1. Promoting Labor Standards DEGs Labor Policy Dr. Peter Thimme, Head Environment / Sustainable Development, DEG Washington, 18-19 April 2005

2. 2 DEGs Labor Policies. Milestones. Revision of DEGs E&S Management System 2001 2005 Occupational Health and Safety ILO Core Labor Standards ILO Basic Terms & Conditions of Employment Social Management Systems Optimize/broaden assessment and monitoring Guideline on social compatibility Approved by DEGs supervisory board

3. 3 DEGs Social Procedures. Overview. Clearance in Principle Due Diligence Contract Monitoring E&S Team Risk Mapping Categorization Medium risk: evaluation of E&S information questionnaire Higher risk: verification thru site visit High risk: full social audit Annual Monitoring Report Monitoring of ESAP Site visits and audit depending on the project risk Risk specific modular requirements Environmental and Social Action Plan (ESAP)

4. 4 DEGs Social Procedures. Risk Mapping. RISK GROUPS risk of child labor, younger employees, women, low-wage-groups, migrant and temporary workers; workers hired by sub-contractors, workers in the supply chain RISK BRANCHES extractive industries, agribusiness, infrastructure (power stations, streets), greenfield projects including comprehensive infrastructure measures, construction industries or projects with construction phase Staff (low-wage-group)-intensive industries (like textile, consumer products, supermarkets) RISK COUNTRIES Countries with inadequate labor laws and regulations; countries known for breaks of laws and regulations; free-trade zones MANAGEMENT RISK inadequate human resource policy or social management systems

5. 5 DEGs Social Procedures. Contractual Requirements. National laws and regulations Higher RiskMedium risk Small risk High risk ILO Core Labor Standards and Basic Terms and Conditions of Employment World Bank/IFC Guidelines and Safeguard Policies/ Performance Standards International Good Practice Social Management System (e.g. in accordance with SA 8000) Social Action Plan

6. 6 Promoting Labor Standards. Challenges. Within our institutions Continuous Improvement: stringent approach to labor issues in projects Broaden mind set of project managers: understanding labor issues as vital for achieving our development goals Clients Ownership: persuade clients to endorse fair, safe and healthy working conditions as business necessity and advantage Management: full integration of social management into the overall management of the company

7. 7 Promoting Labor Standards. Contacts. Thank you for your attention! For further discussions please contact: Dr. Peter M. Thimme Environment/ Sustainable Development Belvederestrasse 40, 50674 Cologne thi@deginvest.de +49-221-4986-1503 www.deginvest.de