Where labor adjustments are required it is important to ensure that labor programs are fully planned for in the PPI reform process. Designing and implementing labor strategies are difficult and sensitive tasks, and the challenges facing governments are many: labor opposition, lack of social safety nets, and lack of functioning labor markets among them. But experience shows that PPI can proceed smoothly if efforts are made early in the process to deal with labor issues. Labor programs are most effective when efforts are made to develop a strategy that balances the interests of consumers in receiving better and more efficient services with measures that provide fair and equitable treatment for workers, develop a mix of restructuring options, compensate surplus employees, help workers reintegrate into the labor market, and inform and involve workers and labor unions in the reform process.
The primary objective of the Toolkit is to provide practical tools and information to help policymakers handle labor issues in PPI. (The Toolkit does not address the policy decision to undertake PPI or the other challenges involved, such as introduction of competitive markets, development of regulatory frameworks, and access to services for the poor. Those materials can be found in other toolkits and documents listed in the bibliography of this Toolkit.) Drawing from available information, practical experiences, and global best practices, the Toolkit provides a practical guide to assist practitioners in designing, implementing, and monitoring labor programs in PPI reforms, thus also helping build capacity in this challenging area.
Although broad lessons on labor adjustment in PPI are emerging, experience shows that no one strategy is universally applicable and the choice of measures depends on country and enterprise circumstances. Experience also shows that the interests of all parties need to be carefully balanced to ensure both good processes and good outcomes. Efforts to provide fair and equitable treatment for workers must be economically and financially feasible for the government and must give private operators the needed flexibility in making employment decisions. The Toolkit thus provides a wide range of frameworks, concepts, checklists, model documents, and case examples that together aim to help government officials make the appropriate choices for their circumstances. The Toolkit focuses on labor issues in PPI, but it applies equally to restructuring of state-owned infrastructure enterprises without private participation arrangements. Such reforms often involve similar labor issues and many of the approaches and lessons are applicable. Similarly, whereas the Toolkit focuses on infrastructure enterprises, it is also applicable to state-owned enterprises in other sectors of the economy where labor issues are a major source of concern.
The primary audience for the Toolkit is government officials responsible for preparing and implementing PPI and enterprise reforms. The term "implementing agency" is used to represent this audience. The agency may be a unit within the ministry of finance, the ministry of economy, the privatization agency, the relevant sector ministry, or the enterprise itself.
Wherever the Toolkit is used, it provides guidance on the policy and implementation challenges that governments face in dealing with labor issues. The Toolkit may also be a reference point for other stakeholders, including labor, the private sector, and consultants engaged in this area.
Users of the Toolkit should be better prepared to:
The Toolkit provides practical tools and information to help policymakers handle sensitive labor issues in PPI.
Although broad lessons on labor adjustment in PPI are emerging, experience shows that no one strategy is universally applicable and the choice of measures depends on country and enterprise circumstances. Experience also shows that the interests of all parties need to be carefully balanced to ensure both good processes and good outcomes. Efforts to provide fair and equitable treatment for workers must be economically and financially feasible for the government and must give private operators the needed flexibility in making employment decisions. The Toolkit thus provides a wide range of frameworks, concepts, checklists, model documents, and case examples that together aim to help government officials make the appropriate choices for their circumstances.
The Toolkit focuses on labor issues in PPI, but it applies equally to restructuring of state-owned infrastructure enterprises without private participation arrangements. Such reforms often involve similar labor issues and many of the approaches and lessons are applicable. Similarly, whereas the Toolkit focuses on infrastructure enterprises, it is also applicable to state-owned enterprises in other sectors of the economy where labor issues are a major source of concern.
Users of the Toolkit will be better prepared to design and implement a labor program.
The primary audience for the Toolkit is government officials responsible for preparing and implementing PPI and enterprise reforms. The term "implementing agency" is used to represent this audience. The agency may be a unit within the ministry of finance, the ministry of economy, the privatization agency, the relevant sector ministry, or the enterprise itself. Wherever the Toolkit is used, it provides guidance on the policy and implementation challenges that governments face in dealing with labor issues. The Toolkit may also be a reference point for other stakeholders, including labor, the private sector, and consultants engaged in this area.
Users of the Toolkit should be better prepared to:
The Toolkit consists of seven modules as described below.
Module 1 - Framework and Overview: This module provides a summary of the entire Toolkit and sets out the framework for the more detailed technical modules that follow. It provides a decisionmaking framework and road map that policymakers can use to guide them through the process of labor restructuring. The overview module consists of this introduction to the Toolkit and eight other sections:
Module 1 focuses on the key issues and lessons earned in each of those areas. It can be read as a stand-alone piece that provides an overview of the issues, or the various sections can be read independently as summaries of the subsequent modules that cover in depth the technical aspects and steps involved in designing and implementing various aspects of the labor program. These modules follow the same flow as module 1 and consist of the following:
Modules 2 - Labor Impacts of PPI: This module provides an analysis of the impact of PPI on employment, wages, labor contracts, and union participation.
Module 3 - Assessing the Size and Scope of Labor Restructuring: This module describes the tools (such as staff audits, benchmarks, and work force analysis) available to determine the nature and level of labor restructuring requirements.
Module 4 - Strategies and Options: This module reviews issues of timing and sequencing, and the various restructuring approaches that the implementing agency can take when designing labor programs.
Module 5 - Key Elements of a Labor Program: This module considers the key issues in planning and implementing severance payments, pension payments, redeployment programs, and employee ownership share arrangements.
Module 6 - Engaging with Stakeholders: This module discusses strategies and tools for involving workers, unions, and other stakeholders, as well as arrangements for implementing the labor program.
Module 7 - Monitoring and Evaluation of Labor Programs: This module provides a framework for establishing monitoring and evaluation systems for labor programs.
The Toolkit also includes this Web-based CD-ROM with searchable documents, spreadsheets, sample terms of reference for obtaining the needed expertise to carry out various labor-related tasks, case studies, and other relevant data. The CD-ROM follows the module structure described above and provides a gateway into and an outline of each module's content, with such supporting materials as links to the full-print text modules of the Toolkit, and checklists, articles, case examples, tools, and links to other relevant Web sites.
The Toolkit is complemented by a CD-ROM that provides supplementary tools and documents.
Each module of the Toolkit is designed so that it can be read as a stand-alone piece in its own right, with cross-references highlighted where appropriate. Each module ends with suggestions for finding additional material on the CD-ROM and elsewhere. Icons in the Toolkit highlight:
Tools available on the CD-ROM
Additional material and documents on the CD-ROM
Links to Web sites
Other materials and sources of information.
The Toolkit draws on a wide range of materials and experiences from around the world. The aim is to provide policymakers with practical guidance on how to deal with labor issues in PPI reforms. The following organizations' financial contributions made the development of this Toolkit possible:
The Toolkit was prepared by the Adam Smith Institute of the United Kingdom, under the management and supervision of the World Bank's Investment Climate Department. Representatives from the following organizations reviewed the Toolkit and provided comments:
We thank them for their contributions and recognize that those contributions do not necessarily imply endorsement of the final product.