Trade and investment policies and agreements are central to an enabling policy environment that drives, supports, and promotes responsible business practices. They can help raise‑awareness on RBC and encourage companies engaged in trade and investment to adopt responsible practices. They can also contribute to the development, strengthening, and implementation of legal and policy frameworks in areas covered by the MNE Guidelines, such as human and labour rights, the environment, or anti-corruption, which are at the core of an enabling environment for RBC. As such, trade and investment policies and agreements constitute a lever to ensure that businesses’ activities are aligned with the expectations and needs of people, planet, and society.
In the MENA+T region, governments have taken initial steps towards using their trade and investment policies and agreements to leverage responsible business practices. The analysis undertaken for this report reveals that MENA+T Programme Countries have recently started incorporating RBC considerations into these policies and agreements. Overarching trade and investment promotion strategies and laws in the region progressively include a sustainability angle, setting the ground for using government action in these fields to promote RBC. Most MENA+T TPAs and IPAs have begun integrating RBC considerations in some aspects of their functioning and a number of their services. Trade and investment agreements concluded by MENA+T Programme Countries also show a steady increase over time of the inclusion of provisions relevant for RBC, with a clear acceleration in recent years. The majority of newly signed agreements integrate some type of sustainability provisions, and RBC clauses are progressively becoming more common, often going beyond merely encouraging the adoption of responsible business practices to establish binding obligations for investors.
However, additional action could be taken to further mainstream RBC in trade and investment policies and agreements in the MENA+T region, as their potential for promoting RBC remains largely untapped. Although approaches vary, overall MENA+T Programme Countries do not have a structured strategy around the promotion of RBC by the government in general or by the entities responsible for trade and investment more specifically. When overarching trade and investment promotion and facilitation policies include a sustainability angle, they do so in a general fashion and seldom refer explicitly to RBC or the conduct of due diligence. Efforts to use the tools and support activities developed in the context of trade and investment promotion and facilitation to promote RBC among exporters and investors are still recent and limited. MENA+T TPAs and IPAs have yet to fully leverage their services to encourage responsible business practices. Likewise, the number of trade and investment agreements signed by MENA+T Programme Countries including RBC considerations remains quite low in comparison with other regions and, at the time of writing, concrete examples of implementation of sustainability provisions and RBC clauses were rare.
Building on the initial steps taken this far, there is thus ample opportunity to further promote RBC through trade and investment policies and agreements in the MENA+T region. This is key to encourage local exporters to adopt an RBC approach as well as to attract responsible investors and thereby harness trade and investment not only as drivers for growth, but also vehicles for inclusive and sustainable development, in line with people and planet’s needs and society’s expectations.
MENA+T Programme NCPs are well positioned to support their governments in this endeavour. All located within government entities with competencies related to trade or investment, they can serve as a bridge between RBC expertise and trade and investment policymaking and negotiations. Their recent initiatives to share relevant information, engage, and co‑operate with trade and investment officials constitute valuable efforts in this regard. Their potential is nevertheless constrained by structural challenges, including low awareness and limited technical capacity regarding RBC among relevant government entities, weak co‑ordination across government, as well as insufficient NCP resources. Addressing progressively these challenges is important to unlock the possibility that the NCPs of the region have to support government efforts in promoting policy coherence for RBC. Moving ahead, the following actions could therefore be considered in order to further leverage trade and investment policies and agreements to encourage RBC in the MENA+T region:
MENA+T Programme Countries could strengthen the awareness and understanding of RBC and the OECD RBC instruments of government officials in charge of trade and investment matters. Particular attention could be given to the OECD Recommendation on the Role of Government in Promoting RBC, and the principles pertaining to trade and investment, in order to raise the knowledge of relevant officials of the role they can play in promoting RBC.
With the support of their NCPs, MENA+T Programme Countries could build the technical capacity of trade and investment officials on RBC. This could include general trainings on the different aspects of RBC, as well as more specific ones on risk-based due diligence in sectors of economic relevance. Capacity-building activities on the role of governments in promoting RBC and the manners in which responsible business practices can be encouraged through trade and investment policies and agreements could also be envisaged.
Based on recent experience, MENA+T Programme Countries could consolidate the engagement, co‑ordination and co‑operation among officials responsible for trade and investment and their NCPs, while guaranteeing NCP autonomy and impartiality. Existing information-sharing initiatives could be systematised to further open channels of communication and promote exchanges on relevant issues. Additional actions could also be taken to create lasting co‑operation mechanisms with a view to enhancing NCP consultation or participation in trade and investment policymaking and negotiations.
MENA+T Programme Countries could reflect upon ways and means to allow their NCPs to play a greater role with respect to policy coherence for RBC so that NCPs can further support government efforts to develop, implement, and foster the coherence of relevant policies. This could imply, for instance, giving NCPs more visibility across government, reaffirming their role among other government entities, or inviting them to take part in relevant cross-government initiatives and mechanisms, in particular with respect to trade and investment.
In light of relevant initiatives in other regions, MENA+T Programme Countries and NCPs could engage with peers to exchange information and experience and build on lessons learnt in promoting RBC through trade and investment policies and agreements across the world. Such a cross-regional dialogue and peer-learning could, in particular, support the implementation of existing measures, but also inspire future action aimed at encouraging exporters and investors to adopt responsible business practices.
The OECD stands ready to support MENA+T Programme Countries in taking action in each of these directions. Future regional or country-specific activities could provide tailored assistance to further harnessing trade and investment policies and agreements to promote RBC in the MENA+T region.