OECD INVESTMENT POLICY REVIEW COLOMBIA 25 April 2012, Barranquilla
Highlights of the IPR• The role of FDI in Colombia’s economic development• Colombia’s adherence to the OECD Declaration on International Investment• Colombia and the OECD National Treatment Instrument• Colombia and the OECD Guidelines for MNEs• Colombia’s Policy Framework for Investment (PFI)• Investment Framework for Green Growth
FDI in Colombia• 4-year National Development Plan has FDI target - USD 13 billion in 2014• Main sectors: Oil (24%), Mining & quarrying (21%), Manufacturing (20%),financial services (13%);• Main sources: USA (23% of stock); Panama (12%), Spain (11%);• Privatisation contributed to a significant increase in private investment;• Government aims to increase impact on jobs and infrastructure.
Colombia’s adherence to the OECD Declaration on International Investment• Colombia is the 43rd adherent to the OECD Declaration on International Investment and Multinational Enterprises;• Supports an open investment environment & encourages responsible investment by MNEs;• Commitment to treat foreign and domestic investors equally and to promote responsible business conduct;• Colombia benefits from similar assurance from adherents to treat its investors abroad fairly – relevant given the increase in OFDI;• Adherents encourage their MNEs to operate responsibly in Colombia;• Establishment by Colombia of a National Contact Point responsible for promoting observance of the OECD Guidelines for Multinational Enterprises;• Strong stakeholder support for reform process.
Findings from the IPR: The National Treatment Instrument (NTI)• Non-discrimination & equal treatment of investors embodied in Colombia’s Political Constitution (1991), national treatment and MFN in recent FTAs;• Limited number of restrictions, and no trans-sectoral exceptions to NT, some sectoral limitations (television broadcasting and fisheries);• Notable openness in transport, telecoms & financial services, foreign investors have equal access to government procurement, no exceptions to NT for official aids, subsidies or tax matters;• Some measures – for security reasons (eg landownership in border areas, private security services) and generally in some sectors (some media, public monopolies in production, import & export of liquors, gambling) - to be notified for transparency.
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Responsible Business Conduct policies – MNE Guidelines• No explicit RBC policy but numerous initiatives: corporate tools & guidance, more companies taking CR measures in labour & environment; Government has adopted a National Policy on Integrated Human Rights & Humanitarian Law (2011), ratified 60 ILO Conventions;• Measures to tackle informality & unemployment (Law on Formalising Labour and Employment Generation, 2010), to encourage collective bargaining, to strengthen workers’ protection (Public Safety Act ,2011);• Party to all major environmental agreements (incl. UNFCCC, Kyoto), environmental licensing ;• Anti-corruption steps include the Anti-Corruption Statute (2011) – in November 2011 the OECD Council invited Colombia to participate in the OECD Working Group on Bribery and its accession to the OECD Convention on Combating Bribery;• Colombia will establish a National Contact Point (in MTIT) to oversee the application of the MNE Guidelines – part of commitment to Declaration.
Colombia’s Policy Framework for Investment (PFI) Party to ICSID, no case of investor-state dispute Domestic legislation at times stricter than WTO requirementsImproved regulatory FW, quality of feasibilitystudies, pricing certainty, bidding conditions Concluded 8 bilateral IIAs since 2005 • Investment Policy • Investment Promotion & Facilitation • Trade Policy • Infrastructure No complaints from investors and all investment incentives are Colombia is a top-ten granted to domestic & foreign investors alike business reformer globally
Investment Framework for Green Growth• Commitment to ensure economic growth and environmental protection are mutually supportive;• Measures include: – strengthening the capacity of environmental authorities - creation of the Ministry of Environment and Sustainable Development & co-ordinating mechanisms); – “green” investment incentives; – promoting sustainable use of Colombia’s biodiversity;• Good use of CDM (total of 154 approved projects);• Low Carbon Development Strategy – promote growth in sectors with lower greenhouse emissions;• LCDS seeks to tap new financing options, transfer of clean technologies and incentives for voluntary corporate environmental performance improvements.