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Statements in International Organisations


UNCTAD - Commission on Investment, Technology And Related Financial Issues (Geneva, 12 - 13 February 2008)

Statement by Ms Martina Lodrant, Permanent Mission of Slovenia on behalf of the European Union


I. Introductory And General Remarks

It is my pleasure to take the floor on behalf of the European Union. The Candidate Countries Turkey, Croatia* and the former Yugoslav Republic of Macedonia , the Countries of the Stabilisation and Association Process and potential candidates Albania, Bosnia and Herzegovina, Montenegro, and the EFTA country Norway as well as the Republic of Moldova, Armenia and Georgia align themselves with this declaration.

First of all, let me congratulate you and your Bureau on your election and wish you success in carrying out your duties and responsibilities. The European Union assures you of our active participation in this important stock-taking session and we hope that based on our collective effort the discussion here will provide us with valuable inputs for our ongoing work on the outcome document for UNCTAD XII.

In this opening statement, my intention is to offer our principal remarks across all substantive agenda items. As we move on to examine each of them, I will make further and more detailed comments.

As in the previous sessions of the two other Commissions, the EU prefers at this point to leave negotiations and any forward-looking conclusions regarding the work of UNCTAD to the PrepCom and the Accra Conference. As we see it, the main objective of this meeting is to take a critical look at what has been accomplished in terms of UNCTAD's work in the investment and technology area during the last year and the last quadrennium, including the respective role of this Commission. This collective assessment should then inform our positions as we go back to the PrepCom to negotiate the outcomes of UNCTAD XII.

The EU has been consistently supportive of UNCTAD work on investment issues based on a clear substantive fit, the crucial role of investment for long-term development and the organization's record of achievement in this area. The G8 2007 Summit in Heiligendamm, which invited UNCTAD, jointly with the OECD, to develop best practices for creating an institutional environment conducive to increased foreign investment and sustainable development, is a recent recognition of this record and expertise. In this connection, we would welcome an update from the secretariat on the follow-up to the G8 call.

Allow me also to take this opportunity to congratulate the secretariat on winning the Africa Investor Magazine's 2007 award for the latest of its Blue Books "Best Practice in Investment Promotion and Facilitation of Zambia".

II. Item 3: FDI and financing for development

Moving now to item 3 of our agenda, the EU commends the secretariat for producing another high-quality issue of the World Investment Report which illuminates the latest trends in FDI, as well as providing a comprehensive look at the involvement of TNCs in extractive industries and its development perspective. We also appreciate the additional note on FDI as a source of development financing (TD/B/COM.2/80), which usefully outlines issues for further analysis and consideration.

In 2006, FDI inflows rose for the third consecutive year and it is encouraging that all regions participated in this growth. Other noteworthy trends highlighted by the 2007 WIR are: rapid global expansion of TNCs from emerging - particularly Asian - economies that as a result are themselves becoming major home countries of FDI; increasing south-south FDI flows and steep growth in natural resource-related FDI driven by high prices of mineral commodities.

As the Report underlines in its focused second part, this latter trend offers a tremendous opportunity for development and poverty reduction given that vast mineral reserves are located in some of the world's poorest countries, notably in Africa. In 2006, the continent attracted twice the level of FDI in 2004, mainly due to the attraction of its natural resources. In a number of low-income countries, investment in extractive industries holds a dominant share of overall FDI inflows.

The Report, however, makes it equally clear that even a favourable price environment does not automatically guarantee sustainable development benefits from extractive industries. We underline its important conclusion that host countries bear the main responsibility for ensuring greater and more equitable economic gains from resource extraction, as well as for managing its other - social, environmental and political – impacts, and that the quality of national governance, policies and institutions is a determining factor in this respect. At the same time, other stakeholders, including investing TNCs themselves, should strive to contribute their part and we welcome the recommendations the report makes in that regard. The EU shares the view expressed on the potential value of voluntary international initiatives aimed at promoting transparent, corruption-free, responsible and equitable management of natural resources, such as the Extractive Industries Transparency Initiative (EITI). In the Joint EU-Africa Strategy agreed at the recent EU-Africa Summit, the leaders from both groups of countries have pledged to enhance cooperation in promoting EITI and we believe that there is a role for UNCTAD in supporting efforts to get more countries and companies to implement these standards.

The importance of FDI as a source of finance for development is growing. Given its expertise on investment, this is an area where UNCTAD should focus its contribution to the broader debate in the context of the follow-up to the Monterrey Consensus. The trends identified in the note provided to us for this session present much substance for further work. We look forward to the World Investment Report 2008 and its analysis of the specific development opportunities and challenges related to FDI in infrastructure.

While FDI plays an increasing role in complementing domestic resource mobilization for development, we recognize that development aid and other external flows remain essential, particularly in the poorest countries with limited locational advantages for attracting FDI. In terms of synergies between ODA and FDI, a key dimension is how to harness ODA to create conditions conducive to increased and sustained private investment flows.

III. Item 4: Reports of expert meetings and of intergovernmental groups of experts:

a) Expert meeting on development implications of international investment rule making

With respect to the expert meeting on development implications of international investment rule-making, the report of the discussions (TD/B/COM.2/EM.21/3) reflects the scope of work that remains to be done in this area in view of the constantly evolving and increasingly complex universe of International Investment Agreements (IIAs). In our view, it also confirms the relevance of the idea to establish a standing expert group on relevant issues related to international investment protection legislation, for which the EU has previously expressed its support.

b) Expert meeting on comparing best practices for creating an environment conducive to maximizing development benefits, economic growth and investment in developing countries and countries with economies in transition

The Report of the expert meeting on best practices for creating an environment conducive to maximizing development benefits, economic growth and investment (TD/B/COM.2/EM.22/3) demonstrates that this was a well-prepared meeting where participants were consequently able to contribute in a concrete and direct manner to the research and analytical work of the secretariat. As mentioned earlier in relation to the G8 2007 Summit Declaration, the EU is eager to be briefed by the secretariat on the progress of its best-practice project, including the related partnerships and cooperation with other relevant organizations.

c) Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting, twenty-fourth session

We have read with interest the report of the twenty-fourth session of the Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (TD/B/COM.2/ISAR/43) and can endorse in full the conclusions agreed at its twenty-fourth session (TD/B/COM.2/ISAR/L.9), including regarding the dissemination of the guidance on corporate social responsibility indicators as a voluntary technical tool for enterprises. The EU also reiterates its general support for the work of this Group, not least as a noteworthy example of effective partnership with the private sector in pursuit of development goals. We hope that in the future more UNCTAD initiatives achieve similar success in engaging the business community.

d) Intergovernmental Group of Experts on Competition Law and Policy, eighth session

Finally, under item 4 we also take note with appreciation of the report and the agreed conclusions of the eighth session of the Intergovernmental Group of Experts on Competition Law and Policy (TD/B/COM.2/CLP/63). The Group is a central forum for multilateral cooperation on competition policy matters which we would like to see develop further. We welcome the continuation of voluntary peer reviews on competition law and policy as a useful tool for exchange of experience and mutual learning. In the work on examining the relation between competition and intellectual property rights it is important to actively involve WIPO as the specialized UN agency in the latter area.

IV. Item 5: Implementation of the recommendations of the Commission, including an assessment of the work of the Commission, since UNCTAD XI

In view of UNCTAD XII and our effort to make UNCTAD more effective and efficient institutionally, the EU will pay careful attention to item 5 of our agenda, particularly the assessment part, as we have done with respect to the other two Commissions. The Progress Report submitted to the Commission (TD/B/COM.2/81) contains valuable information on the multiple activities undertaken over the last year and indeed since the last conference, however, we would have appreciated if the secretariat, as part of its self-assessment, elaborated more on the quality of the outputs and the actual impacts these have had. We invite the secretariat to comment in more detail on these aspects in its additional oral briefing foreseen for this session. We would also like to hear about the main challenges encountered in discharging the relevant parts of the Sấo Paulo mandate and subsequent recommendations of this Commission, and about efforts to create synergies across the work of the Division on Investment, Technology and Enterprise development, as well as between its work and that of the other divisions. We have a list of more specific questions but I will leave those for after the briefing.

V. Other business

Finally, we will listen with interest to the briefing by WAIPA on its cooperation with UNCTAD over the last year.

This concludes my initial statement. Let me reiterate, Mr. Chairman, that the EU stands ready to engage in an open discussion with our partners during these two days, under your able guidance. Thank you for your attention.


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Date: 12.02.2008