The Promotion of Sustainable enterprises: Enabling Environments 3-4 May Jakarta, Indonesia

Transcription

1 The Promotion of Sustainable enterprises: Enabling Environments 3-4 May Jakarta, Indonesia Graeme Buckley ILO, Geneva

2 Approaches to enterprise and entrepreneurship development: Paradigm 1 Paradigm 2 Paradigm 3 Targeted enterpriselevel interventions Plus the enabling environment National Competitiveness Business Development Services Business Development Services Business Development Services Financial Services Financial Services Financial Services Business Enabling Environment Business Enabling Environment Association building Investment Climate Making Markets Work for the poor Value Chains

3 Investment Climate Open markets such as financial, labour, etc. Rule of law Business Environment Equitable and efficient labour markets Policy and Legal Framework Regulatory and Administrative Framework Institutional Arrangements Sector-Specific Business Environment Regional, National and Sub-National Business Environment Skills and HRD Political stability Economic predictability Infrastructure

4 Functional Areas of Reform Simplifying business registration and licensing procedures Improving tax policies and administration Enabling better access to finance Improving labour laws and administration Improving the overall quality of regulatory governance Improving land titles, registers and administration Improving social dialogue Broadening public-private dialogue processes with a particular focus on including informal operators, especially women Improving access to market information

5 Importance of the sustainable enterprises It is not possible to eradicate poverty without creating productive jobs The private sector is the principal source of growth, wealth creation, and productive jobs. How best to unleash enterprise in a sustainable and socially responsible way The ILO constituents decided to have a general discussion at the International Labour Conference (2007) on what they called the Promotion of Sustainable Enterprises

6 Sustainable Enterprises: Win- Win-Win Workers: Increased job satisfaction Improved job security Increase in incomes. Enterprises: Economic viability and profitability Harmonious labour management relations Transparency. Governments: Increased national productivity and competitiveness Increase taxation revenue Decrease in welfare costs

7 Sustainable enterprises are profitable enterprises, integrating employers and workers, that need and have a right to expect from the state and society enabling conditions for investing, doing business and creating wealth (including respect for property rights, stable rules, effective state institutions and public policies). They comply with national law and regulatory requirements and contribute to society by integrating into their operations ethical values and social and environmental principles as expressed by international standards, including International Labour Standards.

8 Broad political and social conditions Governance and Social Dialogue Regulatory & legal environment for enterprise Trade and regional integration policies and market access conditions Human resources - Investing in People (education, skills and health) Sustainable enterprise Market structure, value chains & customer/supplier relationships Financial and physical infrastructure and services Social partners, support networks and institutions Sectoral policies (agriculture, manufacturin g and services) Macroeconomic policies and demand conditions Environmental conditions

9 strong and efficient markets need strong and effective institutions sustainable enterprises need sustainable societies: business tends to thrive where societies thrive and vice versa

10 What they decided Recognizing the importance of Sustainable Enterprises, the ILO constituents agreed on 1. The 17 pillars of what constitutes an environment conducive to sustainable enterprise development. 2. The 6 guiding principles enterprises must follow in order to be sustainable and maximize their contribution to society, and Since they are a global consensus arrived at by tripartite discussion between governments, employers and workers, they provide a powerful shared vision, very useful for national consensus building processes.

11 Six enterprise-level principles for responsible business The ILO s tripartite constituents agreed on six enterprise level principles that enterprises should abide by. Social dialogue and good industrial relations Human resource development Conditions of work Productivity, wages and shared benefits Corporate social responsibility (CSR) Corporate governance and business practices

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13 Supporting Business Environment Reforms Practical Guidance for Development Agencies

14 Reforming the Business Environment Development agencies support their programme partners (government and the private sector) in their efforts to reform the business environment. Business environment reform changes business behaviour in ways that lead to increased levels of investment and innovation, and the creation of more and better jobs. This is done by: Reducing costs Reducing risks Increasing competitiveness And can be based on national, sub national or sectoral approaches

15 2. SOLUTION DESIGN PHASE Design high-level structure Engage stakeholders Agree overall design Develop implementation plan 1. DIAGNOSTIC PHASE Define purpose and objectives Identify main stakeholders Get the commitment Mobilize funding Analyze constraints Analyze capacity Collect baseline data Phases in Business Environment Reform 3. IMPLEMENTATION PHASE Provide technical assistance Train civil servants Launch reform procedures Information campaign Fine-tune reforms based on user feedback 4. EVALUATION AND SUSTAINABILITY Conduct programme evaluation Ensure recommendations are incorporated in new procedures Prepare programme reports Conduct impact assessments (usually done beyond the programme cycle)

16 The guidance explicitly highlights the importance of addressing the needs of small enterprises and clearly positions business environment reform in a broader context of sustainable development and good governance. For example, it states the need to: recognise the linkages between environmental, social and economic aspects, including the impact of gender and that concerns about social and environmental costs and benefits are just as important as the impact (of business environment reforms) on business support initiatives that examine the effect the business environment has on the informal economy and the rights of those who work there

17 Recognise that good regulations are necessary to secure benefits, protect workers, consumers and the environment, to promote the rule of law and for efficient functioning of market economies Promote local stakeholders and develop their capacity to participate in business environment reforms (which) is critical for successful and sustainable reforms This can include strengthening the role and capacity of state agencies, the private sector, workers organisations as well as supporting better dialogue and advocacy.