Belgium-Development Finance

Action point 10

Belgium commits itself to integrating the criteria of the UNGPs and of the corporate social responsibility in the strategy to support the development of the local private sector of Belgium cooperation (Page 33)

La Belgique s’engage à intégrer des critères « droits de l’Homme » et de Responsabilité sociétale des entreprises (RSE) dans la stratégie d’appui au développement du secteur privé local de la coopération belge

The new law of March 2013 related to Belgian development cooperation attributes a more important role to the cooperation in view of supporting the private sector in the developing country. One strategic note, entitled “The Belgian Development Cooperation and the Local Private Sector: The Support of Sustainable and Human Development”, was formulated in April 2014.

From now on, and primarily in the sectors of agriculture, basic services, and infrastructure directly pertinent for the development of enterprises and of projects that can contribute to the fight against climate change, the Belgian development cooperation will specifically:

  • Reinforce the capacities of public institutions of developing countries who are charged to create a favourable framework for the development of the private sector;
  • Improve the access to financing for the micro, small, and middle-size enterprises (MPME);
  • Reinforce the capacities of business people of micro, small, and middle-size enterprises;
  • Promote equitable and durable commerce in order to support the social economy and favour socially responsible businesses.

This strategy, which applies itself to the actions of businesses in the 14 priority countries of the governmental cooperation but also in the 52 countries of intervention of non-governmental actors and of the Belgian Society of Investment for Developing Countries (BIO), insists as well on the importance of coordination and synergies to developed and on the coherence of the policies put in place as well as on a follow-up for rigorous actions supported.

The principal, specialised actors in support of the local private sector are the Belgian Society of Investment for Developing Countries (BIO) and the Trade for Development Center (TDC).

The corporate social impact purpose of BIO is to invest, directly or indirectly, in the development of micro, small, and middle-size enterprises (MPME) and social economy enterprises situated in developing countries with the interest of economic and social progress of these countries all while assuring sufficient return. At the same time, BIO also has the corporate purpose to invest in energy projects and projects that contribute to the fight against climate change in developing countries as well as in companies whose purpose is to provide basic services to the populations of developing countries. In addition, through its Support Fund for Micro, Small, and Middle-Sized Enterprises (MSME Support Fund), BIO can grant subsidies to co-finance support programs.

The TDC, meanwhile, aims to improve market access for producers and entrepreneurs in the South through direct support to local producer organizations, local businesses, or local professional organizers as well as to develop expertise on the themes of fair and sustainable trade in order to put in place the appropriate awareness and knowledge transfer strategies=

Federal Government Action:

Both the management contract between the Belgian state and BIO, which began in effect for five years in April 2014, and the 2014-2017 Convention for the Implementation of the Trade for Development Centre signed between the Belgian state and Belgian technical cooperation, provides that all development interventions of the local private sector must adhere to certain principles of intervention. Among these principles, in addition to the criteria of “classic” development, are in particular the respect of social, environmental, and good governance aspects. These two legal tools also provide for reporting requirements to monitor and evaluate compliance with these principles.

The annual report sent by BIO will henceforth be systematically the subject of a specific meeting of the Concertation Committee DGD/BIO before June 30th with a management contract in place that links the granting of additional financial means by the Belgian state with respect to BIO in particular for its reporting obligations. The Concertation Committee DGD/BIO will meet quarterly and will mainly ensure the proper implementation of the Management Contract.

The TDC will annually transmit a narrative and financial report, discussed in the Monitoring Committee (CTB-TDC/DGD), to certify the conformity of actions in particular to the principles of intervention outlined in the implementation agreement. The Monitoring Committee will meet every six months mainly to take stock of the monitoring efforts of the TDC Programme.