Info Service on Finance and Development (May14/02)
United Nations: Latin America cautions against partnerships without effective governance
New York, 8 May (Bhumika Muchhala) – Debate over the role of the private sector, especially corporations and financial entities, is gaining momentum in the United Nations.
Proponents of "private-public partnerships" and "multi-stakeholder partnerships" envisage the private sector as contributing to achieving sustainable development and the post-2015 development agenda.
However a growing number of civil society organisations and networks from around the world are voicing their deep concerns over such enthusiastic embracing of the private sector, given the track record of the big corporate and financial actors.
In the Open Working Group (OWG) consultations on the Sustainable Development Goals, as well as at the General Assembly debate on partnerships in April 2014, Brazil has consistently voiced substantive concerns on the issue of multi-stakeholder partnerships and private sector financing for development.
The central critique of Brazil, as well as its OWG partner country Nicaragua, is that the post-2015 development agenda cannot rely excessively on the role of the private sector for promoting sustainable development in the post-2015 period, and that a comprehensive assessment of existing and future partnerships should be carried out through a governance model that ensures ex-ante transparency and accountability. Below are highlights of recent statements by Brazil and Nicaragua (on behalf of the Community of Latin American and Caribbean States).
Brazil in particular has stated that such assessments should take into account the impact, accountability and compliance of existing partnerships, and their institutional arrangements, with the principles and governance mechanisms of the UN.
It pointed out that while the UN should be open to catalyze all existing support for sustainable development, this should not facilitate an evasion of government responsibility, from both developed and developing countries, from the achievement of sustainable development goals.
In the UN, Member States are faced today with a very palpable push to scale-up partnerships for the implementation of development cooperation in general, according to Brazil. But even more significantly, one can see that in some corners of the Secretariat and among certain members this is perceived to be a means of compensating for unmet commitments in ODA (official development assistance), by bringing in supposedly new and additional funding from private corporations and philanthropy, including for the Post-2015 Development Agenda.
Brazil expressed concern that this idea of outsourcing development cooperation to the private sector raises serious issues about the UN as an intergovernmental organization. It argued that these existing partnerships have expanded outside the purview of intergovernmental oversight, without regular and effective participation by Member States, be it under the General Assembly or the Economic and Social Council.
However endearing and well intended these partnerships might be, said Brazil, the fact is that Members States do not really have a clue as to how these new initiatives come about, what are the exact levels of participation and funding coming from outside the UN system and what the expected outputs and stated commitments are.
There isn't even a standardized form of reporting for these initiatives, some of which in fact duplicate mandated activities of the Organization approved by Members.
In the Organisation for Economic Cooperation and Development (OECD), the Development Assistance Committee (DAC) that overees ODA programmes, some worrisome developments are taking shape. In particular, a new so-called "Overall Contribution to Development" is redefining the ODA paradigm, Brazil noted. This notion of ‘overall contribution to development’ includes investments in developing countries even if these investments are made on a market, for-profit, basis. This is a change that expands ODA levels through new accounting methodology, but without actually delivering new and additional resources or commitments. The idea of concessionality in the provision of ODA is thus undermined in favor of private sector participation.
Brazil stressed that if private participation is to be a new form of development cooperation then the time has come to discuss what the responsibilities of the private sector are respect to UN mandates. Transparency and accountability must be ensured ex-ante for all actions and initiatives, be they publicly or privately funded. These are legitimate concerns that have to be addressed.
The volume of resources these initiatives claim to mobilize seem impressive if compared to what the UN system is capable of providing from its regular or even voluntary budgets. As an example, Brazil referred to the website of “Every Women Every Child” that says an estimated US$40 billion in funding was committed for a period of five years.
However, it also noted that there is scarcely any information for Member States as well as international civil society on the origins and destination of these amounts, on the decision-making that governs them, the rules that apply to projects they fund or the contractual responsibilities involved.
Brazil cautioned that Member States in the UN have to avoid negative past experiences with tied-aid or for-profit investments in developing countries under the guise of assistance, adding that the Post-2015 Development Agenda will encompass strategic and potentially very profitable markets of developing countries in such areas as energy, water services, oceans, forests, biodiversity, infrastructure and industrialization.
Brazil warned that Member States must avoid conflict of interest.
It also provided the concrete recommendation that UN involvement in partnerships must be subjected to the scrutiny and standards of intergovernmental bodies such as the General Assembly, ECOSOC or the High Level Political Forum (HLPF). Until member states agree on adequate reliable forms of multi-stake-holder partnership, as well as approval and oversight mechanisms and procedures, the UN is not yet prepared at this point to formally endorse the scaling-up of private sector and philanthropy participation in UN-sponsored and UN-branded cooperation for development.
Concerns of the Community of Latin American and Caribbean States (CELAC)
CELAC also delivered a strong statement at the April 2014 UN General Assembly thematic debate on the role of partnerships in the implementation of the post-2015 development agenda.
CELAC stressed that all activities undertaken under the global partnerships for sustainable development should fully respect the intergovernmental nature of the UN, as well as the UN Charter priniciples and UN Programme priorities for the biennium as stated in the corresponding General Assembly resolution on the proposed programme budget outline.
Partnership activities must be based on a milestone principle of development assistance provision with respect to commitments already made. Partnership activities must also be driven by member states.
With just over a year left until the expiration of the Millennium Development Goals (MDGs), an extra push is needed to address the unfinished agenda of the MDGs. This includes goal number 8 (MDG8 – on global partnership for development) and related intenraitonal commitments in development financing.
CELAC pointed out that the lack of timeframe and quantitative targets in MDG8, which sets it apart from other MDG goals, reflects the lack of political commitment to define more precise targets as part of the global partnership for development.
Partnerships must take into account the lessons learned from the failed implementation of MDG8, while looking ahead to the means of implementation for both the Sustainable Development Goals as well as the post-2015 development agenda for the next 15 years, and beyond.
Financing for development is a central element for the implementation of the internationally agreed goals, including the MDG and UN post-2015 development agenda.
CELAC expressed their strong interest on the establishment of a truly global development partnership, building upon Monterrey Consensus, the Doha Declaration on Financing for Development and the Rio+20 outcome document. These documents collectively integrate the post-2015 development agenda issues to be galvanized through the third international conference on Financing for Development in early 2015.
A genuine global partnership for development will only be effective with an international enabling environment for development, CELAC reminded the General Assembly. Such an environment requires the reform of governance mechanisms for international financial instituitons and the enhancement of coherence, consistency and coordination of the international monetary, financial and trading systems.
Such an environment must be founded on strong political will from all partners. It requires strengthened commitments from our developed partners to provide international cooperation and sufficient policy space to development countries, taking into account their different national circumstances, priorities and capabilities. In this regard, particular attention must be given to developing countries, with a focus on eradicating inequality between and within countries.
The post-2015 development agenda should include a well-designed framework to actualise promises into commitments. This framework must be backed by a limited but effective number of goals, targets and indicators. Goals related to global public goods must be attached to time-bound quantitative targets covering trade, investment, migration, technology, environment and global institutions. This is critical for devleoping countries, according to CELAC.
A responsible approach needs to be adopted on the question of partnerships involving the United Nations, particularly as it concerns participation of the private sector, philanthropic entities and civl society. For this purpose, it is necessary to to consider key elements such as transparency, monitoring, accountability, coherence, ownership, impact and intergovernmental oversight by the General Assembly or the Economic and Social Council.
The role of ODA in the provision of financial resources is also critical. CELAC expressed regret that only five developed countries have fulfilled their ODA commitments, and that ODA amounts have been reduced for two consecutive years for the second time historically. In the post-2015 development agenda, ODA is also being financially leveraged in developing countries in order to facilitate the achievement of sustainable development objectives.
CELAC concluded by recognising that an effective strategy for financing sustainable development will require the moblisation and effective use of financial resources, public and private and domestic and international.