What is the role of the private sector in development?

In order for the international community to develop the means for sustainable development that successfully eradicates poverty, better balance must exist between the different “partners”.

On the 25 September 2013, the United Nations discussed the priorities for the new development programme which will supersede the Millennium Development Goals (MDGs) in 2015.

The concept of a “universal development agenda” emerged strongly in the UN Secretary-General’s report. We can only applaud this willingness to articulate, in a coherent manner, the fight against poverty in Southern countries and the questioning of the Northern development model whose social, economic and environmental “footprint” on the rest of the world exacerbates poverty and inequalities.

By including this requirement, Ban Ki-moon is responding to a long-standing demand from civil society. However his proposal for a future partnership is based on the notion of economic growth and would require questions to be asked about the role of economic actors who are being asked to becoming increasingly more involved.
Although the concept of corporate “responsibility” is mentioned several times, its scope is not defined. The contribution of these actors is always presented positively in this document without taking account of the negative impacts that their actions sometimes have on development and the populations, sometimes slowing down or even preventing the implementation of the MDGs in some countries.

In the absence of a framework, economic interests often result in the sheer pillage of natural resources. In the developing countries, multinational companies are responsible for tax evasion estimated at in excess of 125 billion euro per annum, which exceeds the total amount of public development aid.

In the absence of a framework and adequate social dialogue, the doctrine of competition involves them in a race to the bottom for taxation and social issues.
Recently, the collapse of a factory in Bangladesh highlighted the serious infringements of the rights of thousands of works by subcontractors working for international companies. The companies’ social and environmental responsibilities too often employed to improve their image are only very rarely a genuine tool for bargaining and dialogue with the stakeholders, including the populations affected.
The influence of the private sector is such that due to the lack of a framework in this area also, numerous States sacrifice the rights of their people to offer favourable conditions to investors. Since the 2002 Monterrey Consensus, the financing of development has been progressively delegated to the private sector that does not always pursue objectives that are coherent with solidarity.

It is not a question of disputing the role that the private sector could play. But in order for the international community to develop the means for sustainable development to eradicate poverty, a better balance is needed between the different “partners”.
The negotiation of agreements define the stakes of CSR could be used as a lever. At the same time, the States must assume their leadership role in the interest of the common good.

For this purpose it is necessary to strengthen the laws governing multinationals. In parallel with advances for increased fiscal transparency, the international regulations must be adapted so that it recognises the legal realities of large international groups. Parent companies must urgently be held accountable, including before the Courts, for the results of the actions of their subsidiaries and subcontractors on workers’ rights and those of the people. For this, the requirements outlined in various UN texts must be incorporated into the States’ national law.

A solid and coherent framework for global governance must also be defined. The institutions within the UN system play a triple role: political, normative and operational. The absence of political coherence within the WTO, the G8 and the G20 among others, make global governance inefficient. The UN organisations should be able to ensure the respect of global standards, by involving civil society and giving the States the means to sanction the multinational companies once their liability has been established.

These are two conditions required to achieve development that is sustainable and fair and respects human rights.

Nathalie Péré-Marzano, Coordinator of the AMCP (Global Call to Action against Poverty)

Bernard Pinaud, Vice President of CCFD-Terre solidaire

Laurent Berger, CFDT General Secretary

Thierry Lepaon, CGT General Secretary

François Soulage, President of Secours Catholique

Pierre Radanne, President of 4D

Janine Forestier, Présidente of Terre des Hommes France for the ESCR platform