed with
its commitment to developing stronger frameworks and policies relevant to transparency,
accountability and governance.

a) Routinely publishes comprehensive operational

SATISFACTORY
information, subject to justifiable confidentiality

ILO publishes a good deal of operational information on its website and each country,
through Governing Body members, has the opportunity to comment and make
suggestions for amendment. Reports are released by the Office to give constituents due
time to consider prior to a meeting.

ILO has a public information disclosure policy in place and has committed to being an
open and transparent organisation. Some project information is however only available
to donors via a password-locked website known as the Donor Dashboard. The Dashboard
itself is often difficult to use and the depth of information available on the Dashboard
varies greatly across projects. Widening the access to key documents, databases and
dashboards could enhance ILO’s overall transparency and accountability.

Australian Multilateral Assessment (ILO) March 2012  www.ausaid.gov.au 17

 b) Is transparent in resource allocation, budget management
SATISFACTORY
and operational planning

The main document that guides resource allocation and operational planning is the
Programme and Budget document. The document sets out the resources strategy for the
period in question.

Resources are allocated per strategic objective and region. The formulation of the
outcomes and related strategies are subject to a basic criterion of relevance, that is, how
ILO can make a difference in advancing the Decent Work Agenda. This has tended to work
well to date and the approach to resource allocation continues to be supported by the
Governing Body.

At the activity-level, financial management documents could be enhanced by more

detailed commentary on any variation between anticipated and actual expenditure.
Similarly, reports could link in more closely to financial reports to better illustrate
progress.

Beyond the Programme and Budget, minimal evidence was found during country visits
and via feedback from Australian overseas missions to support a stronger rating in this
criterion.

c) Adheres to high standards of financial management, audit,

SATISFACTORY
risk management and fraud prevention

In recent years, ILO has embarked on a process of continuous improvement in respect of

its audit and risk management practices. In 2010, the ILO Director-General formalised
ILO’s accountability framework in line with the recommendations of the Report of the
External Auditor 2006–07 and the Report of the Internal Auditor 2008. ILO’s
accountability framework reflects international standards such as the Standards of
Conduct for the International Civil Service (2001). Australia has been pleased with these
moves to strengthen ILO’s audit and risk management practices, and will need to closely
monitor the ongoing implementation and review of these frameworks.

d) Promotes transparency and accountability in partners and

WEAK
recipients

A primary function of ILO’s technical cooperation focuses on the promotion of capacity

building for tripartite partners to strengthen skills such as governance and accountability
and to encourage them to monitor decent work outcomes.

Beyond this focus on capacity building for partners, there is minimal evidence of ILO
actively promoting better transparency and accountability by its partners. Given the
centrality of capacity building of tripartite partners to the work of the ILO, this is an area
that could be improved to ensure value for money.

© Commonwealth of Australia 2012

This document is online at www.ausaid.gov.au/publications

Australian Multilateral Assessment (ILO) March 2012  www.ausaid.gov.au 18