The International Labor Organization and International Labor Issues in the 105th Congress

CRS Report for Congress
The International Labor Organization and
International Labor Issues in the 105 Congress
Lois McHugh
Analyst in International Relations
Foreign Affairs and National Defense Division
The International Labor Organization (ILO) is a specialized technical agency of the
United Nations system. It has an assessed budget, which means that each nation’s
contribution is set as a percent of the total ILO budget. In the ILO, government
representatives are joined by delegates representing a country’s worker and employer
organizations, who always, theoretically, speak and vote independently of their
The ILO addresses workers’ rights, such as child labor and working conditions.
It does this through the negotiation, adoption, and implementation of labor standards as
treaties which are binding on the governments that ratify them. The ILO has begun to
address the issue of labor standards in trade and to refocus member attention on the core
human rights labor standards. A declaration adopted in June 1998 confirms the
obligation of all members to respect and apply the principles of seven core labor
standards conventions and the ILO will begin an annual examination of how all nations
comply with them. The ILO is currently debating a convention to eliminate the worst
forms of child labor. These are slavery or bonded labor, work by very young children,
and work under hazardous conditions or in hazardous occupations. The ILO has a highly
regarded technical assistance program to help countries eliminate child labor. The United
States is a major contributor to this voluntary program.
Congress is concerned about the size of the ILO budget and the U.S. assessment.
The United States owes the ILO dues for previous years (arrears) and the ILO will need
to comply with congressional reform benchmarks in order to be paid. The ILO is also
part of the debate on the use of labor standards as a measure of fairness in trade
agreements. These issues are the subject of legislation during the 105 Congress. Thisth
report provides a brief overview of the issues and the legislation introduced to address
them. CRS has produced many related products which are referred to in the text. Basic
information on the ILO can be found in CRS Report 95-766, ILO: A Fact Sheet.

Congressional Research Service ˜ The Library of Congress

Child Labor Issues
During the 105th Congress, many bills have been introduced addressing child labor
provisions, including: developing an international system of labeling to certify products in
which no child labor is used; prohibiting the import of products produced by children; and
prohibiting U.S. foreign assistance to countries which use child labor. Two provisions have
become law: P.L. 105-61 includes language restricting the importation of goods produced
by forced or indentured child laborers and P.L. 105-121 adds child labor to the list of
criteria for denying credit by the Export Import Bank. For FY1999, the Administration
requested $30 million for IPEC, an ILO technical assistance program to curb child labor
and P.L. 105-277, the Omnibus Appropriation Act appropriated this amount. (For more
specific information on child labor issues during this Congress, see CRS Issue Brief 97052,
Child Labor and Public Policy in a Global Setting.) The Department of Labor published
its fourth annual report examining various aspects of child labor in U.S. trading partners.
Child Labor Convention. The ILO has been concerned with child labor since its
founding. A recent ILO study estimates that at least 250 million children are working
either full or part time. ILO Convention number 138 sets a minimum age for labor at 12
to 18, depending on how developed the country is and what type of work is involved. It
has been ratified by 64 countries though enforcement of minimum age laws remains a
problem in many of these countries. The United States and most ILO members want to
develop a new convention to focus attention on reducing the worst forms of child labor
such as bonded or slave labor, certain hazardous conditions or occupations, and work by
very young children. Some ILO members are concerned that the proposed new
convention will be too narrow. Others are concerned that some of the conditions which
the proposed convention wants to control, such as prostitution, are crimes which are
police matters rather than labor problems. The June 1998 ILO Conference discussed a new
child labor convention which addresses the worst forms of child labor. Convention 138
would remain the basis for protecting underage workers. The language and contents of
the new Convention are being debated at ILO meetings now. It is expected to be ready
for adoption at the ILO Conference in June 1999. A number of differences in language and
content remain to be resolved.
International Program for the Elimination of Child Labor (IPEC). The ILO
began a technical assistance program to curb child labor in 1992 which is now operating
in 30 countries and has small programs in many more. There are 23 additional countries
awaiting funding to begin IPEC programs. IPEC programs focus on bonded child
laborers, children in hazardous working conditions and occupations, very young working
children and working girls. They address the causes of child labor within each country,
support local efforts to prevent child labor, provide alternative income, and build a
permanent capacity within the country to address child labor. The programs include
efforts by ILO, UNICEF, local government agencies and nongovernmental organizations,
and the national government in an effort to change the situations within poor countries
which lead to child labor. IPEC is considered very successful by many governments and
is supported by many members of Congress because the programs are cooperative and
inclusive and address specific child labor situations in each country. The U.S. Council for
International Business (the U.S. business representative to the ILO) calls IPEC programs
well conceived and comprehensive. IPEC is currently funded by voluntary contributions
from 16 donors, including the United States. IPEC documents indicate that the 1996-1997
biennium budget was $18.4 million and the anticipated 1998-1999 budget will be $17.7

million. Congress provides contributions to IPEC in the Labor/Health and Human Services
Appropriations Acts. U.S. contributions since 1992 total $8.1 million. P.L. 105-277
appropriated $30 million, as requested by the President, compared to $3 million in
ILO Labor Standards And Trade
Since the creation of the World Trade Organization (WTO) in 1994, the debate over
the role of this new agency in relating labor standards to international trade practices has
been heated and continuous. The United States proposed (and P.L. 103-465, the Uruguay
Round Agreements Act, endorsed) that a working party be established in the WTO to
examine the relationship between workers’ rights and international trade issues. In
December 1996, WTO members voted that the ILO, rather than the WTO, should be the
forum where the social dimensions of liberalized world trade are debated. In their
Declaration, WTO members pledged a “commitment to observe internationally recognized
core labor standards”. In June 1998, the ILO members adopted a Declaration declaring
that all ILO members have an obligation to respect and promote core labor rights which
are the subject of 7 ILO Conventions, whether or not they have ratified the conventions.
While the Administration continues to press the WTO to address the trade/labor standards
issue, it supports the ILO Declaration and the development of an ILO procedure for the
examination of compliance with the “core” labor standards.
Countries Ratifying the Core ConventionsAnticipating the increasing ILO
role in the trade/labor standards area,
No. 87 Freedom of122ILO member governments began to
Association/ Right tofocus on labor standards and explore
Organizenew means of ensuring compliance with
No. 98 Right to Organize/139them several years ago. Member
Collective Bargaininggovernments have debated and agreed
that there are seven ILO labor
No. 29 Forced Labor147conventions which are fundamental to
workers’ rights. These “core” human
No. 105 Abolition of133rights conventions deal with freedom of
Forced Laborassociation, right to organize and
No. 100 Equal137bargain collectively, equal pay andbenefits for men and women for work of
Remunerationequal value, nondiscrimination in
No. 111 Nondiscrimina-130employment on the grounds of race, sex,
tion in Employmentreligion, political opinion, or national
origin, freedom from forced labor, and
No. 138 Minimum age64minimum age for employment. The ILO
members also agreed that the ILO
should focus on encouraging wider
ratification of these core conventions among ILO members and to emphasize them in the
ILO technical assistance programs.
U.S. trade legislation since the 1970s has often required trading partners to comply
with “internationally recognized workers’ rights,” with a waiver where U.S. national
interests require. More recently, such compliance has been suggested for bilateral and
multilateral foreign aid eligibility as well. These “rights”, as described in legislation and

practice, include compliance with the principles contained in the “core” ILO labor
conventions. Congress continues to be interested in including labor standards in trade
agreements. Failure of the Administration’s fast track trade legislation during 1997 has
been blamed in part on inadequate labor standards provisions. (For background
information on this issue, see CRS Report 97-272, Worker Rights and U.S. Trade Policy:
WTO Singapore Ministerial and Fast-Track Extension and CRS Report 94-535, Trade
Agreements and the International Labor Standards of the ILO.)
At the June 1998 ILO Conference, the members adopted a Declaration on
Fundamental Principles and Rights at Work. This declaration states that all ILO members
agree to adhere to the principles of the seven core conventions, regardless of their state of
development or whether they have formally ratified the conventions. Although the United
States had hoped for agreement by all members by consensus, the vote was 273 to 0.
Thirty countries, 8 labor delegates, and 5 employer delegates abstained from voting. (The
U.S. employer and worker delegates supported the declaration). The ILO members also
agreed to establish procedures for annual reports on the seven core conventions by all
countries which have not ratified them. Comments on these reports by labor and employer
groups will be included. (Countries which have ratified the conventions report to the ILO
at time intervals established by the various conventions). The annual reports will be used
to oversee how well countries are complying with the principles, but there is still
widespread disagreement over how the reports will be reviewed and used by the ILO.
In his June 1997 report to the members, the ILO Director General also proposed the
development of a “social label” for goods which are produced by countries found to be in
compliance with core standards by independent international inspectors . This proposal
was very controversial among members, with industrialized countries supporting and
developing countries opposing such a social label. Social labeling is increasingly being
encouraged by consumer groups and by some governments.
U.S. Contribution Shortfalls
In FY1998 the United States contributed
U.S. Contributions to the ILOthe full amount owed to ILO for calendar 1997.
(in millions of dollars)The FY1999 appropriation covered nearly the
FY1991$62.0entire assessed amount. Appropriations short-falls during the last 10 years have left the
FY1992 54.6United States about $29 million in arrears to the
FY199357.3ILO, but the amount fluctuates as the exchange
rate changes from day to day.
FY199562.2The ILO Constitution requires that all
members pay an agreed portion of the budget.
FY199664.5 The U.S. share is currently set at 25%. Congress
FY199754.0funds the U.S. contribution to the ILO through
FY199860.4the Department of State Appropriations, in theContributions to International Organizations
FY1999 (req)59.8(CIO) Account, part of title IV of the annual
Source: Department of StateCommerce, Justice, State Appropriation bill. The
CIO account funds many U.N. agencies and non-

U.N. agencies, such as NATO and the Organization of American States. The ILO contribution
is the fourth largest in this account. As part of efforts to reduce the budget deficit, Congress
has cut spending for the CIO account. The reduction is made more severe because
contributions to some international agencies, such as International Atomic Energy Agency
and NATO, have been protected from the cuts, requiring even greater reductions for the
remaining agencies. In addition, contributions to the ILO are set in Swiss Francs, rather
than U.S. dollars, so changes in the exchange rate also affect the U.S. assessment even after
money has been appropriated. The Department of State, as well as the U.S. labor and
employer delegates, have long been concerned that the U.S. arrears make it much more
difficult for the United States to achieve its foreign policy objectives in the ILO, including
reform of the agency, increased emphasis on core labor standards, and concentration on
child labor.
Agency Reform
U.S. proposals to reform the ILO mirror U.S. efforts at the United Nations, focusing
on budget reduction and transparency, elimination of waste, and effective oversight. H.R.
1757, the FY1998 authorization bill, as passed by Congress, required reform measures before
any arrears payments could be made. This included changes in the ILO budget and a reduction
of the U.S. assessment to 20%. H.R. 1757 passed both Houses but due to disagreement
between the House and the Administration over abortion language unrelated to the U.N.
agencies, the President vetoed the bill. Appropriations bills have included arrears funds but
they also require passage of an Authorization bill (and thus the reform measures) before
the arrears may be paid. In March 1999, a new ILO Director General, Juan Somavia of Chile,
will take office. His election was supported by the United States as the person most likely
to continue the reforms needed in the ILO.
H.R. 1757, the bill authorizing contributions to the ILO, contained a series of reform
“benchmarks” which must be met before any payment of arrears may be made. These include
a reduction of the U.S. assessment to the ILO from 25% to 22% in 1999 and to 20% in 2000.
In addition, the ILO must establish an independent inspector general similar to the UN
Inspector General, and he/she must prepare regular reports to the members. The ILO must
adopt program evaluation procedures to establish the continued effectiveness of programs
and terminate programs no longer needed. The ILO must establish clearer budget procedures
and not exceed budget levels agreed upon at the beginning of the biennium except by
consensus of members. Finally, the ILO must approve a 2000-2001 budget which is lower
than the 1998-1999 budget. Another provision of the bill, which sets the total U.S.
contribution to agencies in this account at $900 million, may ultimately require greater
reductions in U.S. contributions or withdrawal from one of the larger U.N. agencies.
U.S. government reform proposals for the ILO focus on clearer budget presentation,
budget reduction, elimination of waste and overlap, and effective member oversight. In all
these reform areas, the Department of State judges the ILO as one of the more reform-minded
UN organizations. According to the Department of State, the ILO has made changes in budget
format which have begun to address the U.S. desire for a clearer budget presentation but
have a long way to go. In other areas, such as reduced printing costs and meeting expenses,
the ILO has made substantial progress, according to the Department of State. Efforts to
establish program priorities and eliminate internal duplication and low priority programs

are being addressed. The ILO Governing Body adopted amendments which tighten financial
oversight and the agency does have internal and external audits. In all these areas, the
Administration expects the new Director-General to continue the progress made under the
current one.
In its February 1997 report on U.S. participation in 5 U.N. Agencies (GAO/NSIAD-97-

2), the GAO estimated that when inflation and the exchange rate are taken into account,

the ILO budget declined 2% in real terms between the 1994/95 biennium and the 1996/97
biennium. This resulted partly from action taken by the ILO Governing Body to reduce
expenditures after the budget was adopted in view of the unlikeliness of full U.S.
contributions. (The United States, Canada, Argentina, and Israel voted against the 1996-97
budget.) The June 1997 International Labor Conference approved a 2-year 1998-1999 budget
of $481 million, a 3.75% reduction, in constant dollars, from the previous biennium, according
to the Department of State. Under its normal procedures, the ILO Conference will not address
assessments again until the June 2000 ILO Conference. Until that time, the U.S. assessment
will remain 25% and the ILO is unlikely to qualify for arrears payments under currently
proposed provisions of reform legislation.
U.S. Ratification of ILO Conventions
The United States has ratified 12 of the 176 ILO conventions. Of the 12, two have
never entered into force because not enough governments ratified them. The small number
of ILO Conventions ratified by the United States has long been a matter of diplomatic concern
for many member states, particularly U.S. failure to ratify the “core” human rights labor
conventions. The United States has ratified only one of the “core” Conventions, no. 105
on forced labor. Another, no. 111, prohibiting discrimination in employment, was sent to
the Senate for consideration on May 18,1998.
Lack of ratification has historically been due to concern within Congress that ratification
would undermine the U.S. legislative process in domestic matters since treaties become the
law of the land, concern that the division of authority between states and the federal
government for labor standards would be undermined, and opposition from much of the
U.S. business community. Nonetheless, lack of ratification inhibits the U.S. ability to
encourage wider observance around the world of the standards set by them, according to
the Department of State. When the United States returned to the ILO in 1980 after a 2-year
absence, one of the changes adopted by the Administration was the establishment of TAPILS,
the Tripartite Advisory Panel on International Labor Standards. This panel, composed of
labor, business and U.S. government members, was established to provide a more systematic
assessment of ILO conventions by all concerned parties with the goal in mind of increasing
U.S. ratification of ILO conventions. Five conventions have been ratified since the process
began, including one of the core human rights labor conventions, number 105, which prohibits
forced labor. Number 111, which prohibits discrimination in employment, has been cleared
for ratification by the President’s Advisory Committee on the ILO following a favorable
report by TAPILS. Clearance by this committee means that there are no legal impediments
to implementing the treaty under U.S. law. In January 1997, then Labor Secretary Reich
recommended that the convention be submitted to the Senate for approval.