On the occasion of the second session of the Working Party on Public Private Partnerships (PPPs), held in Geneva on 20-21 November 2018, UNECE launched the International PPP Dialogue for Belt and Road (BRI) countries. The session was organized under the auspices of the Memorandum of Understanding signed between UNECE and the National Development and Reform Commission (NDRC) of the People‘s Republic of China in May 2017.
While the precise details for follow-up activities are still to be fully worked out, the Dialogue would work as a mechanism enabling countries to determine precisely their own wishes as well as ensure that economic impacts would fall more equitably, thereby allowing business opportunities for both local and foreign businesses alike. The environmental sustainability of BRI projects would be another major focus of this multilateral approach, which, it is hoped, will also catalyze the implementation of projects which are socially beneficial and aligned with international labour standards.
This second session of the Working Party on PPPs was also the opportunity for participants to discuss the ways PPPs can be made fit for purpose to implement the 2030 Agenda for Sustainable Development. In view of the funding gaps identified to finance the huge investments in infrastructure needed to meet the Sustainable Development Goals (SDGs), UNECE is launching a call for 10 Flagship ‘People-first’ PPP projects.
Member States discussed the mechanisms by which these projects could be submitted as well as the nature of the projects themselves. Overall, there was a consensus that:
- Member States would be invited to submit projects to the UNECE secretariat;
- Projects would cover large scale cross-border infrastructure but also include smaller scale social projects, ‘people-to-people’ projects supporting SMEs and projects that do good to the environment;
- Selection would be undertaken using an Evaluation Methodology for People-first projects – such a methodology could set useful benchmarks for bankers in their own lending strategies; and
- Project ideas submitted would be turned into bankable projects and turned over to the Multilateral Development Banks and other lenders.
A wider debate took place during the session on whether PPPs can contribute to creating jobs and eradicating poverty. A rather robust debate took place on the model itself: one NGO argued that PPP was not the solution and that experiences showed its weaknesses to contribute to development. Speaking about these weaknesses, Mr. Philip Alston, the UN Special Rapporteur on extreme poverty and human rights, argued that, although the Guiding Principles on People-first PPPs are aligned with the SDGs, they should also refer to Governments’ human rights obligations and international human right standards and include accountability mechanisms to ensure compliance by private companies.
Another focus of the discussion was the extent to which PPP was the same as privatization; a few arguing that it was; but the vast majority of Governments arguing that it was important to distinguish between privatization and PPPs as they have inherently different characteristics and outcomes, the fundamental difference being that in the case of privatization, the Government divests assets, whereas in the case of PPP, it acquires services, which leads to different forms of contracts and governance. PPP, unlike privatization, it was further argued, gives the public sector the power to design and structure the projects and to ensure that the necessary social and environmental outcomes are achieved.
Indeed, some Governments indicated that they were already incorporating such an approach into their new legislation through community and social programmes that could overcome the weaknesses and failures of the past and serve as the foundations for SDG compliance. The Welsh Government, for instance, announced the launch of its ‘Community Benefits Programme’ which incorporates wellbeing objectives in PPPs in the transport sector, and offered to host an event in Cardiff to showcase these new People-first projects.
Further editions of the PPP dialogues to inter alia review the Flagship project development process and the overall ‘rules of the game’ underpinning the BRI will be organised in consultation with the member States.
The meeting attracted over 220 participants from 65 countries demonstrating wide-scale interest, with representatives from 42 Member States, specialized agencies and intergovernmental organizations (such as UNEP and UNCTAD), Multilateral Development Banks (EBRD and the World Bank), non-governmental organizations, private sector entities and academic institutions.