With governments convening in New York City this week for the first United Nations (UN) meetings on implementation of the Sustainable Development Goals (SDGs), the International Chamber of Commerce (ICC) has issued a new statement on policy frameworks needed to drive investment in sustainable development.
The United Nations Conference on Trade and Development (UNCTAD) estimates that the annual investment gap in key development sectors for developing nations stands at US$2.5 trillion. The Addis Ababa Action Agenda, which provides a new global framework for financing sustainable development, underscores the importance of mobilizing private sector capital to support implementation of the UN’s 2030 development agenda.
Moving from agreement to action
As the international community now grapples with the task of implementing the SDGs, the new ICC paper stresses the need for governments to maintain and strengthen investment promotion and protection agreements to help realize the vision of driving foreign direct investment in sustainable development.
If implemented on a global basis, these eight ICC principles can provide an essential foundation for leveraging the investment needed to eradicate poverty, combat climate change and ensure inclusive growth.
In this connection, the paper – prepared by the ICC Commission on Trade and Investment Policy and supported by ICC’s World Trade Agenda initiative – establishes eight policy principles to boost investor confidence and unlock private capital. Specifically, it encourages policymakers to:
- Create an investment policy climate by adopting a holistic policy environment which nurtures private investment.
- Protect investment by supporting international investment agreements, which are important tools to protect foreign direct investment (FDI) flows.
- Include dispute resolution mechanisms in all investment agreements to ensure investors have direct access to effective and independent dispute settlement.
- Avoid sectoral discriminations in the negotiation of investment treaties which have a direct impact on the inflow of FDI.
- Devote greater attention to state-owned enterprises which can enjoy a range of preferential benefits and compete with the private sector in investment and trade areas.
- Refrain from abusing “national security” provisions in agreements and treaties for protectionist purposes. Such procedures should be applied in a transparent, fair and non-discriminatory manner if they are to be exceptionally used.
- Avoid forced localization provisions which have negative repercussions on both the investor an on the host country’s attractiveness as an investment destination.
- Adopt a multilateral framework on investment that would provide a clear set of rules for investors, governments and relevant stakeholders.
Commenting on the launch of the paper, ICC Secretary General John Danilovich said: “Financing will be a linchpin for the success of the UN’s 2030 sustainable development agenda. Foreign direct investment can play a critical role in fostering economic growth and addressing key environmental challenges.
“If implemented on a global basis, these eight ICC principles can provide an essential foundation for leveraging the investment needed to eradicate poverty, combat climate change and ensure inclusive growth.”