COOPERATION WITH THE PRIVATE SECTOR

It is with this in mind that the for­ma­tion of a clos­er rela­tion­ship between Luxembourg’s Devel­op­ment Coop­er­a­tion and pri­vate sec­tor oper­a­tors con­tin­ues to be encour­aged, with the spe­cif­ic aim of iden­ti­fy­ing inno­v­a­tive solu­tions and mak­ing them avail­able to help achieve devel­op­ment objec­tives in devel­op­ing coun­tries. All the ini­tia­tives in this frame­work place a cen­tral focus on the respon­si­ble con­duct of busi­ness­es in rela­tion to human rights and com­pli­ance with envi­ron­men­tal cri­te­ria, as well as the prin­ci­ple of untied aid.

In 2023 the Direc­torate for Devel­op­ment Coop­er­a­tion and Human­i­tar­i­an Affairs launched a new glob­al project that includes three co-financ­ing instru­ments, tar­get­ing com­pa­nies at dif­fer­ent stages of matu­ri­ty, which offer solu­tions aimed at achiev­ing the SDGs more quick­ly. The first instru­ment, the Lux­Aid Chal­lenge Fund, tar­gets new, inno­v­a­tive and high-impact com­pa­nies that offer solu­tions to a spe­cif­ic devel­op­ment chal­lenge iden­ti­fied in one of Lux­em­bourg Devel­op­ment Cooperation’s part­ner coun­tries. A first call for this instru­ment was launched at the end of 2023 simul­ta­ne­ous­ly in Sene­gal, Mali and Burk­i­na Faso, tar­get­ing inno­v­a­tive young com­pa­nies in the fields of food secu­ri­ty and dis­tance learning.

The sec­ond instru­ment, the Lux­Aid Demon­stra­tion Fund, tar­gets busi­ness­es in three pilot coun­tries: Sene­gal, Rwan­da and Koso­vo. This instru­ment is aimed at more mature busi­ness­es and focus­es on scal­ing up an inno­v­a­tive solu­tion that has been test­ed on a small­er scale and whose impact has been proven. A first selec­tion of three busi­ness­es took place in 2023, in Rwan­da, in the fields of alter­na­tive pro­tein pro­duc­tion, land regen­er­a­tion and agro­forestry. Final­ly, under the Busi­ness Part­ner­ship Facil­i­ty, an instru­ment which has exist­ed since 2016 and which encour­ages part­ner­ships between Lux­em­bourg busi­ness­es and busi­ness­es in devel­op­ing coun­tries, there were two calls for projects in 2023 and eight projects were financed. The fields involved includ­ed car­bon cred­its, con­nec­tiv­i­ty, phar­ma­ceu­ti­cal logis­tics and media development.

It should be not­ed that busi­ness due dili­gence plays a cen­tral role in the financ­ing of these projects; the out­comes of the inter­ven­tions and the award of funds are con­di­tion­al on spe­cif­ic com­mit­ments relat­ing to respect for human rights and envi­ron­men­tal cri­te­ria. In that con­text, dia­logue con­tin­ued in 2023 with the Lux­em­bourg nation­al con­tact point for the OECD Guide­lines for Multi­na­tion­al Enter­pris­es, which also sup­port­ed LuxDev to imple­ment an ambi­tious approach in terms of due dili­gence in these new instru­ments. In gen­er­al, the Direc­torate for Devel­op­ment Coop­er­a­tion and Human­i­tar­i­an Affairs has con­tin­ued to fol­low the work of the ​“Enter­pris­es and Human Rights” work­ing group, respon­si­ble for imple­ment­ing and mon­i­tor­ing the sec­ond nation­al action plan on busi­ness and human rights (2^nd NAP).

In addi­tion, on 1 June 2023 Lux­em­bourg signed the Joint Dec­la­ra­tion on Liv­ing Income and Liv­ing Wages, togeth­er with the Nether­lands, Ger­many and Bel­gium. The dec­la­ra­tion pro­pos­es a num­ber of spe­cif­ic actions such as dia­logue between con­sumer and pro­duc­er coun­tries on ade­quate wages and min­i­mum incomes, sup­port for the Inter­na­tion­al Labour Orga­ni­za­tion (ILO) to devel­op inter­na­tion­al def­i­n­i­tions and indi­ca­tors, and sup­port for social dia­logue in devel­op­ing countries.

Mul­ti­lat­er­al­ly, in 2023 Luxembourg’s Devel­op­ment Coop­er­a­tion has con­tin­ued to sup­port the Enhanced Inte­grat­ed Frame­work (EIF), a mul­ti-donor pro­gramme in the field of assis­tance for trade, direct­ly linked to the World Trade Orga­ni­za­tion (WTO). The pro­gramme aims to pro­vide spe­cif­ic sup­port to the least devel­oped coun­tries to enable them to play a more active role in the glob­al trade system.