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Ireland's political and cultural magazine
78 February 2015
Careful
with that
private
nance
Pressure intensifies on
Irish Aid to engage the
private sector more
pro-actively.
By Lorna Gold
I
T was the vision of Garret FitzGerald,
as Minister for Foreign Affairs, which
led to the establishment of an offi-
cial Irish aid programme for Africa and
the developing world 40 years ago, in
the early years of our membership of
the EEC. For a generation it generally
increased – until this recession. 2014
was the first time in six years that there
was no reduction at all in Ireland’s
Overseas Development Aid (ODA). This
year the budget will be €600m, 80%
of it to be spent in sub-Saharan Africa.
20% of the overall budget goes on fight-
ing hunger. In 2014 Ireland also spent
€68 million on humanitarian support to
crises, especially in West Africa, Syria,
South Sudan; and ebola-ravaged Sierra
Leone. Although, worldwide, extreme
poverty has been cut in half since 1990
and 17,000 fewer children die each day,
one in nine people remains hungry.
Recently a voguish blending of pub-
lic and private finance has become a key
trend in international development and
its aid. A side effect of the global finan-
cial crisis – as the availability of, and
ideological commitment to, the provi-
sion of international public finance has
decreased – is dramatic growth in the
portion of aid being delivered via private
or semi-private profit-making entities.
Official Development Aid (ODA) now
makes up only 27% of financial flows to
developing countries (down from 44%
in 2008). Private finance now make
up 65% of external resources going to
developing countries, worldwide.
In practice formerly ‘like-minded’
donors, mainly the Nordic countries,
have been moving away from the prin-
ciples of poverty-focused aid. These
countries have gradually gone in a pro-
business direction for aid systems and
delivery.
Ireland, until now, has bucked this
trend with an exemplary focus on the very
poorest. The recent OECD Development
Assistance Committee (DAC) Peer Review
of Irish Aid commends the country on its
high-quality, poverty-focused, 100%
grant-based aid programme.
However, Development minister,
Seán Sherlock, says the focus of the
programme is on “inclusive economic
growth”. Perhaps reflecting the focus on
economy, there are escalating pressures
on Irish Aid, from within Government
and externally, to modify its attitude
to the private sector, and to engage the
private sector more pro-actively in the
development aid effort. In the space of a
few years we have seen the publication of
the Africa Strategy by the Government
and the rollout of a new approach to the
engagement of Irish business in Africa.
The trade promotion portfolio has been
shifted into the Department of Foreign
Affairs and this is now strongly reflected
in the new foreign policy statement.
The Minister of State for International
Development and Human Rights has
become the Minister for ‘International
Development and Trade’.
There are potential merits in the com-
bining of these portfolios, particularly
when it comes to promoting integra-
tion of policy. However, the DAC Peer
Review finds the approach deficient. It
specifically points to the dangers of an
unclarified focus on ‘synergies’ when
there may be policy conflicts.
If it is accepted that the trend of pri-
vate engagement in international
development will continue, then it is
critical that there is an overriding ‘do
no harm’ policy. A key test is what role
will be afforded business entities in the
realisation of human rights.
The consultation on a National Action
Plan (NAP) for Ireland on the imple-
mentation of the Ruggie Principles
on Business and Human Rights (a UN
Framework) was launched at last year’s
NGO Human Rights Forum. The Human
Rights Unit of the Department of Foreign
Affairs is leading this and has started
consultations.
The NAP, if it is to meaningful and
effective, needs to address a broad
range of policies relating to business and
human rights focusing on Government
as a whole, not isolated departments.
Trócaire’s submission to the NAP sets
out seventeen measures which need to
be taken for the NAP to be comprehen-
sive and in line with international best
practice (www.trocaire.org). It needs,
for example, to embed the principle of
‘extra-territoriality’, giving the state the
power to protect against human rights
abuses committed by their companies
abroad.
Furthermore, building on the incip-
ient reality of a state-business nexus,
the Government needs to focus on those
businesses where it has most influence.
Companies that are looking to get stuck
into our foreign, trade and particularly
our overseas-aid policy provide a good
initial focus for the implementation of
the NAP. As the UN framework says,
“The closer a business enterprise is to
the State…The stronger the State’s pol-
icy rationale becomes for ensuring that
the enterprise respects human rights”.
Human-rights due-diligence procedures
should be required within these compa-
nies – if we are to stay focused on the end,
rather than the means. •
Lorna Gold is Head of Policy and Advocacy
for Trócaire
INTERNATIONAL AID
Official
Development
Aid (ODA)
now makes up
only 27% of
financial flows
to developing
countries
(down from
44% in 2008)
“
