Ministry of Labour and Social Welfare Department of Labour Management International Labour Organization Improving the Garment Sector in Lao PDR - Compliance through Inspection and Dialogue

Contents of Presentation: Overview of Project Objectives Key Achievements Challenges and Ways to Address them

Development Objective Project objectives To improve compliance and working conditions and increase competitiveness of the Lao garment industry Improved inspection capacity Increased labour law knowledge among workers and employers Improved labour compliance and productivity at factory level Development Objective Immediate Objective 1 Immediate Objective 2 Immediate Objective 3

Key Achievements in 2015 Immediate Objective 1 Legal Gap Analysis conducted (ILO Con 81 and 129) – Recommendations used to inform the contents of the Ministerial Decision 5523 on strengthening the Labour Inspection System Training held on labour inspection methods and techniques for labour inspectors (training a continuing process to develop master trainer capacity among inspectors) A Manual on Labour Inspection developed for labour inspectors in Laos

Immediate Objective 1, cont. Key Achievements in 2015 Immediate Objective 1, cont. Training held for labour inspectors on Lao PDR Labour Law Printed a Labour Law handbook for distribution to all labour inspection offices around the country

Key Achievements in 2015 Immediate Objective 2 Labour Law Guidance Notes and Training Curricula developed; focus on: Minimum Wage Occupational Safety and Health (OSH) Fundamental Principles and Rights at Work Working Hours Social Security Employment contracts

Key Achievements in 2015 Immediate Objective 3 Training held for labour inspectors and factories that participate in the project on: Problem solving techniques and root cause analysis: Inspectors were trained in the application of tools and methods to facilitate Workplace Improvement Committees (WICs) effectively (e.g. Fishbone Diagram, risk assessment matrix)

Focus: Factory Interventions

Factory Interventions cont. Workplace Improvement Committee meetings are now conducted regularly by inspector teams. Labour inspectors used Bow Tie Analysis to help Committee identify root causes of their problems

Factory Interventions cont. Workplace Improvement Committees (WICs): So far 8 WICs established in 8 out of 11 factories participating in the project, with the support of core 9 Inspectors from 7 Districts and Vientiane Capital; Equal representation of management and workers in the WIC, e.g: if a WIC has 10 members, 5 would be from management and 5 would represent workers. Always 2 inspectors facilitate a WIC meeting, one being the lead facilitator and the second inspector assisting. Workplace Improvement Plan (WIPs): 7 WIPs so far developed. Number of factory visits conducted so far: 33

Factory Interventions cont. Common workplace issues found in factories: High staff turnover Absenteeism Unskilled workers Working conditions: dirty toilets, poor drinking water… Internal organization and housekeeping issues affecting productivity Factory interventions will continue until the end of the project in Feb 2017 – with the aim to include at least 10 more factories

Factory Interventions cont. Community Based Enterprises Development (CBED) Workshop 8-9 February 2016: 4 participating factories, MoLSW staff, LFTU, LNCCI, GSDC and NIU were invited to a CBED workshop. 11-12 February 2016: 3 factories were visited by the CBED expert and inspectors to receive training on the best use of CBED tools with the aim to build their capacity to conduct productivity-improving measures.

Key Activities from Jan-March 2016 4 March 2016: Consultation meeting held on the Ministerial Decision 5523 on strengthening the labour inspection system Outcome: The Decision is being supported by the employer associations and LFTU; next step: hold provincial consultations

Minimum Wage Campaign The campaign provided information and advice on the new minimum wage and increased awareness on the role of the Labour Inspectorate to identify and resolve any minimum wage compliance issues Inspectors distributed brochures and met with manager representatives and at least five workers in their factories to conduct a survey Information gathered from the factory visits (through interviews and questionnaires) will be analysed and presented in a national report on the status of minimum wage implementation to inform policy makers Understanding and Applying the Minimum Wage in Lao People’s Democratic Republic

Planned Activities from April – September 2016 Focus on factory interventions, incl. roll out of WIC approach, WIP implementation, skills development in factories Guidance note training on labour law to workers and employers Internal Mid-Term Evaluation of the project (4-7 April) National consultation on revised Decision 5523 for adoption and towards C81 ratification (May) Development of a national labour inspection plan (starting from May)

Planned Activities from April – September 2016 Mid-term stakeholder workshop to share good practices and lessons learned from WIC/WIP work in participating factories (tentatively late June) Deliver training to all labour inspectors from all provinces (tentatively September / Oct)

Some Challenges and Ways to Address them Insufficient commitment by some factory managers to invest in improvements and release workers from their duties to participate in WIC meetings Mitigation strategy: schedule meetings with factory managers to re-explain to them the benefits of social dialogue in the workplace, identify good practice factories where the factory manager is willing to share his/her good experiences with social dialogue processes with other factories, have joint factory visits together with ALGI representatives

Some Challenges and Ways to Address them: Increasing work load of inspectors in the core group when the number of factories under the project is increasing; this may affect the number of WIC meetings being held and the quality of their facilitation Mitigation strategy: assist the inspector core group in scheduling factory visits, have only one inspector facilitating a meeting instead of two, continue inspector training on facilitation skills

Lessons learned In order to increase the buy-in of factory managers to support factory improvement measures more awareness raising and training is needed in order to help them fully understand the benefits of workplace social dialogue and investment into labour compliance Our cooperation with especially the employer associations need to be strengthened to engage them in the promotion of the project towards their members The Labour Inspector core group needs more coaching on the application of facilitation and other tools during WIC meetings

Thank You Ministry of Labour and Social Welfare Department of Labour Management International Labour Organization Thank You