Making investment promotion the engine for decent job creation The role of IPAs in the context of the SDGs Githa Roelans, Head Multinational Enterprises and Enterprise Engagement unit Enterprises department WIC 2016, Istanbul, October 2016
The Sustainable Development Goals and the Addis Ababa Action Agenda Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all Private international capital flows, particularly foreign direct investment (FDI), along with a stable international financial system, are vital complements to national development efforts. (Paragraph 35 of Addis Ababa outcome document) We will develop policies and, where appropriate, strengthen regulatory frameworks to better align private sector incentives with public goals, including incentivizing the private sector to adopt sustainable practices, and foster long-term quality investment.
Decent jobs: globally a top priority 670 million jobs will need to be created by 2030, to keep pace with the growth of the working-age population Currently 71 million jobless young people (women and men) One in two jobs is casual or unpaid 1 in 4 workers support their family on less than US$2 a day Need to tackle growing inequality among and within countries through increased sharing of benefits of globalization sustainable investment and decent work
Youth unemployment The percentage of youth aged 15-24 looking for, but unable to find work Source: World Employment and Social Outlook for Youth 2016, ILO
Youth unemployment The difference between the share of employed young women and employed young men as a percentage of the their respective populations (aged 15-24) Source: World Employment and Social Outlook for Youth 2016, ILO
International Labour Organization UN Specialized agency HQ in Geneva 187 Member States Unique tripartite structure (Gov, Employers and trade unions) Mandate: decent work and social justice
ILO Tripartite Declaration of Principles concerning Multinational Enterprises and social policy ILO instrument on investment/trade as well as on corporate social responsibility Aim: encourage the positive contribution of MNEs to socio-economic development and mitigate and resolve possible negative impacts Recommendations addressed to governments (home/host), enterprises and social partners Endorsed by all 187 ILO member states www.ilo.org/mnedeclaration
Challenges addressed by the MNE Declaration Shared benefits: How to ensure that Foreign Direct Investment (FDI) and trade (Global Supply Chains) contribute to more and better jobs/decent work in the country of operations? Inclusive growth: How to encourage positive contribution of multinational enterprises to socio economic development and minimize and resolve any negative impacts in the country of operations? Policy coherence: What is needed in terms of policies (public private) to make inclusive growth happen (national, regional and international)? Sustainable enterprises and Corporate social responsibility (CSR): How to better align private sector action with public national development and decent work priorities? Sustainable development Goals and Financing for Development
ILO Tripartite Declaration of Principles concerning Multinational Enterprises and social policy General policies Employment Training Conditions of work and life Industrial relations
Job creation a top priority for Ministries of Labour, employers and workers organizations Regional follow-up to ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy (Americas, Africa, Asia and the Pacific) Top issue in relation to FDI and MNEs: employment creation, training opportunities and linkages with national enterprises Quantity and quality of employment direct, indirect and induced inclusive growth
Employment and training are among the most important issues Americas Africa Asia and the Pacific
A few questions - Do increased FDI flows automatically lead to job creation in the host country? - Does FDI automatically lead to quality jobs and decent work in the host country? - What is needed to closer align investment facilitation with national development goals? - Review of incentives offered - Balance of power between governments looking for FDI and potential investors - National policy coherence
Recommendations from international policy instruments - Governments should carefully study the impact of MNEs on employment in different industrial sectors. Governments as well as MNEs, in all countries should take suitable measures to deal with the employment and labour market impacts of the operations of MNES (MNE declaration para 24) - 3 key moments: - When entry of MNEs is negotiated incentives and obligations in investment agreements - Once MNEs are operational in the host country CSR policies and practices of the enterprises at times stimulated by CSR policies by the government - When an MNE stops operations in host country delocalizes production employment and development impacts - Important processes - Measure and monitor the impact - Public-private dialogue opportunities to closer align with national development priorities - Enabling policy environment to enhance inclusive growth and decent job creation through policy coherence econ-social as well as active labour market policies, training, SME policies, etc.
Recommendations from international policy instruments - Other frameworks - UNCTAD s Investment policy for sustainable development framework - ICC Guidelines for International Investment - labour chapter - Guidelines for investors - Guidelines for government of home country - Guidelines for government of host country ILO standards and MNE Declaration
ILO MNE Declaration in action Capacity building and policy assistance at country-level Tripartite-plus Dialogue facilitation on decent work priorities Trainings on Business and decent work Pilot-methodology to measure impact of FDI/MNEs on decent work and case studies National policy coherence closer aligning economic and social policy decision making International policy coherence partnerships : UNCTAD (Investment Policy Framework for Sustainable Development)- WAIPA
Job creation a top priority for IPAs Almost 75% of IPAs ranked job creation as their primary or secondary objective, followed by technology transfer, export promotion, local linkages and domestic value added, and development of skills. UNCTAD, 2014
Questions for discussion Is job creation a priority in your country s investment policy and FDI attraction? What about the quality of jobs created? What is your IPA s experience in attracting FDI for more and better jobs? What are some challenges/barriers? Lack of investor interest or commitment to economic and social development in host country? Difficulties measuring the social impacts of FDI? Lack of policy coherence?
Final question How can ILO and WAIPA support your IPA to attract FDI for more and better jobs? Concrete ideas: capacity building measurement and monitoring tools national dialogue facilitation social KPIs resource kit with positive case studies Joint activities Exchange of experiences at international, regional and national level
More info www.ilo.org/multi www.ilo.org/mnelearning www.ilo.org/business Upcoming WAIPA-ILO course: Effective investment facilitation and sustainable development (ITC-ILO, 21-24 March 2017)