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The pursuit of gender equality: How to win an uphill battle?

12 October 2017
by Guest author

Valerie Frey, OECD Directorate for Employment, Labour and Social Affairs

Though there has been progress, gender equality is still a long way off. That is the key message in our latest report, The Pursuit of Gender Equality: An Uphill Battle, released 4 October. As I write in this OECD Observer article, policies are changing for the better, but much more improvement is needed to close gender gaps in all areas of social and economic life. No country is immune. The challenges are varied: more women should be encouraged to study science, technology, engineering, and mathematics (STEM), for instance, and more men should be encouraged to do their fair share of unpaid caregiving. Women should be better represented as entrepreneurs, in public life, and at the highest levels of the private sector.

There’s a lot to do, but we believe there is cause for optimism. Many countries now understand the importance of fathers in caregiving roles, for example, and now offer paid paternity and parental leave for dads for the time around childbirth. Fathers’ caregiving is crucial for reducing women’s unpaid work obligations and freeing them up to reach their full potential in society and in the economy. Women in the labour force still earn nearly 15% less than their male counterparts in every OECD country, but about two-thirds of OECD countries have introduced new pay equity policies since 2013. Pay transparency tools are being adopted to help nudge more employers towards equal pay between women and men.

But perhaps looming above all these issues is the imperative of preventing and ending violence against women. In fact, our survey data show that violence against women is widely reported by governments as the most urgent gender equality issue among countries adhering to the OECD Gender Recommendations (see chart). Anti-harassment laws are being introduced or reinforced in several countries, and awareness-raising campaigns about sexual harassment and its different manifestations have been launched, but more governments need to tackle violence against women with a multifaceted, whole-of-government approach. Violence affects multiple aspects of victims’ lives – including their education, employment, income, social protection, justice, security, and health – and must be targeted accordingly.

You can read about these issues in more detail in our new book. How can we win the uphill battle for gender equality? We’d love to hear your views on this important challenge.

References and links

Frey, Valerie (2017), More effort needed to make the grade on gender equality, OECD Observer, http://oe.cd/24r

OECD (2017), The Pursuit of Gender Equality: An Uphill Battle, OECD Publishing, Paris.
http://dx.doi.org/10.1787/9789264281318-en

OECD (2016), 2015 OECD Recommendation of the Council on Gender Equality in Public Life, OECD Publishing, Paris.
http://dx.doi.org/10.1787/9789264252820-en

OECD (2017), 2013 OECD Recommendation of the Council on Gender Equality in Education, Employment and Entrepreneurship, OECD Publishing, Paris.
http://dx.doi.org/10.1787/9789264279391-en

Girls’ leadership matters!

11 October 2017
by Guest author

On 2017 International Day of the Girl, 18-year-old Alda from Indonesia took over as secretary-general of the OECD for a day. A youth activist for Plan International, Alda also found time to write a blog about what life is like for girls in her country. She says that teen pregnancy, child marriage and gender discrimination are the everyday reality for too many girls. Statistics show that more women than men do not know how to read or write. In Indonesia, education is the key to making girls’ lives better. Read Alda’s blog here.

Digital Economy Outlook 2017: What artificial intelligence really means for policy makers

11 October 2017
by Guest author

Wonki Min, Leading Professor, Department of Technology & Society, SUNY (The State University of New York) Korea, and Chair of the OECD Committee on Digital Economy Policy

In October 2016, “Westworld” topped the charts as the most-watched premiere season of an HBO original series ever. In the series, a science fiction thriller written and directed by novelist Michael Crichton based on a 1973 film of the same name, Anthony Hopkins takes on the role of Dr Ford, who creates a futuristic western-themed amusement park populated by android hosts to cater human guests, with Evan Rachel Wood playing the role of Dolores, the oldest android host working in the park. Further to the great script and the impressive casting, the success of the series is also undoubtedly linked to its timing. Just one year ago, Lee Sedol, 18-time world Go-board game champion, was beaten by DeepMind’s AlphaGo, which was a monumental breakthrough of Artificial Intelligence (AI).

Even before the AlphaGo’s victory over Lee Sedol, there was growing interest in the potential and risks of humanoid robots and of AI, led by the likes of Stephen Hawking and Elon Musk. While the debate remains open on whether, or when, it might be possible to develop the artificial intelligence of Westworld-type humanoid robots, the use of industrial robots (essentially motor functions) and the appearance of autonomous machines with cognitive-type functions have been growing rapidly and raise concerns about job displacements by automation in the manufacturing sectors, including for vehicles.

As countries and international communities grapple with this question and the consequences of the rapid diffusion of AI and industrial robots, the 2017 OECD Digital Economy Outlook takes a timely look at the potential benefits and opportunities offered by AI as it begins to take hold and slowly penetrate, if not disrupt and transform, our economies and societies.

Productivity gains could be achieved in areas ranging from factories to offices and service centres as a result of both the automation of activities previously carried out by people and machine autonomy whereby systems are able to operate and adapt to changing circumstances with no or little human control. But as AI and robotics replace or augment components of human labour in both skilled and unskilled jobs, policies will be required to facilitate professional transitions and to help workers of various backgrounds, ages and levels develop the skills needed to take full advantage of the digital transformation.

Skills are not the only challenge for policy makers to address, as this new report shows: we need to provide access and connectivity, measures to promote innovation, and policies to enhance digital security and trust. Indeed new questions of liability, responsibility, security and safety also come up, notably with respect to autonomous machines. AI-powered decisions that impact people raise questions of transparency and oversight, among other things to prevent algorithmic biases, discrimination and privacy abuses. There is some urgency to act on these policy fronts, since the data show this new revolution to be well under way.

Roughly 750 000 industrial robots were estimated operational in OECD countries in 2014, constituting more than 80% of world stocks. Among OECD countries, Japan, the US, Korea and Germany are the most “robotised” countries in the OECD and together account for almost 70% of the total number of operational robots. In terms of the adoption of industrial robots by sector, the use of industrial robots is the most highly concentrated in transport equipment with almost 45% of the total stock of robots, followed by electronic, electrical and optical equipment, with almost 30%. Rubber and plastics have lower concentration at less than 10% and metal products (5%).

As for the future, expect to see more and more industrial robots replacing human workers in manufacturing facilities along with collaborative robots like “Baxter” that co-work with human workforce and service robots like “Relay”, a robot waiter that delivers food and snacks to guest at Shinagawa Prince Hotel in Tokyo. With AI, expert and high-wage occupations will also be impacted.

In the meantime, the use of AI and industrial robots will no doubt bring new opportunities to raise incomes, create new types of jobs and businesses and improve economic and social well-being. But there will be costs and bumps along the way. It is up to policy makers to play their part by helping make the digital transformation beneficial for all.

References

OECD (2017), OECD Digital Economy Outlook 2017, OECD Publishing, Paris.
http://dx.doi.org/10.1787/9789264276284-en 

OECD (2017), The Next Production Revolution: Implications for Governments and Business, OECD Publishing, Paris.
http://dx.doi.org/10.1787/9789264271036-en 

Beer, conflict and compensation: Heineken-Congo agreement

15 September 2017

Roel Nieuwenkamp, Chair of the OECD Working Party on Responsible Business Conduct

Heineken’s agreement with Congolese workers sets excellent example of dispute settlement on responsible business conduct.

Doing business in conflict areas is challenging for everyone, whether you are talking about mining or even brewing beer. In 2015 a group of 168 former workers of Heineken’s subsidiary Bralima in the Democratic Republic of Congo submitted a complaint to the Dutch National Contact Point (NCP), a grievance mechanism set up under the OECD Guidelines for Multinational Enterprises, about the company’s conduct during the civil war in that country (1999-2003). The complaint concerned allegations of Bralima unjustly dismissing its workers and co-operating with the rebel movement in RCD-Goma, and the negative consequences this had for the firm’s workers and their families.

The complaint was successfully resolved recently. Details of the agreement between Heineken and the former Congolese workers, facilitated by the Dutch NCP, are confidential, but the overall outcome is public. All parties describe it as satisfactory and civil society even hailed it as “historic”.

This is good news. Heineken, their former workers and the Dutch NCP deserve praise for solving this highly complex corporate responsibility issue. Why?

One key reason lies in the fact that monetary compensation was awarded, according to reports. Although there have been many different sorts of remedy through the NCP system, monetary compensation has been rare.

Still, it is important to manage expectations. For a start, NCPs are a non-judicial grievance mechanism, meaning that the NCPs cannot legally enforce remedy. However, the NCP process can facilitate remedy, including compensation, as part of a mediation or conciliation process. NCPs can also recommend remedy, including financial compensation, in their final statements. The Heineken agreement illustrates that NCP processes are not exclusively forward-looking, but can also function retroactively.

Another reason why this is a historic agreement is that it shows that longstanding issues such as the Heineken case, that took place 15 years ago, can still be solved by an NCP process today. NCPs are known to get a lot of complex cases that often have already been in courts for years. This case demonstrates that even human rights issues that go back many years can still be solved if the conditions are in place.

The case is also a landmark because it shows that NCPs, when properly organised, can deal with human and labour rights issues in conflict areas. Indeed, Heineken has committed to improving its policy and practices on doing business in volatile and conflict-affected countries. Other companies should now follow Heineken’s example.

Make no mistake: a critical factor in this case was that Heineken and the complainants engaged fully and responsibly with the process. In many cases, using this problem-solving approach is more effective in addressing corporate responsibility issues than legalistic ones. Another reason for success was that the NCP was positioned to handle the case professionally. As the NCP is an adequately resourced, independent responsible business authority, which made it possible to be accessible and equitable towards all parties in a remote area ravaged by civil war. The mediation could rely on government support too, as it was facilitated by Dutch embassies in France and Uganda.

In short, several lessons on different levels can be drawn from the resolution of this business and human rights case. Above all, it should inspire other governments and NCPs, and businesses too. It shows that with the right mind-set, companies can successfully turn human rights issues into opportunities for improving corporate responsibility.

See also:

OECD Guidelines for Multinational Enterprises

Olivier van Beemen (2017), En RDC, une poignée d’ouvriers fait plier le géant Heineken, Le Monde

Olivier van Beemen (2017), Heineken betaalt Congolezen na klacht mensenrechtenschending, NRC

 

A portrait of family migration

1 August 2017
tags:
by Guest author

Jonathan Chaloff and Friedrich Poeschel, OECD Directorate for Employment, Labour and Social Affairs

© Shutterstock/Nowik Sylwia

Migration is all over the news in Europe, North America and Australia. When people think about migration, they tend to picture either refugees driven to undertake dangerous journeys in order to escape threatening situations or people coming to a new country to pursue studies or work. Yet there is a large category of migrants all too often overlooked: family migrants. Such migrants accounted for 40% of migration to the OECD area in 2015 and they typically make up 25-50% of an OECD country’s foreign-born population – and as much as 70% in the United States.

 

Why is family migration receiving so little attention? In part because family migration is often seen as a natural derivative of other categories of migration, one that takes place automatically based on international conventions and human rights. The lack of attention may also be due to the diversity of family migrants as a group: they migrate for various family-related reasons and have diverse demographic profiles. One family migrant may be an infant, moving with his or her parents or as part of an international adoption. Another may be a parent or grandparent, rejoining an adult migrant who moved to the destination country long ago. And there are also those who migrate to “follow their heart” – forming a family with a native-born partner (in many OECD countries, at least 10% of marriages are between a citizen and a foreigner), joining a partner who has already migrated or accompanying a spouse who is a labour migrant.

A closer look at family migrants does reveal some common characteristics, however. If family migrants are predominantly female, men typically comprise at least 40%. Family also tend to be younger than labour migrants, and are more likely to settle permanently in their new countries. Their education level tends to be related to that of their spouse, with those who come to join a citizen of the destination country, or who arrive together with a labour migrant, better educated, on average, than those who reunite with partners or marry a migrant later on. In most countries however the education of family migrants has been increasing recently. Once arrived, family migrants generally struggle to enter the labour market, taking 15 to 20 years, notably in Europe, to reach the same employment rate as native-born people. This may be due to the fact that family migrants do not come with a job offer in hand but also to family migrants’ often limited abilities in the host-country language.

What does this mean for governments and migrants alike? Whenever close family relationships are involved, stakes are high. It’s true that family migration levels can, to a certain extent, be anticipated more than other migration flows, and immigration authorities thus can be prepared to deal with them. And family ties are not automatic grounds for migration: in practice, family migration is subject to restrictions and requirements.But establishing the right mix of requirements is challenging and policy makers have to balance different priorities and constraints. How long should family migrants have to wait to be reunited? On the one hand, short waits accelerate the integration of children in schools and allow families to be together; on the other, longer waits may be needed to ensure income and housing requirements are met. Yet restrictions may make a country less attractive for sought-after labour migrants, who want to bring their families. And while language requirements and other conditions may effectively speed up the integration of family migrants, they may also delay or prevent it. Finally, what about migrants who are joining citizens to form a family? Should the same conditions apply to them?

With migration comes family! This is a simple fact of life and it is time to give family migration more attention. This may be a difficult area for policy makers, but it cannot be ignored. Further analysis of policy trade-offs and bottlenecks, as well as better data, will go a long way to providing a firm basis for future family migration policies.

Links and further reading

European Commission (2016), European Migration Network report on practices in family reunification

International Forum on Migration Statistics 2018

OECD work on migration

OECD webinar on migration (July 2017)

OECD (2017), A portrait of family migration in OECD countries (International Migration Outlook 2017)

OECD (2016), Family migration channels for refugees (International Migration Outlook 2016)

 

Beyond the numbers: The qualitative research behind our reports

20 July 2017

Tamara Krawchenko, Regional Development Policy Division, Centre for Entrepreneurship, SMEs, Local Development and Tourism

Brainstorming ideas at a public event in Prague (7 June 2016) that was held as part of our work on the Governance of Land Use in the Czech Republic.

The OECD is known for data and numbers. Indeed, providing high quality comparative indicators for better policy making is our bread and butter. But, what is less known is the extent to which we are a “listening” organisation, and how this improves the qualitative research that goes into our work. While the sources behind the OECD’s statistical data are critical, they become alive thanks to the rich opinions and experiences of real people.

Drawing on my own experiences conducting OECD reports I can say that they include rigorous qualitative data collection from unstructured or semi-structured interviews, focus groups and even public engagement events. In our work, we have the chance to meet a wide range of people at the local level—from farmers in Podlaskie in eastern Poland, to urban bike activists in Amsterdam and property developers in Prague—these local interviews give us data on the conditions that people experience, how institutions structure individual behaviour and how people would like to influence or change policy themselves. Experts from other countries also take part as peers to review our studies, providing another source of knowledge and policy learning.

At our public events we talk and listen to people from all backgrounds about the key challenges they face and we ask them for their ideas on how to improve everything from building approval processes to the quality of public space. In Prague, for instance, about 50 people from the community came out to speak with us one night. We took a hard look at the low levels of trust between community members, developers, and city officials and we brainstormed ways to rebuild it. In Amsterdam we had lively discussions about the redevelopment of disused brownfield sites within the city,  and their ambitions to embrace a “circular economy” in which materials would be reused or recycled rather than creating new goods or disposing of old ones. We heard about non-government organisations (NGOs) that have worked between developers and residents on big projects that have the potential to transform whole neighbourhoods. These in-depth discussions, which are all non-attributable, have nevertheless enriched our reports and even helped shape our arguments.

These encounters make a real difference to our work. While quantitative data gives a bird’s eye view and helps to monitor change over time, our research interviews provide context (including historical context) and help us better understand general trends, missing links and political debates. Interviews help us see how policy unfolds and where improvements can be made. They also give us insights into reform agendas and their implementation on the ground. Finally, they show us how different interests intersect and affect the policy-making process. Given the importance of this knowledge to our work, the OECD should be known for more than just numbers.

For more information about the OECD’s work on this topic see:
www.oecd.org/cfe/regional-policy/governance-of-land-use.htm 

 

 

 

 

 

State-owned enterprises, international investment and national security: The way forward

19 July 2017

Frédéric Wehrlé and Hans Christiansen, OECD Directorate for Financial and Enterprise Affairs

For most of the past half century, countries around the world have gradually opened up to foreign investment, and with good effect. Investment from other countries has supported growth and development, created jobs and enhanced welfare. Today, as our data show, OECD economies retain only limited traditional regulatory restrictions to inward foreign investment in the form of foreign ownership ceilings and other discriminatory conditions. While many emerging economies are generally less open, they have made their legal regimes for foreign direct investment less restrictive. Ongoing monitoring by the OECD shows that these liberalisation efforts continued after the 2008 financial crisis.

However, since the 2000s, a new and opposing trend has emerged: the screening and review of foreign investment projects, particularly those by state-owned enterprises (SOEs), to mitigate risks to national security. In fact, a recent survey shows that more and more governments are introducing or enhancing screening mechanisms for inbound investment projects to identify and address perceived threats. A third of the 59 advanced and emerging economies that participate in our investment policy dialogue now operate such mechanisms. Several governments are now subjecting investment proposals involving SOEs to greater scrutiny, and at times prohibiting these investments. Some countries have established special rules for the review and admission of investments by SOEs or are considering new policies to address the issue.

Could the precedent offered by the Santiago Principles help to point a way forward? In 2008, following widely publicised concerns in some large OECD countries regarding high profile investment projects by non-OECD sovereign wealth funds (SWFs), the community of SWFs and their government owners adopted a code of good conduct, the Santiago Principles, that was motivated by a desire to ensure that countries would not use national security arguments as a cover for protectionism against foreign SWFs. A decade later, the upsurge of SOEs in global investment and related national security concerns expressed by recipient countries could motivate similar arrangements with respect to investment by foreign SOEs.

International investment by SOEs is a growing concern

The increasing participation of SOEs in the global marketplace, particularly as international investors, makes it all the more important to balance concerns about the good governance of SOEs and to maintain a level playing field. As bearers of state as well as commercial interests, SOEs may place their emphasis on strategic acquisitions, such as advanced technologies for example, on non-market terms. It is fitting therefore that the rise of SOEs should revive interest in investment policies related to national security.

Australia, for instance, screens all SOE investments, whereas it screens private investments only when they exceed a value threshold. Canada applies different trigger thresholds for the application of its net-benefit test if the investor is state-owned. The United States has established specific rules regarding SOEs as part of its national security review mechanism (CFIUS), which require investigation of all government-controlled investments concerning US businesses. Germany has just strengthened its review mechanism. France, Germany and Italy have called for EU policies to address the issue. Strengthening screening of foreign direct investment (FDI) on national security grounds is also under consideration in the Netherlands, the United Kingdom and the United States.

Heightened awareness of the implications of SOE investment has also been evident in more recent international investment agreements. The Trans-Pacific Partnership agreement (TPP), for example, dedicates an entire chapter to SOE investments, whereas in older agreements SOEs were effectively afforded a status broadly similar to that of private investors.

Governments have always been careful to secure policy space to safeguard national security needs. The OECD Codes of Liberalisation, for instance, just as many investment treaties, contain corresponding national security exceptions. These exceptions are typically self-judging, and the term “national security” is intentionally broad.

Because of the discretionary nature of invoking national security as a ground for restricting foreign investment, the OECD Guidelines for Recipient Country Investment Policies relating to National Security were issued as an OECD Recommendation in 2009. These guidelines offer a set of specific recommendations providing for non-discrimination, transparency and predictability, as well as regulatory proportionality and accountability, including effective safeguards against undue influence and conflict of interest.

Internationally agreed rules on SOEs would bring benefits

While concerns relating to SOE investments are legitimate–and many SOEs are less transparent than private firms–the imposition of outright or unqualified restrictions on SOE investments in recipient countries benefit neither host nor home countries as opportunities for mutually beneficial international investment are forgone.

Applying internationally agreed commitments to SOEs and their government owners would help reassure recipient country regulators by offering greater transparency, addressing potential distortions that may arise from state ownership, and ensuring that the SOE owners also observe high standards of governance, disclosure and accountability. In turn, these regulators could be expected to apply the same conditions to SOEs that they apply to investment proposals by privately-owned companies.

A similar outcome to that agreed by SWFs can be achieved for SOE investments today. After all, recommendations on good practices for governance, disclosure accountability and transparency of SOEs have already been agreed under the OECD Guidelines on Corporate Governance of State-Owned Enterprises. These guidelines include specific provisions by which the legal and regulatory framework for SOEs, as well as their practices, should ensure a level playing field and fair competition in the marketplace when SOEs engage in economic activities. If translated to an international market context, and if fully implemented, these provisions could fully address the concerns of investment regulators. The last element required to emulate the “Santiago arrangement” would be to secure a commitment by SOEs to abide by these standards.

This could help convince recipient countries to keep their economies open and to uphold both the letter and the spirit of the principles of OECD guidance on national security.

The OECD stands ready to help forge a mutually beneficial and trusted arrangement for SOEs so that home and host societies can reap the benefits of international investment, while addressing important security concerns that inhibit certain investments proposed by SOEs today.

References and further reading

International Forum of Sovereign Wealth Funds (2008), the Santiago Principles

OECD (2016), State-Owned Enterprises as Global Competitors: A Challenge or an Opportunity?

OECD, OECD Codes of Liberalisation of Capital Movements and of Current Invisible Operations, 2012-2017

OECD, Corporate governance of SOEs: Guidance and research, 2011-2017

OECD, Monitoring investment and trade measures, 2008-2017

OECD, Freedom of investment at the OECD, 2007-2017

OECD (2015), OECD Guidelines on Corporate Governance of State-Owned Enterprises

OECD (2009), OECD Guidelines for Recipient Country Investment Policies Relating to National Security, Recommendation adopted by the OECD Council on 25 May 2009

OECD, FDI Regulatory Restrictiveness Index, 1997-2017

Shima, Y. (2015), The Policy Landscape for International Investment by Government-controlled Investors: A Fact Finding Survey, OECD Working Papers on International Investment, No. 2015/01, OECD Publishing, Paris.

Wehrlé, F. and J. Pohl (2016), Investment Policies Related to National Security: A Survey of Country Practices, OECD Working Papers on International Investment, No. 2016/02, OECD Publishing, Paris.