Parliaments should take an active role in channelling corporate investment to sustainable development, say experts at the World Investment Forum.
Parliamentarians will play a critical role in unlocking greater corporate investment in sustainable development, said experts at a dialogue organised by the inter-Parliamentary Union for the World Investment Forum on 14 October.
The Inter-Parliamentary union, the international organisation for the parliaments of sovereign states, invited experts from law, banking and development, as well as parliamentarians to the dialogue. Experts agreed that parliamentarians will play a decisive role in providing a level playing field and a predictable regulatory environment for companies.
David Carter, Speaker of the New Zealand House of Representatives, said that above all businesses want certainty. "Governments come and go, but parliamentarians need to assure corporations that there is consensus on areas such as corporation tax and rules around Foreign Direct Investment (FDI)."
In 1994 the New Zealand Parliament passed a Fiscal Responsibility Act, making the government and Treasury responsible for reporting to parliament fiscal strategy, the current economic and fiscal situation, and the outlook over the medium and long-term. This Act was a step change in improving transparency in fiscal policy and the government's intentions.
Mr. Carter recommended that parliaments undertake regular assessments of public sector industries and services. "You need to assess which industries need to be run by the government... this changes over time," he said. Key energy and power companies in New Zealand have been partially floated, with the government selling off up to 49 per cent of state owned enterprises, thereby raising funds but also retaining control of resources.
Saber Hossain Chowdhury, who has been a Member of Parliament in Bangladesh since 2002, pointed out that not all parliaments have access to the data and information they need to design and assess policies. In developing countries, particularly in Least Developed Countries, there was a "disconnect between goals and resources," he said. "We need capacity-building programmes for parliaments, to help them use science and statistics to analyse policies."
Leonie Schreve, Head of Sustainable Lending at Dutch bank ING, discussed the bank's initiative to make its investment portfolio carbon neutral after the bank signed the UN Global Compact in 2006. Renewable energy deals now make up 39% of ING's global project finance energy portfolio, compared to just 5.6% in 2007. ING's research showed that companies that proactively address resource scarcity are more successful in the long run, and its leadership had acted on this information. Parliaments and governments need to make a stronger business case for sustainability, she said.
Australian lawyer Robert Milliner, who acts as Sherpa to the B20, the business advisory group to the G20, said that a level playing field was a top concern for firms. Preferential rights were often given to the first firm entering a particular market, but this could put other firms at a disadvantage. Parliamentarians should consider the costs and benefits of a package of incentives to both the "lead firm" and other investors, both foreign and domestic.
Mr. Nana Tweneboa-Boateng, who heads Empretec Ghana, advised parliaments to focus on the needs of entrepreneurs and Small- and Medium-sized enterprises, which account for nearly two thirds of manufacturing firms in Africa. Empretec is UNCTAD's training and mentoring programme for entrepreneurs. Supporting these firms with start-up incubators and advisory services would increase their ability to access funding and technology.