Private sector: Mismatching development with economic growth?

This briefing aims to shed light on the impact of the private sector’s involvement in development, particularly on the achievement of the main development cooperation goals of inequality reduction and poverty eradication through a human rights based approach ensuring a space for civil society. The main objective is to question the recent promotion of and blind support given to the private sector as the principal actor for development.

SOLIDAR’s general recommendations are:

• To define and adopt a normative framework offering an approach and clear guidelines to the private sector when engaging in development. It means ensuring a participatory, solidarity-based and human rights-based approach to development while keeping inequality reduction and poverty eradication as primary objectives and promoting decent work. The 2030 Agenda, promoting policy coherence for sustainable development, should help establish this framework to ensure that the private sector’s involvement does not go against the achievement of social cohesion and human rights;
• To improve and expend more effort on transparency, accountability and regulations. This requires: (1) the regular and public publication of data and information on the activities and results of the projects (transparency); (2) the setting of clear social, labour and environmental standards in all contracts, which should be regularly assessed and monitored internally but also by independent and external actors, including civil society organisations (accountability); (3) the establishment of binding instruments to ensure compliance with standards and limit development-unfriendly corporate behaviour such tax avoidance or evasion (regulation); (4) the establishment of a free, accessible and independent complaints mechanism to avoid conflicts of interests;
• To ensure that any development-related foreign direct investments, business investment, responsible corporate actions and projects are designed in line with the country and local specificities as well as with the national development strategy. Consultations with all concerned stakeholders from government officials and worker representatives to locals and communities must be held during the project design as well as during the implementation process.