Robert Montgomery, IDB by EHYMl7



Labor Standards in Development Finance:
         Recent Breakthroughs
         April 18 and 19, 2006

        Robert H. Montgomery, Ph.D.
    Head, Environmental and Social Unit
         Private Sector Department
     Inter-American Development Bank
IDB Private Sector Department (PRI)
Environmental and Social Requirements

 Each Environmental Party must comply with all
  Environmental Requirements such that all project-
  related impacts and risks are adequately
  mitigated or controlled
 Environmental Party is defined in relation to the
  project and the site as the project borrower,
  sponsor, construction contractor, operator, or any
  company or person working for the project
PRI Requirements - (cont.)
 Environmental Requirements are all environmental,
  social, health and safety, and labor requirements
  required by:
    any applicable in-country law
    any in-country governmental approval
    the IDB environmental and social guidelines
    any requirements established in project
      environmental plans
    fundamental principles and rights at work.
PRI Requirements - Labor
 Applicable in-country labor legal requirements,
  including all International Labor Organization (ILO)
  conventions ratified by the host country
 Fundamental Principles and Rights at Work,
  articulated by the ILO 1998
 Where necessary, Project-specific labor rights
  conditions prescribed by the IDB/PRI based upon
Fundamental Principles and
Rights at Work
 Freedom of Association and Right to Organize and
  Bargain Collectively
 Abolition of Forced Labor
 Equality of Opportunity and Treatment (Non-
 Elimination of Child Labor
Other Labor Aspects Considered
 Conditions of Employment
    Wages
    Termination of Employment and Dismissal
    Personnel Management
 Conditions of Work
    Hours of Work
    Night Work
    Rest and Leave
 Social Security
    Medical Care and Sickness Benefits
    Maternity Benefit
Other Labor Aspects Considered
 Special Provisions by Category of Persons
    Children and Young People
    Women
    Indigenous and Tribal Peoples
    Migrant Workers
 Special Provisions by Sector of the Economy
    Road Transport
    Dock Work
 Temporary Work Force Accommodations
 Initial Notification of Project Borrower
    IDB/PRI Environmental and Social Aspects
    PRI Environmental and Social Unit Guideline:
     Managing Labor Issues in Infrastructure Projects
          Educate on labor aspects in infrastructure projects
          Selected ILO Convention articles applicable to PRI
           financed projects
          Requirements
          Table with requirements, questions and indicators
          Documents Needed
          Project Site Visit
          Best Practices
 IDB Due-Diligence
    Information and Document Review
    Site Visit
 Legal (loan/guarantee) Agreement
    Representation and Warranty
    Covenant
    Disbursement Certification
    “Best Efforts” for moving beyond compliance
    Remedies
 Supervision of Projects in Execution
    Project/Company Compliance Report
    Site Visit
 Training and educating PRI staff responsible for
  labor aspects
 Finding adequate labor consultants for projects in
  developing countries
 Due-diligence and supervision of large-work force
  projects (e.g., multiple thousand construction
 Moving from compliance of core and basic labor
  rights to good and best practice
 Definition of “labor” aspects, and in particular in
  relation to human resources and whom in project
  company is/are persons responsible
 Applicability and/or subjectivity needed for certain
  requirements (criteria) as applied to all cases in
  developing countries
 Application of labor requirements on a project-basis,
  including to sub-contractors, and relationship to
  company human resource policies and procedures

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