1. In the last two years, we have made much progress towards the objectives laid out in my first report to the Conference in 1999, "Decent Work". With your endorsement and support we have reorganized, focussed our efforts and made progress on key issues, changed the way we work and brought new perspectives which reflect the views of people and families. We have made a good start but much more needs to be done. We need to assess our common endeavours to translate decent work into realizable programmes and activities. This report is about the steps we must now take.

Why the Decent Work Agenda?

2. Decent work is a goal. It reflects a universal aspiration of women and men everywhere and connects with their hopes to obtain productive work in conditions of freedom, equity, security and human dignity. Despite transformations in the world of work, the essence of what people want from work remains constant across cultures and levels of development. Decent work is a personal goal for individuals and families and a development goal for countries.

3. Decent work provides an integrated policy framework. The integration of four strategic objectives into a single agenda offers a framework for policy-making based on a coherent approach to shared goals. People see their lives in an integrated way - meeting the integrated needs of people calls for an integrated approach to policies.

4. Decent work is a method of organizing programmes and activities. We have built the ILO's programme and reorganized the work of the Office around four strategic objectives - standards and fundamental principles and rights at work, employment, social protection and social dialogue, with gender equality and development as cross-cutting themes. This has made it possible to establish targets and indicators which allow the measurement of progress and provide the basis of accountability.

5. Decent work is a platform for external dialogue and partnership. The policy identity given by decent work provides a platform for engaging the world beyond the ILO. Achieving decent work cannot be accomplished by the ILO and its constituents alone.

The decent work deficit

6. People aspire to a future which delivers opportunities for decent work in a sustainable environment. It is about recognition and dignity, about security and voice, about gender equality and solidarity. But there is a global decent work deficit, reflecting the diverse inequalities of our societies, and this is a source of profound concern.

7. The decent work deficit is expressed in the employment gap, with large scale unemployment and underemployment; the rights gap, reflected in widespread denial of rights at work; the social protection gap, reflected in unsafe working conditions and income insecurity; and the social dialogue gap, which shows up in inadequate representation and institutions to permit voices to be heard. Unless we tackle the deficit, the goal of social justice will remain beyond our grasp.

8. The policy goal is reducing the deficit. Countries and international institutions zealously target the reduction of budget deficits. Now it's time to focus on reducing the decent work deficit.

9. Decent work is a valid policy goal at all levels of development. Each country can set its own goals to reduce the decent work deficit with due regard to its specific circumstances and possibilities, and its historical and cultural heritage. This endeavour should stand at the centre of a dynamic development strategy, the goals being set higher as a country moves forward.

Making decent work happen: Four challenges

Affordability

10. The principles and rights for which the ILO stands do not need to be justified on economic grounds, but economic and social efficiency can go together.

11. There is an economic dividend to decent work. Decent work can enhance productivity for firms. It can also promote more equitable and sustainable growth patterns. Stable labour markets encourage growth of demand and investment; moves towards gender equality have a positive effect on economic growth; social dialogue permits balance to be achieved between different goals, for example between flexibility for enterprises and security for workers.

12. Progress in decent work may require resources, but because of the economic dividend, decent work will often be more affordable than it appears at first sight.

Universality

13. All those who work have rights at work. Gender equality is an essential part of the decent work agenda. Reaching the informal economy is tough, but there are many examples of successful policies and projects that show it is possible.

14. There is a universal floor to decent work, but no ceiling. Fundamental principles and rights at work are the "floor" of decent work, along with work itself. Above the floor, what is seen as decent embodies universal rights and principles, while reflecting the circumstances in each country. The threshold of decent work advances with economic and social progress.

15. Decent work is relevant for the poor. Basic rights, employment, security, representation and dialogue are ends in themselves, but also a means of enhancing the capabilities of the poor to allow them to climb out of poverty.

Coherence

16. An integrated approach is essential because each of the elements of decent work - employment, rights, protection and dialogue - reinforces the others. And all play a part in achieving broad goals such as poverty eradication. Economic and social goals and policies must be considered together in an integrated approach; for instance, macroeconomic policy must take into account its social impact.

17. Because it is an integrated agenda, we cannot selectively pursue decent work objectives without undermining the concept. National circumstances mean that the weights placed on one or other aspect of the agenda may differ, but it is always necessary to take into account the interaction between different objectives.

Feasibility in the new global economy

18. New patterns of production and distribution in the global economy reduce the effectiveness of some existing national policies, but at the same time they have led to new institutional developments at the global level, which create a window of opportunity for the promotion of decent work. Many of these developments involve private actors but they need to be guided by State policy.

19. Key developments for the ILO's agenda include:

• The increasing influence of the ILO's Declaration on Fundamental Principles and Rights at Work.
• The launching of the UN Secretary-General's Global Compact.
• A growing role of social dialogue in promoting international agreements which guide labour practices and labour relations across borders.
• The growth of voluntary private initiatives and of socially responsible investment.

Globalization and social progress

20. The feasibility of decent work also depends on the path of globalization. There is a growing polarization of opinion about the pattern and direction of the global economy. At the same time there is a growing awareness that something needs to be done to bridge this divide. We also need to respond to the silent frustrations brewing in the hearts of many individuals and their families. New routes towards the governance of globalization must emerge.

21. The policies which are needed if globalization is to work for all are becoming clearer, and they point to the ILO's agenda - I have found widespread receptiveness to the idea that achieving greater opportunities of decent work for all is an appropriate goal for the global economy. We need to explore its potential for bridging the divide on globalization.

Trade and labour standards

22. While there is a heated debate on conditionality and linkages, there exists a consensus in four areas: the core labour standards which make up the fundamental principles and rights at work; the competence of the ILO in setting and administering these standards; the illegitimacy of using labour standards for protectionist trade purposes; and the understanding that fundamental principles and rights at work are an integral part of development itself.

23. We must continue to pursue the goal of placing a social floor under the global economy in ways which are acceptable to both developing and developed countries based on the ILO approach of advocacy, voice and partnership. The ILO must be empowered to pursue this task.

The debate on globalization is also about employment, security and dialogue

24. More countries and more individuals need to benefit from the opportunities for employment and income generation in the global economy. Both national and international policies are needed to leverage the positive effects of integration. Employment goals have to be given high political priority.

25. Decent work is a package - bringing the goals of employment and standards together and linking them to other decent work issues of security, social dialogue and gender equality is the key to moving beyond current unresolved debates. This package, combining values and economic and social goals, is the ILO's distinctive contribution to social progress in the global economy.

26. The Governing Body Working Party on the Social Dimension of Globalization provides a valuable institutional framework to embed values in the global economy.

An evolving agenda for the ILO and its constituents

New orientations for ILO action

27. We must move forward through new intersectoral initiatives in two broad priority areas: developing the capacity for national and local policy; and action to embed our values in the global economy.

28. Normative action is an indispensable tool to make decent work a reality. It is helpful to group standards in families around the four strategic objectives of decent work. Positive linkages between these families of standards can encourage member States to make simultaneous progress on each dimension of decent work.

29. While respecting the principle of voluntarism, we can envisage new activities to eliminate practices most contrary to the spirit of the Declaration, for instance in some export processing zones, new roles for the ILO as an "honest broker", and stronger action in relation to Convention No. 182 on the Worst Forms of Child Labour, such as a major worldwide effort to support governments that commit themselves to time-bound programmes.

30. We need to be able to respond to new voluntary private initiatives without compromising our autonomy and independence. We should aim to extend knowledge about such initiatives, and could promote social dialogue to breathe the goals, policy objectives and methods of decent work into them.

31. Decent work must be part of development strategy. Within the decent work framework, achieving higher levels of employment is critical in many countries. A Global Agenda for Employment is under development and will be discussed at the Global Employment Forum in November. Our recently launched decent work pilot programmes are important initiatives in the development of integrated approaches to policies for decent work at the national level.

32. I plan to put the people and families who depend on the informal economy high on the ILO's priority list. This is also where there are the greatest problems of social protection, representation and rights, and gender inequality is pervasive. New actors and new institutions such as micro-finance institutions and other social entrepreneurship initiatives have an important role to play.

33. We must also invest in our information systems in order to effectively support diagnosis, evaluation and policy design.

Challenges for governments, workers' and employers' organizations

34. The Organization must offer strategic support and services to governments, and to workers' and employers' organizations, in the major challenges they are facing.

35. Public policy and an effective and responsive State remain fundamental if social and economic progress are to be achieved together in the global economy.

36. Workers' and employers' organizations are having to respond, in different ways, to changes in the structure of production and employment, and to the challenge of the informal economy. New forms of organization and new services are developing to cater to these needs.

37. Both workers' and employers' organizations are concerned with the ways fundamental rights and principles are promoted in the global economy, and with linking the quality of products with the quality of the working environment. More effective organization and stronger capabilities for analysis and dialogue are essential to reinforce the contribution of both partners to the Decent Work Agenda.

Outreach and alliances

38. The biggest strategic error this Organization could commit is to believe that tripartite dialogue is sufficient on its own to understand what is going on in today's societies.

39. The ILO must connect with the wider world through learning, leadership and leverage. Where it finds common ground with other actors, it must be ready to act as a team player and a partner, for this will increase our chances of having an impact that matches the scale of our ambitions. This calls for creativity, new ways of working and new forms of outreach. Actors beyond the ILO offer a rich source of ideas, innovation and action. Outreach is no threat to the ILO's tripartite constituency. On the contrary, it is a source of strength.

40. The multilateral system must develop new, better and more coherent international frameworks. It is still underperforming in this respect. It means not just working together but taking on board each others' goals. We will not always be in agreement. But we must avoid "multilateral schizophrenia", which leads to conflicting policy advice to the same governments from different agencies.

41. Ultimately, our capacity to promote change depends on legitimacy, and that comes from the strength of our values, connection with reality, a capacity to listen and respond to the voices of people, the relevance of the goals of the Decent Work Agenda.

42. We must stand firm by the Decent Work Agenda established two years ago. All those who backed it were embarking on a major political commitment to a common purpose. We must steer a steady course, guided by cohesive tripartism as a basis for common action.