The International Labor Organization (ILO) has been supporting Nepal in addressing the issues related to labor since the Himalayan country became its member in 1966. Over the course of 57 years, the United Nations agency has remained active in a wide range of areas that include advocacy of the rights of workers, labor welfare, empowerment of women workers, ending child labor, and policy formulation.
Numan Özcan is the Country Director of ILO Office for Nepal since April 2023. A Turkish national, Özcan has more than 25 years of experience in policy advocacy and program implementation in employment, labor rights, social dialogue, and social policies. Before coming to Nepal, he was the Director of the ILO Office for Türkiye. In a conversation with the HRM, Özcan talked about the ILO’s support to Nepal, the achievements in addressing labor issues, and current challenges, among other topics. Excerpts:
Q: Nepal joined the International Labour Organization (ILO) in 1966. How have these years been in terms of addressing labor issues in Nepal? What major progress Nepal has achieved in this regard? How has ILO supported Nepal over the five and a half decades?
A: From the very outset, the ILO-Nepal partnership has been mutually rewarding. At the request of the Government of Nepal, ILO initiated its technical assistance efforts in the early 1970s with a pioneering project focused on cultivating the skilled human resources needed for the tourism sector of Nepal. It’s worth noting that the ILO’s technical support has consistently aligned with the evolving needs and priorities of the country. As of now, we have successfully implemented a score of programs and projects mainly focusing on employment and skills, vocational training, labor-based technologies, labor policy and administration, social security, and small and medium enterprises development.
As far as I understood, Nepal’s labor movement is relatively nascent. The restoration of the democratic system in 1990 brought about a significant shift in the country’s political landscape, energizing the labor movement. Remarkably, Nepal achieved several significant milestones in a short time, particularly in the realm of labor rights and labor relations, and the ILO continuously extended its technical assistance to bring about those changes.
In terms of technical advisory services to the Government of Nepal as well as to the employers’ and workers’ organizations in the country, the early stages of the ILO-Nepal partnership primarily revolved around fostering awareness and understanding of the values, fundamental principles, and rights at work that constitute the bedrock of the ILO and its commitment to social justice. Subsequently, we shifted our efforts towards providing technical assistance aimed at developing essential national policies and legal frameworks that promote and uphold fundamental labor rights. More recently, our attention has centered on enforcing labor legislation, creating decent jobs, enhancing the capacity of key ILO constituents, including government ministries and departments, and establishing sustainable mechanisms for the effective coordination, implementation, and monitoring of legal provisions related to labor and employment.
Nepal has traversed a significant journey from the historical Nepal Factories and Factory Workers Act of 1959 to the latest Labor Act of 2017, widely regarded as one of the most progressive labor legislations in South Asia. The formulation of the Labor Act, 2017 received technical support from ILO, with active participation from government bodies, employers’ organizations, and workers’ unions.
Notably, Nepal has taken substantial steps to extend social security coverage to a broader spectrum of the workforce, including informal sector workers and Nepali migrant laborers in destination countries.
Q: What are the key areas of focus of ILO in Nepal currently?
A: ILO’s key areas of work in a given country are defined in a country program document, which we call the “Decent Work Country Programme”. Based on inputs from national partners (government and employers’ and workers’ organizations), it defines our priorities and provides us with a road map for the work of the ILO.
We are now in the process of finalizing our new Decent Work Country Programme for Nepal for the next five years. It has three priority areas:
The first Priority is about productive employment and social security. Here we focus on promoting decent employment opportunities and improving the business environment for entrepreneurship and sustainable enterprises. Support is being provided to the Employment Service Centers to improve their capacities to deliver quality employment services. We also promote skills development with a lifelong learning approach.
Promoting social protection and labor protection through sustainable social security schemes and improved adequate minimum wage and care policies is also a focus area under this priority. Supporting the transition from informal employment to formal employment constitutes a big portion of our work.
The second priority is to promote international labor standards and fundamental principles and rights at work. Here, we focus on the elimination of child labor and forced labor, as well as improving labor migration governance and protecting Nepali migrant workers’ rights.
Our third priority aims to increase the capacities of government institutions, employers’ and workers’ organizations, namely trade unions, to take part in effective social dialogue and policy implementation.
We have ongoing projects in all the above areas which we implement at all levels of the government together with our partners.
Q: What problems exist for Nepal to create a labor-friendly environment in the country?
A: Nepal is currently undergoing a significant transition. By 2026, it is moving from a least developed nation status toward a developing one. However, this transition brings with it a set of inherent challenges. The country is grappling with economic obstacles, including high levels of poverty and unemployment. These economic factors can create barriers for workers seeking better working conditions. Some key issues, based on my relatively new perspective in this country, include:
While Nepal does have labor laws in place, they often suffer from ineffective enforcement, which can result in insufficient protection of workers’ rights and interests.
A significant portion of Nepal’s workforce operates in the informal sector, which lacks adequate regulation and enforcement. Workers in this sector often lack awareness of their rights and organizing them into trade unions can be a challenging task. Child labor remains a pressing concern in Nepal, necessitating continued efforts to combat this issue.
Although Nepal is evolving toward a more equality-based society, historical patriarchal norms persist, leading to gender disparities in the labor market. Women frequently face discrimination and unequal pay.
The frequent changes in government leadership in Nepal have the potential to impact national policies. Achieving policy stability is crucial for the country’s progression.
Nepal would greatly benefit from more effective and efficient social dialogue institutions that incorporate representatives from government, employers’ organizations, and workers’ organizations at all levels of governance—local, provincial, and federal. These institutions play a vital role in fostering harmonious industrial relations that benefit employers, investors, and workers alike.
Q: The recent years have seen upheavals that have had significant impacts on the global labor market. How do you assess the challenges for Nepal in the wake of the changes occurring worldwide?
A: Nepal is not an exception when it comes to the challenges induced by the wake of changes occurring in the global labor market. Globally, the labor market is gearing up toward more demand for workers with specialized skills. If Nepal wants to benefit from globalization and technological advancement, it must skill up its labor force.
One of the biggest challenges for Nepal is to transform its predominantly informal labor market into a formal one where the rights of the workers are protected. I know the Government of Nepal has been working on its plan of action to formalize the informal sector. These efforts should continue with the involvement of all relevant actors.
While I see remittances from Nepali migrant workers substantially contribute to Nepal’s GDP, I have come across employers claiming that they could not find skilled workers in the country. I have also read that the health service sector is facing a shortage of competent health workers. Somehow, for me, the prospect or challenge of “brain drain” looks unfortunately imminent in the case of Nepal. Protecting the rights of Nepali migrant workers abroad is a significant challenge.
Q: How prepared do you think Nepal is in terms of facing the challenges?
A: I think Nepal has made efforts to address the challenges brought in by the changes in the global economy and labor market conditions. Nepal has been working on the potential challenges that it might face considering its LDC graduation in 2026. This requires close collaboration of the government with the private sector and other stakeholders to quickly formulate relevant policies and mechanisms and put them in place in a timely fashion.
I am aware that Nepal has made efforts to improve its education and vocational training systems, but there may still be a skills gap, particularly in sectors with high global demand, such as information technology and healthcare.
In view of its graduation from LDC status, Nepal’s participation in international trade agreements and economic partnerships can impact its labor market.
Q: Currently, an exodus of skilled, semi-skilled, and unskilled Nepali workers is taking place as the country is mired in a deep economic recession. What needs to be done to minimize the impacts of this exodus?
A: First of all, I would like to emphasize the importance of putting in place policies and programs that create employment opportunities and quality jobs in the country so that people do not need to migrate for economic reasons.
If people have “decent jobs” that are productive and fulfilling, jobs that pay adequate salaries, jobs that respect rights at work, jobs where people can raise their voices in an organized manner and if the economy is able to create decent working opportunities, then the much needed young and productive labor force can remain within the country and can work for the development of their own country.
Furthermore, a skilled and productive labor force should be retained in the country to minimize the negative impact of outgoing migration.
It is also a fact that workers gain valuable skills and knowledge when they work abroad. The country can try to attract those migrant workers back and benefit from their experience and know-how. The returnee migrants can also be a good source of investment and entrepreneurship which leads to more employment creation.
Q: What should be done to ensure their welfare and occupational safety in foreign lands?
We are all aware that migration is a widespread phenomenon in Nepal, even with increasing pace. Then the question is how we can at least make sure that this labor migration happens in a fair and orderly manner. How to make sure that foreign employment is dignified, and that the workers’ rights are respected in the destination countries?
Before they leave the country, migrant workers need to have sufficient skills so that the jobs that they will be doing in the destination countries are quality jobs. This will not only help them find a good place in the labor market and have better working conditions, but also it will allow them to earn more and be able to save and send back as remittance.
Also, measures should be put in place to prevent any abusive and exploitative recruitment practices. We know that the costs that the workers incur can be very high, leaving them and their dependents indebted for a long time.
The way to ensure a fair and orderly migration is to organize the labor flow through Bilateral Labour Migration Agreements. These agreements provide conditions for recruitment, skills needed, rights at destination countries, and social security and health and safety provisions. We are happy to see that Nepal is pursuing to increase the number of these agreements with destination countries.
When they are in the destination country of course it is imperative that the migrant workers benefit from the consular services of the Nepal missions in abroad.
Migrant workers often face unfavorable working conditions, and serious health and safety risks, with little labor protection and rights. They may also face health issues, exploitation, and deportation.
In all these respects, there is a great role for the consular services in destination countries to monitor the situation of Nepali workers and be ready and available to provide necessary consultation, guidance, and -where necessary- protection services. For this, the technical and human resource capacity of foreign missions needs to be strengthened.
Q: How should the government and the private sector play their roles as key stakeholders?
A: It is primarily the private sector that drives the economy and creates jobs. The role of the government is to provide an enabling environment for businesses to flourish and grow. Only in this way the private sector can create decent jobs and contribute to the sustainable development of the country. The government also has a regulatory role, as well as enforcing the legislation.
Q: Over the last couple of years, Nepal has taken steps in labor welfare such as expanding the social security net and amending the Labor Act. Are these steps sufficient moving forward?
A: Nepal has taken positive steps by expanding the social security net and amending the Labor Act. However, these measures are not free of challenges in terms of their enforcement. The impact of these measures largely depends on how effectively they are implemented. For example, expanding the social security net is valuable if it reaches and benefits the intended beneficiaries. I came to know that trade unions have been calling for the effective implementation of the Labour Act 2017 and the Social Security Act 2017.
It is a positive development that the Labor Act 2017 governs all the workers in Nepal whether they are in the formal or informal sector, considering that a significant portion of Nepal’s labor force operates in the informal sector. But the big challenge is how to regulate and enforce the provisions of the law in the informal sector. Further measures and enforcement capacities that ensure effective implementation of those legislations are required.
Q: The Social Security Fund (SSF) has announced to provide social security coverage to migrant workers and laborers in the informal sectors. However, SSF officials admit that this objective is hard to achieve as bringing such workers under their umbrella remains a difficult task. How can this objective be achieved?
A: Undoubtedly, this is a formidable undertaking, and implementing it is easier said than done. To realize this goal, a range of supporting mechanisms must be put in place to make it operational.
First and foremost, we need to promote the registration mechanism for informal workers and ensure that they are well-informed about the registration process. The workforce engaged in the informal sector is huge compared to that of the formal sector, prompting questions about the SSF’s capacity to extend its services to informal sector workers. This may necessitate a phased approach to implementing social security coverage while the SSF steadily enhances its capabilities. It is crucial to expand efforts aimed at formalizing the informal sector.
We should provide opportunities for informal sector workers to acquire additional skills that are in high demand, enabling them to transition into formal sector employment.
Given Nepal’s substantial population of overseas migrant workers, safeguarding their rights and well-being should remain a top priority. Nepal must establish bilateral agreements and policies to execute these measures concerning Nepali migrant workers in destination countries. While social security measures are vital, diversifying the economy to create more domestic employment opportunities is equally critical for long-term sustainability.
