Improving the Garment Sector in Lao PDR: Compliance through Inspection and Dialogue Project Reporting period: January - July 2015

Presentation Outline Overview of Project Objectives Progress and Key Achievements Challenges Solutions and Next Steps

Overview of Project Objectives Objective 1 – The capacity of the labour inspection system in Lao PDR is improved so that it can effectively undertake labour inspection functions for the benefit of workers and employers in the garment sector 1.1 Needs analysis 1.2 Labour Inspection Policy – 5523 1.3 Legal framework and compliance with International Labour Standards 1.4 Labour Inspection Plan 1.5 Labour inspection tools and manual 1.6 Data collection 1.7 Labour inspection pilot program 1.8 Ratification of ILO Convention 81

Overview of Project Objectives Objective 2 – Workers and employers are aware of their labour rights and obligations and understand how to achieve compliance 2.1 Agreement on the training strategy 2.2 Labour law guidelines 2.3 Awareness raising and outreach tools 2.4 Training curricula for workers and employers 2.5 Training delivered to workers and employers Objective 3 – Factories improve working conditions and productivity through workplace cooperation using the project advisory and training services 3.1 Workplace Improvement committee created 3.2 Initial assessment undertaken on how to achieve compliance 3.3 Workplace Improvement Plan agreed and implemented 3.4 Reporting and measurement of progress is made

Progress and Key Achievements Objective 1 – The capacity of the labour inspection system in Lao PDR is improved so that it can effectively undertake labour inspection functions for the benefit of workers and employers in the garment sector 1.1 Needs Assessement: The project completed a Needs Assessment on labour inspection system in Lao PDR, some key findings include: Need to increase operational budget for more and effective inspections MoLSW needs to strengthen its central authority role in practice for more consistent labour administration across the country, improved planning and coordination, and information collection Ministerial Agreement 5523 on Labour Inspection should be revised to bring it into conformity with international labour standards and practice and to ensure its legal standing Labour inspectors require basic training on labour law and inspection skills Too few inspections are carried out per inspector

Progress and Key Achievements Objective 1 – The capacity of the labour inspection system in Lao PDR is improved so that it can effectively undertake labour inspection functions for the benefit of workers and employers in the garment sector 1.2 Labour Inspection Policy: National workshop held in May to review LI policy Ministerial Agreement No. 5523 on labour inspection functions as sole policy reference on LI Work ongoing with international experts on revising this regulation Adoption of revised Agreement No. 5523 envisaged to ensure consistency with new Lao Labour Law 2014 and international labour standards and practice.

Progress and Key Achievements Objective 1 – The capacity of the labour inspection system in Lao PDR is improved so that it can effectively undertake labour inspection functions for the benefit of workers and employers in the garment sector 1.3 Legal framework is in compliance with ILO principles: Legal gap analysis (Convention 81 and 129 on labour inspection) has been undertaken to identify areas and needs for development to ensure that Lao legal framework is consistent with ILO principles Consultation with stakeholders on preliminary findings and recommendations was concluded in July. Final gap analysis report together with recommendations and roadmap for the Laos to moving forward the ratification of ILO Convention 81 will be validated at the national workshop in September.

Progress and Key Achievements Objective 1 – The capacity of the labour inspection system in Lao PDR is improved so that it can effectively undertake labour inspection functions for the benefit of workers and employers in the garment sector 1.4 Labour Inspection Plan: Consultation workshop was held in May to discuss on the national labour inspection plan and it is pending for further discussion 1.5 Labour inspection tools and manual: Completed review of current checklists and regulatory guidelines used for labour inspection 1.6 Data collection: - Completed review of data collection methodologies in use.

Progress and Key Achievements Objective 1 – The capacity of the labour inspection system in Lao PDR is improved so that it can effectively undertake labour inspection functions for the benefit of workers and employers in the garment sector 1.7 Labour inspection pilot program: The Project Advisory Committee (PAC) approved planning on undertaking campaign on minimum wage. This campaign to be commenced in late August throughout the year 2015 by the identified 9 LIs 1.8 End of the project the country ratifies C81: Legal gap analysis has been undertaken. Consultation with stakeholders on preliminary findings and recommendations was concluded. Basing on the recommendations legal gap report, the roadmap for the Laos to moving forward the ratification of ILO Convention 81 to be developed in the end of 2015.

Progress and Key Achievements Objective 2 – Workers and employers are aware of their labour rights and obligations and understand how to achieve compliance 2.1 Agreement on the training strategy: The training program and it outlines endorsed by the PAC. The project is engaging a consultant to develop training curricula and M&E methodology. 2.2 Labour law guidelines: Based on the advice from PAC, the project has been prioritised on raising understanding of the minimum wage to ensure its enforcement. The project is planning to develop further guidance materials on key priority areas identified within the Lao Labour Law, 2014.

Progress and Key Achievements Objective 2 – Workers and employers are aware of their labour rights and obligations and understand how to achieve compliance 2.3 Awareness raising and outreach tools: 2.4 Training curricula for workers and employers: 2.5 Training delivered to workers and employers: The PAC endorsed training program and its outlines. Together with consultant the project is developing a training curricula and M&E methodology.

Progress and Key Achievements Objective 3 – Factories improve working conditions and productivity through workplace cooperation using the project advisory and training services 3.1 Workplace Improvement committee created: 3.2 Initial assessment undertaken on how to achieve compliance: 3.3 Workplace Improvement Plan agreed and implemented: 3.4 Reporting and measurement of progress is made: After a seminar meeting with the Association of the Lao Garment Industry and employers to discuss the project and invite participation in April, today the project received confirmations from 5 factories on their voluntary participations. The visits of the project to 11 factories in June to promote the work of the project and extol the benefits of participating in its work could convince 1 more factory to join the project. The majority of activities under this output are not due to commence until the second half of 2015.

Challenges Labour inspector knowledge of legislation and compliance measures are limited Inspectors have limited inspection skills Ministerial Agreement No. 5523 on labour inspection needs strengthening in line with ILS and has uncertain legal standing No data collecting system in place for LI

Challenges Strategic LI planning needs strengthening Workers and employers view LIs as police not advisors Building trust between workers and employers to create social dialogue in factories

Challenges Garment sector and workers have limited understanding of the labour law Persuading factories about the benefits of participating in the project

Solutions Build up labour inspector knowledge & skills Enhance advisory role of labour inspectors Develop a system for data collection and reporting at central and local levels Strengthen legal basis for labour inspection including through the ratification of ILO Convention 81

Solutions Strengthen strategic planning and performance management at central and local levels Raise awareness among workers and employers on labour laws and regulations Increase advocacy among factories on the productivity benefits of the project

Next Steps Complete training materials for LIs and roll out training for inspectors across the country (Aug/Sep) Produce practical tools for workers and employers on the minimum wage (Aug) Hold a national workshop on minimum wage compliance (Sep) Carry out a minimum wage compliance campaign in garment factories (Oct)

Next Steps Validation workshop on gap analysis and develop a road map towards ratification of ILO Convention 81 (Sep) Complete revision of Ministerial Agreement No. 5523 (Oct/Nov) Prepare and disseminate labour law guides for LIs, employees and employers

Next Steps Continue project advocacy in garment sector to sign up volunteer factories towards the launching of the project’s third phase (Aug-Dec) Baseline survey on labour law compliance in garment sector to allow for eventual impact assessment.

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