Corporate actions and targeted policies can support gender equality in developing countries

Geneva, 14 October 2014 (UNCTAD press release) – Women’s Empowerment and Gender Equality – the Role of TNCs

The potential positive impact of foreign investment on women’s empowerment through the creation of formal employment and business linkages is considerable, but the operations of transnational corporations (TNCs) also risk increasing women’s vulnerability in the workplace or exacerbating gender inequality, a new UNCTAD report has found.

Investment by TNCs and Gender, launched during a session on women’s empowerment at the UNCTAD World Investment Forum on 14 October, argues for targeted policies and corporate action to ensure that the activities of TNCs translate into real benefits for women in developing countries.

Investment by multinationals has been instrumental in creating job opportunities for women, particularly in labour-intensive, largely export-orientated industries. These include textiles, garment manufacture, electronics, agriculture, call centres and the hotel, catering and tourism industries, the report says.

As well as providing access to employment opportunities for women, multinationals often offer higher wages, employment stability, skills development and further career opportunities. In addition, such jobs are likely to be unionized and better protected under labour legislation.

But the report also identifies a number of risks, such as poor working conditions and limited access to training for women, especially when the jobs created are confined to low-paid activities or occur in the informal sector. Women employees are more at risk of being marginalized when firms upgrade or when low-cost, labour-intensive industries decline.

The report underlines the key challenges to maximizing the benefits of investment by TNCs for women’s empowerment. A positive impact is not automatic, the effect can vary over time and it is country- and context-specific, the report says.

Legal and sociocultural impediments can prevent access to employment for women. For example, despite having access to education, legal restrictions often prevent women from participating in the labour market. Patterns of job segregation deeply rooted in social structures may restrict women’s opportunities for employment, upgrading skills and career progression. Such impediments can also be reflected within businesses themselves.

The report notes that another important constraint is the paucity of data on women’s empowerment – such data would enable Governments to adopt targeted policies. There is also a lack of research into the specific impact of investment by TNCs on women’s participation in labour markets.

The report proposes a number of targeted policies and actions that Governments and foreign firms might undertake to address such challenges. Three key policy interventions were identified:

  • Governments need a specific strategy for women’s empowerment that complements efforts to achieve economic and social development. The strategy should consider how different policy areas impact on each other: for example, how women’s access to education determines their employment opportunities or how support for women’s health needs directly affects their access to labour markets.
  • Governments should also consider how foreign investment can support women’s equality, not undermine it. To achieve this, a number of actions can be taken to facilitate and protect women’s employment by multinationals and promote a “gender inclusive TNC value chain”. These include providing infrastructure and social protection, preparing women for work with TNCs, protecting women at work and promoting women’s career development.
  • Related to these actions, Governments should give particular attention to selected labour-intensive, export-orientated sectors and highly mobile sectors, where women are often strongly represented in the workforce.

For multinationals, the report proposes a set of guidelines on gender equality that should be included in their business models. These guidelines directly stem from the research undertaken for the report and recognize the role that foreign firms can play in supporting women’s empowerment. They include:

  • Treating men and women equally
  • Incorporating matters of gender equality into TNC investment projects and business models
  • Gathering data on women’s participation in the TNC workplace
  • Promoting women’s empowerment
  • Respecting equal rights in collective bargaining
  • Assessing the “gender impact” of divestment decisions and the development of “gender-sensitive” divestment models.

The report was launched at an interactive session during the UNCTAD World Investment Forum 2014 at which speakers discussed its key themes, highlighting their experiences of the impact of TNCs on gender, and considering avenues for policymakers to minimize risks and maximize benefits of TNC activities for women.