KAMPALA PRINCIPLE 2:DPs_SUBP 2.C

Sub-principle 2.C

Engage in partnerships according to international standards

 

Why is it important?

 

Compliance with national legal frameworks and alignment with international standards is necessary for private sector engagement (PSE) projects to produce sustainable development results. It is the responsibility of the development partner to design and use policies to safeguard international standards, implement due diligence processes for the appraisal of PSE partners and projects, and identify and respond to ESG risks. At the project level, all partners involved are responsible for closely monitoring adherence to national and international standards, and redressing emergent risks over the course of a project’s life cycle together. The role of civil society and trade unions in supporting this is critical.

Self-reflection questions
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Policy Level Project Level
  • Does your government’s or organisation’s PSE strategy refer to the requirements of international standards? These include, but are not limited to, major overarching development objectives such as the 2030 Agenda and the Paris Agreement, but also those of the International Labour Organization, the United Nations Principles on Business and Human Rights, and the OECD Guidelines for Multinational Enterprises.
  • Are you aware of international standards relevant to specific sectors and are these reflected in your PSE and other related policies? 
  • Do you have the requisite skills and (legal) staff or expertise to ensure broad compliance with international standards and national legal frameworks of partner countries? 
  • Do you offer capacity training for strengthening the national regulatory environments of partner countries as it concerns private sector activity?
  • For each potential PSE partner, is a comprehensive, tailored due diligence process in place to assess potential reputational and ESG risks? 
  • Does the process of screening potential partners and projects take heed from the OECD Guidelines for Multinational Enterprises?
  • Have you established a process to regularly assess adherence to national legal frameworks and relevant international standards? Have you clearly highlighted which project partner will be responsible for tracking such adherence?
  • For each project, have you established a whistleblowing or complaint procedure for stakeholders or observers to safely and transparently highlight transgressions against national and international frameworks?

Actions to consider
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Policy Level Project Level
  • Develop policies and selection criteria to only work with PSE partners that align with national ESG standards, your agency’s values, and international principles and guidelines.
  • Require all partners, as a condition of all partnerships, to adopt a human rights and labour policy that is aligned with applicable legal frameworks and standards such as the International Labour Organization’s Core Labour Rights or the United Nations Guiding Principles on Business and Human Rights.
  • Seek input from relevant international CSOs to ensure that your sectoral and overall PSE policies and strategies adhere to and reflect international standards.
  • Streamline the set-up of comprehensive and tailored due diligence processes by building on past experience in working with private partners.
  • Establish institutionalised review processes to appraise adherence to international standards on a regular basis. 
  • Formally work with local CSOs and trade unions to track adherence to national frameworks and international standards. 
  • Sensitise project partners to important and relevant international standards and frameworks.
  • Support the capacity of smaller private partners to adhere to international standards rather than punishing them or using overly rigid processes that exclude them from bidding or engaging.

Pitfalls to avoid
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Policy Level Project Level

      DON’T…

  • Treat adherence to international PSE standards as a “tick-the-box” exercise without seeking to align with the spirit, as well as the letter, of relevant global frameworks. 
  • Only adopt legally binding standards and not consider other relevant recommendations or voluntary commitments, particularly at the sectoral level, and the Kampala Principles.

      DON’T…

  • Assume private sector familiarity with international PSE standards and guidelines. 
  • Fail to track, flag and address risks or violations to standards.
  • Assume a standard due diligence approach must not be tailored to each project’s context and regulatory environment.

COUNTRY-LEVEL EXAMPLES

Global Affairs Canada bases its PSE strategy for Sustainable Development on key principles for private sector engagement that are framed by a wide range of international standards and initiatives. The principles reconfirm Canada’s commitment to exercising due diligence with its private sector partners and assessing compliance with the highest applicable environmental, social and governance standards, whether based on legal or voluntary frameworks. Private partners are thus obliged to do business in compliance with local, national and international norms that ensure operations in a socially and environmentally responsible manner.

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