ILC89 - Report of the Committee on Social Security

ILO is a specialized agency of the United Nations

89th Session, 5 - 21 June 2001

Report of the Committee on Social Security

Committee report

Submission, discussion and adoption

Speakers: Mr. Laroque, Mr. De Regil, Mr. Mansfield, Ms. Samuel, Mr. Oyna, Mr. Das, Mr. Murro, Mr. Truebody, Mr. Pandeni, Mr. España Smith, Mr. Asfour, Mr. Thierry, Ms. Buverud Pedersen

The PRESIDENT — We proceed now to the examination of the report of the Committee on Social Security, which is contained in Provisional Record No. 16.

I give the floor to Mr. Laroque, Reporter of the Committee, to submit the report to plenary.

Original French: Mr. LAROQUE (Government adviser, France; Reporter of the Committee on Social Security) — As Reporter for the Committee on Social Security, I am honoured to present the report of the Committee to the 89th Session of the International Labour Conference. The report was adopted by the Committee on Monday, 18 June 2001. Discussions in the Committee covered a number of issues defined in Report VI — Social security: Issues, challenges and prospects. The high quality of the report was emphasized by delegates, although certain delegates proposed slightly different views on some points.

The knowledge and various experiences shared by Employer, Worker and Government members of the Committee produced a very rich general discussion, during which various points of view emerged, as did points of convergence. I shall present this report to you by on the one hand telling you how the Committee conducted its work and on the other by describing the general discussion and conclusions adopted by the Committee.

First of all, I shall tell you how the Committee conducted its work. The Committee followed the normal procedure for the adoption of reports, but the teamwork and consensus building in the Committee were remarkable.

This positive and constructive climate made it possible to avoid the failure experienced by several recent international conferences, such as the 13th Conference of American States Members of the ILO and the Commission for Social Development of the United Nations, held this year in New York. Social security is of the utmost importance in the debate on decent work and globalization.

The report followed the normal procedure for the adoption of reports. In March 1999 the Governing Body of the ILO decided to place social security on the agenda of the Conference and defined the subject to be addressed. The preparation of the report of the Office, which was the basis for our work, required a great deal of concertation within the Office because of the interactions between social security and other aspects of work and employment.

During this session of the Conference, the work lasted three weeks and covered several phases. First, we had a week of general discussion. The second week was used for the work on the conclusions by the Drafting Group and for the consideration of the conclusions by the Committee. The third week was devoted to the consideration and adoption of the report in the Committee on Monday the 18th, and today, we are adopting the report and the conclusions in the plenary.

The report is made up of three parts, which reflect the three phases of our work. In the annex you will find the resolution and conclusions on social security adopted by the Committee.

The report was drawn up using a new method of presentation which, as part of the Director-General’s modernization efforts, is aimed at making reports for general discussion more user-friendly. The report thus outlines main ideas without referring, in the part entitled “General discussion”, to each of the statements made by delegates. This practice was already used last year for the report of the Committee on Human Resource Development. It greatly improves the quality of the report, and makes it a truly international document. The presentation of the general discussion has headings which correspond to the main points of the general discussion.

The report is the result of teamwork and consensus building. There was a truly remarkable climate of cooperation and a strong will to succeed in our Committee, in particular the Drafting Group. The Drafting Group was made up of five members from each group, and drew up the draft conclusions last week on the basis of statements delivered in the general discussion. It worked in four sittings, including one night sitting, and we finished our last sitting ten minutes after our deadline.

The Government representatives of the five regions of the world represented in the Drafting Group set forth the viewpoints of their regions and worked to improve the draft conclusions. The same was true for the representatives of the Workers and Employers, who worked very hard to overcome differences within their groups so that we could have a document which would be valid and acceptable to Workers, Employers and the States, and a document which would be as far-reaching as possible, taking into consideration the differences in the social security systems in the world and various sensitivities.

If you read the report you will see the divergences of opinion in the general discussion and the reasons for failure of other international meetings on social security. This shows that our success in obtaining consensus was by no means simple.

The low number of amendments proposed — only 28 — confirms that the text drawn up by the Drafting Group struck the necessary balance. Thanks to that, there was a quick examination of the amendments, during which they were accepted, clarified or slightly modified. We rejected some amendments which were of great interest, but which if taken on board might have jeopardized the precarious consensus achieved by the two social partners.

As Reporter, I would like to pay tribute particularly to our Chairperson, Ms. Lenia Samuel, and to the Worker Vice-Chairperson, Mr. Bill Mansfield, and the Employer Vice-Chairperson, Mr. Jorge de Regil. I would like to thank them for their talent, authority and above all for their constant spirit of teamwork, which made it possible to have frank and open exchanges in a remarkably constructive atmosphere and to overcome obstacles. I would also like to stress how hard all the delegates worked towards achieving a positive consensus to help ensure more social security for all mankind.

I would like to thank the secretariat for its efficient teamwork, which enabled us to achieve our results in the best possible conditions. The team, led by Mr. Emmanuel Reynaud, did a great deal of difficult work, sometimes toiling until 1 a.m., and starting off again at 4.30 a.m., without even mentioning weekends. It worked well with all the other teams in the Office which provided logistic services, interpretation and translation.

Now that I have told you how the Committee conducted its work, I would like to inform you briefly, at the risk of oversimplifying, about the general discussion and the conclusions which appear in the document submitted to you. The Chairperson and the Vice-Chairpersons who will speak after me will further elaborate on my comments.

I shall follow the six points in the general discussion, which you will also find in the conclusions. The conclusions, however, begin with an initial paragraph which recalls the Declaration of Philadelphia and advocates the launching of a new campaign to improve and extend social security coverage to all those who need this protection, so as to bring to an end a fundamental injustice suffered by hundreds of millions of persons in the member States.

On the first point, which is the link between social security and development, the positions of the groups and the delegates diverged. The Employers’ group stressed the need for the economy to be capable of financing social security and underscored the cost of social security, whereas the Workers’ group stressed the positive role of social security for the economy and emphasized that globalization rendered social security more essential than ever. The delegates of the States tended to cite one or the other of these aspects. One of them proposed an amendment to call attention to the fact that social security “ensures income redistribution for the benefit of persons faced with social risks. It consists mainly of social transfers which, while they represent part of the labour costs for enterprises are not, at the macroeconomic level, a burden for the nation”, which might be handicap to international competitivity. The precarious balance of consensus between the Workers’ and Employers’ groups made it impossible to accept this amendment. A subamendment was adopted which confined itself to stating that, while social security represents a cost for enterprises, it is at the same time an investment in the human being, or a support for the human being.

The agreed conclusions recognized important principles in paragraphs 2 to 4, particularly the significance of social security as a fundamental right of the human being, and as an essential tool in achieving social cohesion (paragraph 2) and the economic role of social security, which promotes productivity and is becoming increasingly necessary in the context of globalization and structural adjustment policies (paragraph 3). In paragraph 4, the conclusions state that while there is no single right model of social security, all systems should conform to certain basic principles such as secure, non-discriminatory benefit payments, sound and transparent management, the lowest possible administrative costs, a strong role for the social partners, public confidence and good governance.

On point 2, “Extension of social security coverage”, there was unanimity about the gradual extension of social security coverage (paragraphs 5 and 6), either by compulsory or by voluntary insurance mechanisms such as micro insurance, which could be a useful first stage, or by means of social assistance.

An integrated national strategy for social security was recommended. This objective means that we will have to encourage the integration of the informal economy into the formal economy.

Point 3 concerned income security for the unemployed and employment. Although there were disagreements on the effect on employment of unemployment insurance, a consensus was reached on the priority objective of access to decent work, which implies that unemployment benefits should be designed so that they do not create dependency or barriers to employment, and that they have to be coordinated with active employment policy measures, such as training and lifelong learning. When it is impossible to provide unemployment benefits, it is necessary to create jobs in such projects as labour-intensive public works (paragraph 7).

Point 4 deals with equality between men and women. This objective (paragraphs 8 and 9) was nearly unanimously supported, not only as a foundation and a theme of social security, but also for the development of society. Delegates of some States informed us of their achievements in this area. The measures which are required, in particular strengthening of individual rights, are not confined to social security rules. They entail a more general approach, which would encompass in particular the need to combat wage discrimination.

I now turn to point 5, Financing of social security and ageing. Here divergences were greatest, and most keenly felt, both between the two groups of social partners and between Government delegates. On the one hand, we heard advocates of the state pay-as-you-go systems, and on the other hand we heard advocates of minimum pensions complemented with individually funded reserve schemes. The report reflects the arguments of both sides.

Points of agreement were, however, identified in the conclusions, in paragraphs 11 to 15, and I will mention six of them.

First, ageing strongly affects retirement pension systems, whether financed as pay-as-you-go schemes or as funded systems. For the latter, financial assets are sold to pay for pensions and are purchased by the working generation. The solution is first and foremost to increase employment rates, particularly among women, older workers, youth and persons with disabilities, and to achieve higher levels of sustainable economic growth. The second main point of agreement is that ageing affects both pensions and the cost of health care. The third is that the HIV/AIDS pandemic has catastrophic consequences which also affect the financial balance of social security systems. Fourthly, in pay-as-you-go retirement systems with fixed benefits, the risk is carried collectively, whereas in systems based on individual savings accounts, the risk is borne by the individual. Statutory retirement schemes must guarantee sufficient levels of benefits and ensure national solidarity. Supplementary systems can be a valuable contribution, but in most cases they cannot replace the statutory systems. Any subsidies or tax incentives for these systems should be geared towards low- or middle-income workers.

The fifth main point of agreement is that for the State to establish an effective regulatory framework and mechanisms for application and monitoring. The sixth point is that each society must decide which combination of systems meets its needs, taking into account the conclusions of the general discussion of the report and the relevant standards of the ILO relating to social security.

The last area of discussion was “Social dialogue and ILO activities”. While certain Government delegates called into question the importance of the role of the social partners in reducing exclusion, their role is clearly set out both in the general management of social security systems (paragraph 4) and in the management of supplementary regimes (paragraph 13). The need for social dialogue to ensure the effectiveness of measures to establish or extend social security coverage is affirmed in paragraph 16. The State has primary responsibility for promoting, improving and extending social security coverage.

Concerning the standard-setting work of the ILO, various views were expressed. It was stated that certain standards have become outdated as society has changed, particularly in the case of the Social Security (Minimum Standards) Convention, 1952 (No. 102), which was thought to be based on the model of the male breadwinner and the female homemaker. The Employers’ group stated that the ILO standards were relevant, but it was in favour of revising them within an integrated approach. The Workers’ group thought it was better to try the integrated approach first in the area of occupational safety and health and that for the moment it was necessary to promote ratification of existing Conventions which the Governing Body considered to be relevant and sufficiently flexible to adapt to the various situations. Government delegates were divided on the various possible approaches. The Committee therefore did not adopt any recommendations on future standard-setting activities of the ILO. It was decided to discuss these at the Governing Body session in late 2001.

On the other hand, a definition of national strategies to achieve the objective of social security for all is set out in paragraph 16. The Committee on Social Security proposes to the Conference four main fields of activity to improve and extend social security coverage to all those who need it. I shall not go into the details of these useful proposals, but I will briefly mention them. The first consists in launching a broad-based campaign to promote the extension of social security coverage. The second is to urge governments to give higher priority to social security. The third is to provide technical assistance when necessary, and to promote research and share information on good practices in specific areas. The fourth is to develop inter-agency cooperation in social security and to invite the International Monetary Fund and the World Bank to support the conclusions adopted by the Conference, and to be partners in promoting social justice and solidarity by extending full social security coverage. These are the salient features of the report, the resolution and the conclusions. I hope I have described them accurately, although I have had to give an abridged version of a complex and multifaceted debate. We have cooperated in a constructive manner on a tripartite basis. I, therefore, recommend the adoption of this report because it can serve to strengthen the role of the ILO in social security, for the benefit of all mankind.

Original Spanish: Mr. DE REGIL (Employers’ delegate, Mexico; Employer Vice-Chairperson of the Committee on Social Security) — Social security is an old instrument of social justice recognized by the ILO and still beyond the reach of a large number of inhabitants of our planet. Consequently, this general discussion on social security has always been considered as a challenge, in view of the very size of the subject and the immense variety of national circumstances, societies and economies. The report prepared by the Office confirms and captures this great variety.

Social security is an important subject for the ILO, both because it is in its mandate and also because of the fact that this is in an integrating feature for a proper social framework in any country at the beginning of the twenty-first century. The importance of this subject can be seen in the number of countries which today have difficulties in achieving a decent coverage and sustainability in social security schemes. We have also seen that, for many countries, bringing in a social security scheme or increasing its scope is still beyond the reach of their governments.

These challenges require a thorough study and new responses.

This Committee was our opportunity to explore which answers can be found, answers which will look towards the future and which will avoid the errors of the past. It was an opportunity to bring forward real solutions rather than air impractical theories.

The conclusions which are placed before you for adoption recognize the requirements of the present world but also recognize and indeed emphasize the realities of today. It is quite clear that there is not one single approach. There cannot be one single solution for everybody. It is also clear that the answers have to be tailored for the problem. There is no universal panacea. The conclusions reflect the requirements of each country to determine what it can do and how to go about it. We recognize that the systems and proposals of social security all have their merits and have to be looked at carefully. The merits and the value of these proposals are up to each nation to determine. We should, with all due honesty and good faith, review our opinions, not to speak of our previous prejudices, as we should avoid a priori condemnation of new and innovative systems and solutions.

These conclusions recognize that social security changes as society changes. It recognizes that it is not possible to do everything at the same time, that there is a need to proceed gradually and that different realities have to be dealt with in different ways. Saying this, the conclusions should help those countries which are having difficulty in understanding where their obstacles are. The idea is to propose solutions to problems. We cannot accept that the problem can outweigh the solution. We can provide social security. We can make it an acceptable scheme for all.

These conclusions bring to the Office an extensive programme, but it is clear and it is realistic. We welcome the size of the programme because indeed there is a lot to be done, and a lot to be researched before the ILO can once again take up a leading position in the subject which is of such vital importance for all societies.

We think that the expectations that this Committee has invested in the Office should be supported immediately and steps should be taken to begin work now. That is our hope.

Future discussions, technical meetings, and research should be solidly implanted in the realities of each nation, in the realities of each society and the realities of each economy.

For the Employers, the basic features, in order to achieve a positive result which should be realistic and sustainable, are as follows:

The creation or maintenance of a strong, sustainable economy featuring constant growth. We recognize that as a prerequisite for any society before you can even start talking about social expenditure. Each country should be capable of paying for its social security system and sustaining it.

It is indispensable to find the proper balance between what each country can spend without compromising its economic growth, the creation of employment and its competitive position. The governments here have a responsibility of ensuring that there is the right environment to allow the private sector to grow, because that is the driving force of development. The governments have to recognize the barriers which can stand in the way of growth, get rid of them and take care that new obstacles are not created. In the discussion a lot was said to the effect that the best social security is based upon decent jobs. We think that that is true provided governments can facilitate the proper environment to create employment and promote the development of business. We hope that governments will do what has to be done to this end.

Each answer, each system proposed has to be designed by and for those who require its assistance. The systems have to be simple, and free of bureaucratic overburden. Since social security is not a static matter, the answers also have to be flexible and capable of adapting rapidly to the changing circumstances of economics and societies.

In this discussion, the subject of “political will” was often referred to. Governments therefore should provide appropriate answers to social security. However, it was also stated that governments should receive the necessary support in order to be able to take appropriate action. That is perfectly understandable. Consequently, we must explore the ways and means in which this political will can be mobilized. There is no doubt that a consensus has to be sought here and the organizations of employers and workers are key factors in forming consensus and in sustaining it, thus providing the support and confidence to the governments which have to act. All governments have to deal with a variety of claims on their budgets. These demands are competitive and they should define the priorities of each programme. Social dialogue therefore is indispensable because it is through such dialogue that you can get the right answers to these demands without falling into mere popularistic slogan-mongering. Social security is a vital subject for the society of each nation; each citizen has to play his role. It is easy to find rapid solutions but very often that merely means transferring the burden of responsibility onto the shoulders of just a few and the employers are nearly always those who receive the burden with all the consequences that that has for society as a whole. If really and truly we want a future for social security, if we take this question seriously, if we want long-term solutions, then such solutions have no place. We employers play our part and we will continue to do so but we also require others to do their duty. It can easily be seen from the conclusions that the proper design for the system, its proper governance and its correct administration are essential features for success. If we do not have these features present then you cannot satisfy the expectations of society. Each country requires to make sure that the benefits of social security are not lost by inbuilt problems of the system.

Consequently, each system should be corrected and revised, so as to make quite sure that the benefits get to those who require them. Resistance to change very often is from the inside, either because of fear of change itself, or because there are vested interests.

Of the groups which are outside of social security as the situation is today, the informal sector is the biggest challenge for many countries. Providing for those persons who work in the informal economy, and finding some way of formalizing this great economic force, is a formidable challenge. The conclusions reflect this, and propose ways and means so that social security can become one of the ways of getting into the formal economy for these people who are sometimes much more numerous than those who work in the formal sector.

We hope that this initial reference will be useful for the Office in preparing the forthcoming general discussion upon the informal sector.

The conclusions refer also to questions concerning self-employment and migrant work. Migrant workers constitute an interesting challenge for those countries which take in migrants. These people often, when they go back to their countries of origin, lose acquired rights and that point requires future examination.

We began our discussion with no intention of telling anyone what should be done, and very fortunately this attitude prevailed in each group. In a frank, open discussion, the Committee has come to conclusions which we think are extremely useful indeed.

We also think that we have achieved the objective of providing the Organization with guidelines, clear guidelines, so as to enable us to move towards social security for the member States, and also which will help create a solid platform upon which the ILO can demonstrate its position as the international organization in the best position to discuss this vital subject.

In conclusion, I would like to express my thanks to all the Employer members of the Committee for their very useful input and their support.

I also thank the representatives of the Governments for their open-mindedness and their contributions to a document which is now placed before you for approval.

And finally, some special words for the Workers’ group, particularly my colleague, the Worker Vice-Chairperson, Bill Mansfield.

The result which we have achieved to a great extent is due to the fact that we were capable, once again, of speaking frankly and honestly. We were able to put aside the ghosts of the past and we were able to put to one side the prejudices still held by some. When we sat down at the table we wanted to look forward, and consequently Bill, I would like to thank you and your group very warmly indeed. I hope that what we have achieved today and the experience in negotiating this subject, with the support of the secretariat, will become the rule for all future discussions. I am sure that with this rule it has become clear that the idea of the class struggle is a matter for the past, the remote nineteenth century. The way in which we all worked together, members of the Committee, the Chairperson, Ms. Samuel, the secretariat under Mr. Reynaud, Mr. Beattie and Ms. Juvet-Mir, the report under Mr. Laroque, and the Drafting Group, all of whom worked in a very satisfactory manner, is the reason why we stand before you today with this excellent document for adoption.

Mr. MANSFIELD (Workers’ delegate, Australia; Worker Vice-Chairperson of the Committee on Social Security) — At the outset, I wish to express my thanks to the Chairperson of the Committee, Ms. Lenia Samuel, the Employer Vice-Chairperson, Mr. Jorge de Regil, and all members of the Committee, especially my colleagues on the Workers’ benches. Their efforts enabled the Committee to produce a result which we believe can make a difference.

Special thanks are also due to the ILO staff for their professionalism and assistance, which was an essential contribution to the result which was achieved. Mr. Emmanuel Reynaud, Mr. Roger Beattie and Ms. Antoinette Juvet-Mir, and their staff, deserve special recognition.

Around 200 members of this tripartite Conference have come together to consider the issue of social security. Together we have brought forward a vision, a set of values and a substantial programme for the ILO’s role in bringing social security to the hundreds of millions who make up the excluded majority.

The Workers’ group came to this Conference with one objective with regard to social security. That was to work with employers and governments to enable the ILO to move forward to address this fundamental injustice which sees hundreds of millions of workers and their families throughout the world without the benefits of a system of health care, without unemployment or retirement benefits, and largely in unregulated, low-paid work in the informal economy.

We said to each other that we could only be proud of our efforts if we could say with conviction that we, as a Committee, made a difference so that, as far as this institution is able, social security will be made available for those who in the past have been excluded, and maintained for those who have it already.

I recently listened to a speech by Nelson Mandela, who was outlining how we can make a difference. He said we must “light the mind, warm the heart and change the world”. In our Committee discussion, and through the Office report, we did “light the mind”. No one who begins to understand the circumstances of the excluded majority could not “warm the heart”. The question is, can we “change the world”?

Last week I was working one evening and a programme relating to a community-based housing project for disadvantaged people came on the television. In part it focused on a woman who was standing in the half-finished framework of what would be her new home. The home was small; the brick walls were roughly made; the window frames were surrounded by gaps; and she was happy. Her smile was broad and constant. Before, she had virtually nothing, and now she has something. This is how it should be with social security. For those who have nothing, we must provide something and over time we must develop a system.

This example illustrates the North-South divide or, more precisely, the divide between those who have, like myself, and those who have not. The divide has been growing rather than reducing. The increase in the number of poor in the world, the growing levels of unemployment in many countries, and the absence of social security, are all manifestations of this issue.

If our world is to survive and we are to live with peace and social justice, the ILO must help to light our minds on fresh solutions, by which those who have-not can obtain more advantage from the world’s economic and social development.

The Committee has given the Director-General a major challenge, namely to renew the campaign, started in 1944, to bring social security to all those in need. The Workers’ group believes that the conclusions reached by the Committee reflect universal values held by the social partners and represent a substantial set of objectives for the ILO.

They include, as our Reporter and Mr. de Regil had said:

acknowledging that social security is a basic human right which can enhance productivity and achieve both social and economic progress. At in a time of rapid change in our world, this is more necessary than ever;
they state that there is no single model which will suit all nations, but stress that the State has a priority role in facilitating, promoting and extending social security;
the principles which should underpin all schemes are set out:
benefits should be secure and non-discriminatory;
schemes should be well managed;
administrative costs should be as low as practicable;
there should be a strong role for the social partners; and
good governance is essential.

(Unfortunately, many social security reforms that have taken place in some regions in recent years have not respected these principles They include examples of privatization which we do not support.)

the extension of social security coverage to the excluded majority is recorded as the highest priority and mechanisms for achieving this are set out;
the objective of moving people from the informal economy to the formal economy is acknowledged. We all know that, in large part, this requires good government, strong but sustainable economic growth, job creation and a fair distribution of the nation’s wealth;
the link between unemployment and poverty is made. The importance of education and skills is stated. Active labour market policies must ensure that we do not trap people in social security systems, but at the same time, adequate unemployment benefits need to be paid;
gender discrimination is recognized as a major issue. We must work to overcome it, where necessary by policies which promote positive discrimination to ensure that women are not left with inadequate social security benefits;
many of our societies are ageing. Fewer children are being born, people are living longer and the workforce must support more dependants. The answer is not to reduce social security benefits, but to increase levels of employment and boost economic growth;
HIV/AIDS is acknowledged as a major problem which requires more urgent attention by the ILO and other institutions;
finally, and most importantly, it sets out a wide-ranging and important work programme for the ILO to undertake in conjunction with member States, including a major campaign to promote the extension of social security and calling on governments to approach the ILO for special assistance to achieve outcomes which significantly improve the application of social security to the excluded majority.

With regard to the ILO’s work programme, the Committee, I believe, would want to stress one word — “outcomes”. The poor have been waiting a long time for social justice. Any ILO research, technical advice or expert meetings should be judged on one criterion — does it result in outcomes whereby social security is made more available to the excluded majority, and are deficiencies in existing systems being remedied?

I work for a national union council in Australia. It is easy for our affiliated unions to hand a problem over to the council they work for and say “please fix it”. Sometimes they do not even say “please”. Often these are problems which should be a joint responsibility, and this is the case with social security. If we simply give the task to the ILO without acting at home, our outcomes will be much reduced. States must lead the way and their actions are crucial. Employers and unions must also accept part of the responsibility and work alongside the State and the ILO. We all understand that to be successful the social security programme needs resources. The ILO has to re-examine its priorities to ensure that the necessary funds and staff are put in place to achieve the results that are needed. It may be that we need extra assistance from external funds. I would hope that the Governing Body will receive a report on this matter in November.

The Director-General, Mr. Somavia, may recall words he said in a speech to a global welfare conference in the mid-1990s which remain valid today. He said: “Wounds inflicted on people by poverty, deprivation of dignity, by exclusion and lack of opportunity for productive employment will continue to fester until we acknowledge the need to … work together to make our common dwelling truly secure for people everywhere.”

He concluded his speech by saying that we: “… should never fear to be out in front with ideas and values. … For a dreamer is one who can find his way by moonlight and sees the dawn before the rest of the world.”

We know that many hundreds of millions of people dream of a better life with productive jobs, democratic governments, fair labour standards and social security. The class war that Mr. de Regil referred to will not exist if we have those factors, if we have productive jobs; if we have democratic governments; if we have fair labour standards and social security. If we have a country where those things are absent there will be conflict, there is no doubt of that. We urge the Director-General to continue to use the resources of the ILO to achieve outcomes in the area of social security which can help make that dream a reality, so that together we might change the world.

Ms. SAMUEL (Government delegate, Cyprus; Chairperson of the Committee on Social Security) — When I was asked whether I would agree to chair the Committee on Social Security, my heart immediately answered “yes”, for social security has always occupied a cherished place in it. Indeed, when one considers the health and well-being of our 6 billion fellow inhabitants of this globe, it is hard to image a topic of greater importance than social security. When one considers that more than half of humanity has little or no access to social security, it is hard to imagine a greater social injustice. My head counselled me to think it over. Social security is a complex issue and an increasingly contentious one. Not only did the social partners have differing concerns but the problems and priorities of different regions and countries also varied widely. But in the end my heart won — not for the first time — and I accepted.

Our task was to elaborate a new region of social security for the ILO and its constituents. It was not an easy task. Such a vision should find its roots in the basic principles of the ILO, while responding to the new issues and challenges facing social security.

The Director-General of the ILO, Mr. Juan Somavia, encouraged us to be innovative, creative and unafraid of new ideas.

He challenged us to bring the social security agenda a significant step forward and took a keen interest in our work over the past two weeks.

How effective their conclusions will be, only time will tell. However, it is generally acknowledged by all three sides that the fruitful discussions allowed us to reach a consensus and an ambitious one at that. We have renewed the commitment of ILO member States, Employers and Workers to the promotion of social security worldwide. We have elaborated a set of principles to which all parties can subscribe. We have shown a way forward, it is up to each country to decide how best to proceed. Moreover, we set out an agenda for work for the ILO in the years to come, at least for the next decade.

Some of the key elements of this agenda are the extension of coverage of social security to those now excluded, the creating of governance and management of social protection schemes, and the achievement of sound financial, fiscal and economic bases for national social security systems.

The Office will have to pursue these and other objectives through research, policy and methodological developments and technical assistance — a paramount task. A task which makes it imperative to provide social security with more adequate resources and a higher profile within the overall context of the Organization’s activities.

The discussion has clearly demonstrated not only the social, but also the economic importance of social security. The conclusions state categorically that social security is not only necessary for the well-being of workers, their families and their community, but also enhances productivity and supports economic development. With globalization and structural adjustment policies, social security becomes more necessary than ever.

Many people feared that the Committee’s work would meet the same unfortunate fate as that reserved for the regional deliberations in Caracas in 1992, or the more recent debates in the Commission for Social Development in New York earlier this year.

Their fears proved to be unfounded. What made the difference here? We began our deliberations with an excellent background report which provided rich elements for our mutual understanding, and we were well assisted throughout our work by a carefully selected, well-trained and thoroughly professional secretariat staff. Members of the Committee were unfailing in their open-mindedness and their willingness to seek a new approach in line with the present realities and capable of meeting the aspirations of millions of people in all parts of the world.

However, the critical factor for our success was the Committee’s genuine search for a tripartite consensus. Coming from a country myself where tripartite dialogue is widely practised, I know very well how important this search for consensus is. After a rich and meaningful debate within the Committee, the exchanges within the Drafting Group had led to a most delicate balance. All sides wished strongly to maintain it; sometimes it was a bit like balancing on a tightrope, with Mr. Mansfield on the Workers’ side and Mr. de Regil on the Employers’ side. The rope was taut. Genuinely wishing to preserve this delicate equilibrium, neither group submitted any amendments. The Governments also supported this expression of the Committee’s eagerly awaited vision and offered few amendments. These mainly aimed to improve the existing text rather than make any substantive change.

Fearing that even this might jeopardize a carefully crafted result, the social partners accepted only a small number of proposals. They did not even spare the Chair, the proposals of my Government of Cyprus were rejected along with those of others, but we bear no grudges. We are delighted with the very successful outcome of our work.

There is another aspect of the tripartite approach which deserves mention. The tripartite debate is necessarily a wide debate; it takes into account not only financial or budgetary considerations but also encompasses the social dimension. This is of paramount importance as we move towards a decent global society, the ultimate goal of the ILO today.

Chairing the Committee on Social Security has been an honour and a privilege. For this rewarding experience I wish to thank all those Committee members who placed their faith in me at the outset. Particular thanks are due to the representative of the Secretary-General, Mr. Emmanuel Reynaud, whose wise counsel and discreet guidance supported the Committee’s work, and to his able team. The quality and precision of their work have been most appreciated by all three sides. I am also grateful to our Reporter, Mr. Michel Laroque, Government member of France, for his very accurate and objective report.

Now, coming to Mr. Mansfield and Mr. de Regil, I must say that each of them, in his own way and with his own distinctive personality, has defended his group’s positions with clarity, vigour and a splendid sense of humour. I thank them both and indeed I thank all members of the Committee from the bottom of my heart for their contributions and their support.

(Mr. Parrot takes the Chair.)

The PRESIDENT (Mr. PARROT) — The general discussion on the report of the Committee on Social Security is now open.

Mr. OYNA (Employers’ adviser and substitute delegate, Norway) — Social security is a vast topic, with a great variety of approaches and solutions owing to the demographic, economic, political and cultural differences between countries. It is also a very important topic affecting everyone of us.

This is why many of us came to the Conference with a fear of failure, but nevertheless with a hope that the conclusions from this session of Conference, through tripartite consensus, might contribute to move the world.

It might be that our fear of failure, combined with our humble attitude to this immense task, and at the same time a sincere wish to succeed, made it possible to achieve consensus on the very positive conclusions placed here for adoption.

This consensus, these conclusions, are a success. But the success is not worth anything unless we acknowledge that the real work starts now. The document reflects what we want to be done now, and in the years to come, and gives a clear mandate to the Office and the Governing Body on how to proceed. And we are confident that the Office will follow up the agreed conclusions in paragraphs 17-21, and also the pilot schemes mentioned in paragraph 16.

I would like to emphasize the importance of paragraph 17, and also 19: research is very important but it is only through implementation of the results that we really achieve success. If we cannot turn the results of research into practical solutions that benefit people, the research in itself is of little or no value.

Therefore we, the Employers, and the Workers and especially the Governments have a responsibility: a responsibility to seek possible and sustainable solutions; a responsibility to call upon technical assistance from the ILO, when needed; but first and foremost, and this is the responsibility of governments, to create an environment for economic growth and prosperity, thus creating new jobs.

The conclusions placed here for adoption are tools which, in the hands of the three parties, with help and guidance from the Office, can mean a difference to people.

The Norwegian Employers endorse the adoption of these tools.

Mr. DAS (Labour Minister, Government of Jharkland, India) — I am grateful to the President for giving me this opportunity to speak in this session of the Conference.

The final ILO report on social security is an excellent document which has brought out clearly the challenge being faced by different nations in extending the social security net and the choices before the policy-makers in the context of globalization and its impact on the labour force. This document will now form the basis of a strategy focusing on the various aspects of providing social security.

The ILO has defined its primary goal as the promotion of opportunities for all women and men to obtain decent and productive work in conditions of freedom, equity, security and human dignity. Social security is a key ingredient in the goal of decent work, and there is a need for linkage between employment and social protection policies.

The package of social benefits that a country can sustain depends upon the level of its economic growth. In the context of the developing countries, there is a need to focus attention on the workers of the unorganized sector. Human development is a prerequisite for the effective implementation of social security measures because it builds the capacity of individuals so that they are entitled to social security benefits.

In this context India has taken several initiatives, and alternative options are being explored for the expansion of existing social security schemes in the organized and unorganized sectors. The second National Commission on Labour has been constituted to suggest umbrella legislation for the workers in the unorganized sector. State governments in India have also taken the initiative to provide social security for the workers in the unorganized sector. In our country we are committed to protecting the interests of the workers and providing them with social security which we can afford after taking the views of all stakeholders into account.

I congratulate the ILO for coming out with this report on social security through the time-tested tripartite mechanisms and we agree with its main recommendations. India has been one of the pioneering countries in introducing the concept of social security. We have successfully put in place a social security net in the organized sector, but the real challenge lies ahead when we begin tackling the unorganized and informal sector.

Let me assure you from my country that we will strive very hard to achieve the goals which we have set ourselves. We realize and understand that providing social security to vast numbers of people in large countries will not be easy. However, we are determined to do our best in this direction.

Original Spanish: Mr. MURRO (Workers’ adviser, Uruguay) — As a Worker member of the Drafting Group, I greet the Conference. The document before us is a very good one, as is the resolution, given the circumstances affecting social security in various parts of the world.

We also recognize that there are some important documents that relate to ILO Conventions, resolutions and Recommendations. This resolution clearly represents a series of challenges for which we must share responsibility. It is not only the ILO or governments that have responsibility; so too do the workers and employers and their respective organizations.

It is no use just making demands; we must also participate effectively and professionally in producing the necessary changes in order to guarantee social security as a universal human right and a priority of the State and all of society.

There are some specific problems in the countries of our region. Evasion in all its forms in on the increase, and this increases individual risk, as mentioned in the resolution. The market risk is thus compounded by the risk arising from non-registration or failure to contribute. This gives rise to the situation currently seen in Latin America, where less than one-third of workers are covered by social security and the situation has not improved. This calls for substantial changes as regards the high administrative costs, which today represent an average of 25 per cent of workers’ income, also as regards transition costs. In countries where effective, serious studies have been carried out, it has been found that this can reach 200 or 300 per cent of the GDP in the long term. This is a fiscal cost that States must evaluate carefully before launching reforms.

Prior economic projections and follow-ups are essential, as are social dialogue and careful prioritization.

We must not support privileges or corporativism. It is essential to define very clearly in this resolution that, in the ILO’s investigative, technical cooperation and other activities, the priority is to extend social security coverage in all its forms.

Mr. TRUEBODY (Employers’ delegate, Namibia) — By some accounts, the subject of social security has been a matter for heated debate in the circles of the International Labour Organization in the past. By the time it came to be debated in the Committee on Social Security at this 89th Session of the International Labour Conference, tempers had cooled and the issues could be debated objectively and with decorum.

The report produced by the Office was a useful contribution to the knowledge base for the debate, even though it was received very late for thorough study prior to this session of the Conference.

The consolidation of the issues by the Office to cover six points for discussion, instead of the 12 originally proposed, was also useful in facilitating the assessment of priorities for further attention.

The initial debate in this tripartite Committee of the Conference was followed by some sound work by a Drafting Committee to produce a document that clearly meets most of the expectations of the social partners.

Consensus on the contents of the report under discussion, the accurate reflection of the views expressed in the document and the coverage of the issues addressed, was reached in record time and with very little argument.

In the report before the Conference, it is stressed that the social security net is important, not only because of the benefits it can offer to the disadvantaged, but also because of the contribution that investment in social security can make to increasing productivity and efficiency of productive systems and providing peace of mind for employees.

On behalf of the Namibian Employers’ Federation, I would like to suggest that the report before the Conference, together with the conclusions contained therein, be adopted. I do however wish to note that in order for the proposals to be implemented effectively, this will have to be done in the objective and transparent manner in which the discussions have been conducted in the tripartite committee at this Conference session.

In the report submitted for adoption, it is noted that considerable work in the way of research and analysis by experts needs to be carried out. This is necessary in order to test some of the speculations that form the basis of much opinion concerning the most effective means of providing social security to the target groups that are identified. The same applies to speculations regarding the impact of both inputs to, and outputs from, new social security schemes that might be devised to meet the perceived needs of disadvantaged communities.

The issues mentioned in paragraphs 17-19 of the conclusions of the tripartite Committee are crucial to the continued evolution of criteria for social security systems that are relevant to the problems of the country and target group for which they are intended. What is regarded as good practice in one community might not be good practice in another. The macroeconomic impact of a suitable system at one time might not be the same as the macroeconomic impact at another, to mention but two aspects of the matter.

Finally, it must be recognized that social dynamics have a relatively long response time, except in times of revolution. Consequently, the gestation period of any schemes that might be introduced would have to be acknowledged accordingly. This has direct implications for the design of any research projects and the reliability of the analysis of the results flowing from the research. It also implies that the research time-scales need to be pitched at levels that will ensure that the results obtained from that research may be reliably extrapolated into the future.

Mr. PANDENI (Workers’ adviser and substitute delegate, Namibia) — On behalf of the Workers’ delegation from Namibia, I congratulate the President on her election to preside over this session of the Conference.

I wish to address the Conference on one aspect of social security; the other issues, challenges and prospects on this topic have already been clearly mentioned by our Reporter.

This aspect is that the informal economy must become part of the formal economy. We are all aware that this issue needs urgent attention, especially in developing countries. In some developing countries the formal economy is on the verge of becoming an informal economy and, in my opinion, this is linked to globalization. Therefore, a change needs to take place; this is a matter of equity and social solidarity.

We are sure that the creation, enhancement and the extension of social security to the vast majority who are excluded will not only play an important role in creating social protection for these people, but will also create protection for their families and the community at large. This will also influence to an extent the integration of the informal economy into the formal economy.

I am aware that this will not be easy to achieve but if a concerted effort is made, this can be done. This will only be achieved when the inclusion of the vast majority in social security is realized, thereby making resources in the forms of access to credit, education, training, etc., available to these citizens. It will also advance movement of the informal economy towards the formal economy, and help create employment for those who need work.

We request that the social partners emphasize this integration when entering this stage of implementing this report.

We believe that this will lead to decent living wages, better conditions of employment, regulated business, and, indeed, the decent work we all desire.

In conclusion, allow me to extend my sincere thanks to our Chairperson of the tripartite Committee on Social Security, Ms. Samuel, and the two Vice-Chairpersons, from the Employers and the Workers, for their guidance and valuable contributions during the discussions in the Committee. Last, but not least, my thanks to all those who participated in the discussions on social security.

I recommend that this report be adopted.

Original Spanish: Mr. ESPAÑA SMITH (Employers’ delegate, Bolivia) — Before making a brief comment on the report of the Committee which I served, I would like to endorse what was said here by the Committee’s Employer Vice-Chairperson, Mr. Jorge de Regil. He referred to the quality of the work of the Committee, the efficiency of the Officers, the cooperative spirit of the members of the Committee, the support of the secretariat, which started with the excellent report on the issue submitted to the Conference and the recommendations prepared by the Committee, which are aimed at reactivating activities to extend social security coverage.

Social security is described as a fundamental human right. It is said that it should be integrated and egalitarian. It is a dynamic process which should be founded on certain basic principles. Also, social security should be accessible and aim at increasing employment, particularly of young people, women and senior citizens.

The Committee hopes that the general basic principles will be applied by all. The conclusions leave doors open as regards the structure, the coverage and the ways of administering social security in the various regions and countries, according to the needs of those countries, their capacities and, above all, their economic possibilities and levels of development.

Therefore, from a functional point of view, the Committee, most intelligently, has not opted for any specific approach, option, or model, and has not rejected any either.

Various Latin American countries have had serious difficulties and obstacles in the social security sphere. In some cases, this is due to structural defects and in many others to serious administrative shortcomings. To remedy this, various reforms have been tried, some within the traditional framework of state administration; some involving mixed schemes and some involving partially privately managed systems.

In the light of the report that we are considering, we can take an open approach to these and other options which are open to us to improve and modernize social security systems. These conclusions and recommendations will indeed be most useful when the range of activities and technical cooperation that the Committee suggests should be requested of our Organization are carried out.

To conclude, I would say that the main themes of the work of the Committee and of its conclusions were firstly realism and then flexibility.

The broad-ranging approach taken by the Committee, which did not get bogged down in amendments wars constitutes, as I said yesterday in the plenary, a perfect example of discussions in the forum of the ILO, conducted in a transparent manner, with mutual understanding and a true spirit of tripartism and social dialogue.

Original Arabic: Mr. ASFOUR (Employers’ delegate, Jordan) — In the name of God, the Compassionate, the Merciful! Nations change, peoples prosper and economies develop, thanks to stability and security, which are the very expression of the well-being of society.

Social security is one of the most important factors for stability in a society. Social systems differ from one country to another, and each country seeks progress and a better social system with the participation of the three social partners. We would stress the need to cover all members of society in the social security system if we wish to have a strong economy. All countries, moreover, must pool their efforts to support social security systems for the benefit of all our peoples.

We need to ensure gender equality, as both men and women should contribute to this effort, working for their own social security and stability.

With comprehensive social security we can eradicate child labour, which weighs heavily on so many countries and which the ILO is making every effort to combat. This can only happen if there is comprehensive social security economic stability, with job creation, a reduction in unemployment, the strengthening of social cohesion, a campaign against poverty, better health coverage, income security and social services.

Old age is one of the priorities that need to be studied in order to provide insurance for all the elderly. People who spend their working lives contributing to the economic growth and prosperity of their countries are entitled to expect a dignified retirement from social security.

We need to have a lasting economic system that all generations can rely on. This is why the ILO should take it upon itself to make nations aware of the need to extend social security coverage in the world. This is reflected in the report on social security and in the corresponding resolution, which encompasses many highly important factors and which is the basis of the social security system to which our peoples aspire. We support this resolution and we would like to express our thanks to the Chairperson of the Employers’ group and to the secretariat which, thanks to their efforts, have enabled us to achieve these results. I thank the Chairperson of the Committee on Social Security and two Vice-Chairpersons who, thanks to their competence, have enabled us to conclude our work successfully.

Original French: Mr. THIERRY (Government adviser, France) — First of all, I would like to congratulate the Office, the Chairperson, the Vice-Chairpersons and the experts from the three groups for the remarkable work carried out on a subject which is of particular interest to us all.

I would also like to express our warm and friendly thanks to the Reporter and emphasize, as many other speakers did before me, the high level of professionalism of the team of experts from the ILO.

This report and its conclusions are very important for the strategy of the International Labour Organization from many different points of view. I will only go into four points.

First of all, this work is the fruit of a balanced but ambitious consensus and offers the International Labour Office an axis of intervention which is essential for implementing decent work with regard to its social protection component. This is a stage which France believes must be the starting point for developing new ILO activities aimed at greater social security for mankind. This work could lead to an increased human and financial commitment from the ILO as regards technical cooperation on issues relating to social protection, and with an approach that naturally respects the diversity of socio-economic and cultural contexts. This work is an encouragement to all those who, in all countries, are working to implement and improve social security systems. It legitimates their activities and gives meaning to their action.

Second, I would like to come back to a point which has not been taken into account in the conclusions, but appears to be an interesting one. Social security ensures a redistribution of income to the benefit of those who are faced with social risks or substantial personal hazards. It mainly consists of social transfers which redistribute the income of workers to those affected by these risks and hazards. For enterprises and at a macroeconomic level, financing these social transfers is part of the labour costs corresponding to indirect or deferred salaries. It is not, however, at the macroeconomic level, a burden for the nation, nor does it reduce international competitiveness.

Indeed, as soon as the system is well designed and properly managed, it aims above all, to redistribute incomes to ensure that there is solidarity amongst us when encountering daily risks. From this point of view, it is an essential component of a model for social development.

Social income transfers, offering the individual a guarantee against major risks, are an important instrument for the struggle against exclusion, the prevention of precarious situations and a better integration of vulnerable groups. However, this compensatory role or softening of hazards for individuals and social security systems can also come into play collectively for the whole of an economy. We have, for example, noticed that countries which were less affected by recent economic crises or which were able to restart their growth quickly, were countries which had well structured social security systems.

Third, I briefly wanted to mention the positive impact that the development of social protection has had on employment. In all countries which have a well structured social security system, a substantial economic sector has developed employing sometimes more than 10 per cent of the active population. In many of our cities, for example, health care structures are the biggest employers. During the forum on employment, I believe we should consider this sector of the future, where considerable technical progress is being developed, which will better enable us to make the right to health care a reality.

The fourth and final point that I wish to dwell on is the role that the ILO must play as far as social security at the international level is concerned. It is absolutely essential that, apart from the financial point of view developed by the international financial institutions, we should also be able to make our social voice heard. It is up to the ILO, in conformity with the ILO Declaration of Philadelphia of 1944, to promote social security.

One has to note that the social security economy is not always something that national and international financial experts are well acquainted with. We have to make sure that society’s right to social security is taken into account, as laid down in Article 22 of the Universal Declaration of Human Rights (1948), and the International Covenant on Economic, Social and Cultural Rights (1966), and that it is not forgotten that sustainable and equitable human development is the main purpose of the economic and financial system.

The ILO must play its full role as far as social security is concerned on the international stage. We give our full support to the report and to the last paragraph, which advocates that the ILO “should invite the IMF and the World Bank to support the conclusions adopted by the Conference and to join with the ILO in promoting social justice and social solidarity through the extension of comprehensive social security”.

As we have recently been speaking of the social dimension of globalization and new initiatives being taken in this area, I think it also opportune to say that the development of social security systems is a very important part of these new initiatives in order to ensure a more human face to the management of globalization.

Ms. BUVERUD PEDERSEN (Workers’ delegate, Norway) — By putting social security on the agenda for the International Labour Conference, we have been able to discuss one of the major challenges of today. In order to implement the conclusions drawn in this report of the Committee on Social Security, there is much work ahead of us.

It is proposed in the conclusions of the report that a major campaign should be launched in order to promote the extension of coverage of social security. Such a campaign is important, bearing in mind that social security is not available to the majority of peoples throughout the world. For that reason, there is a great need for the ILO to make a serious effort to implement the work programme. In my opinion, three points should be highlighted.

Firstly, the ILO should offer technical assistance when and as needed in order to establish transparent and sound social security schemes so that corruption can be eradicated and administrative costs can be kept as low as possible. This is in the interests of the contributors and of those who should benefit from the schemes.

Secondly, the ILO should support initiatives that result in a better social security outcome for people belonging to the excluded majority. In cases where the excluded majority are forgotten, the ILO must take initiatives for them to be included.

Thirdly, the ILO must convince the IMF and the World Bank to support the conclusions and implement them in their own programmes.

This last point can be expressed less diplomatically. If I should do so, I would have said that the ILO must do its utmost to make the IMF and the World Bank understand the need for changes in their policies, not only in theory but also in practice. They can do so by, for example, supporting the conclusions of this report and work towards implementing them through their own programmes.

The ILO’s work for the implementation of these conclusions should start forthwith, in other words, sooner rather than later.

The PRESIDENT — We shall now proceed to the adoption of the report itself, i.e. the summary of the discussions in paragraphs 1-145. If there are no objections, may I take it that the report is adopted?

(The report — paragraphs 1-145 — is adopted.)

We shall now proceed to the adoption of the resolution concerning social security. If there are no objections, I take it that the resolution is adopted.

(The resolution is adopted.)

We shall now move to the adoption of the conclusions concerning social security, paragraph by paragraph.

(Paragraphs 1-21 of the conclusions are adopted.)

We have now completed our examination of the report, the resolution and the conclusions, submitted by the Committee on Social Security.

I should like to thank the Officers, members of the Committee and also the staff of the secretariat for the excellent work that they have done.

Updated by HK. Approved by RH. Last update: 21 June 2001.