STUDY ON THE CONTRIBUTION OF MAJOR INFRASTRUCTURE PROJECTS TO LOCAL ECONOMIC AND SOCIAL DEVELOPMENT

In connection with the Santiago office of the International Labour Organisation (ILO), the Observatoire Social International conducted a study on the contribution of major infrastructure projects to local social and economic development. Alejandro Jara Weitzmann, the OSI’s representative in Latin America and Marc Deluzet, Senior OSI Officer tell us about the main benefits and findings.

 

What were the initial objectives of the study?

Alejandro Jara Weitzmann : In autumn 2014, the Head of the ILO office in Santiago asked the OSI to study how major investment projects (dams, power generation, motorways, airports, etc.) contributed to the local development of the regions in which they take place. He wanted to establish an objective basis on which to build a social dialogue capable of anticipating the potential risks of these investments for the local population, but without blocking their implementation.

Marc Deluzet: In recent years, several major infrastructure projects, such as dams in Latin America, have triggered large-scale action aimed quite legitimately at asserting the rights of local
people and highlighting environmental imperatives. However, led by large international NGOs, these movements have led to global campaigns, creating an opposition which too often forgets the important contribution that these projects can make to the country’s economic and social development in terms of access to energy, employment skills and economic fabric, not to mention the fact that the government had decided to proceed and already awarded contracts. That is why the study aims to not only assess the risks of major industrial investment projects, but also their contribution.

 

The study compares and reviews the different criteria of international standards for evaluating investment. How do the OSI’s proposals fit into this international offering?

AJ: We conducted a comprehensive review of the ten evaluation systems of the main international organisations and agencies, from the World Bank and the International Monetary Fund to the
European Union, as well as the World Business Council for Sustainable Development (WBCSD) and the OECD. This study enabled us to validate the intuitions of the OSI and ILO Santiago: the latest methods go beyond simply assessing the risks (possible negative impacts) of investment projects, and now take into account all of their positive contributions to local development. They also combine monitoring of indicators with reporting systems and social dialogue throughout the project’s development, both prior to and following construction.
The proposals in the OSI study are part of this logic, which considers the social benefit of an investment to lie first and foremost in its economic and social purpose; a purpose that should be discussed with all local parties from the outset.

MD: That is why the study proposes to initiate social dialogue at the very early stages of the project, with all the parties involved (public authorities, investors, local people and civil society) before the decision to entrust an investor with the preliminary studies prior to contracting.
The aim is to prevent objections only arising after contracts have been awarded, making things difficult for companies and the local communities who will actually benefit from the investment in terms of local economic development.

 

What is the next step for making these proposals a reality?

AJ: In Chile and more generally in Latin America, several companies already naturally adhere to this logic (see Insert). And others are interested. We intend to expand this base to all the stakeholders that have decided to implement these principles in connection with the ILO. 

MD: More broadly, these questions also apply to other continents, particularly Africa. Again, we will cooperate with the ILO’s global headquarters in Geneva so that this outlook can become a reality.