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

• 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.

• 4-year National Development Plan has FDI target - USD 13 billion in 2014

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.

Closed = 1; Open = 0

2012 FDI Regulatory Restrictiveness Index

OECD average

NON-OECD average

0.000

0.050

0.100

0.150

0.200

0.250

0.300

0.350

0.400

0.450

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Closed = 1; Open = 0

*Preliminary scores

Colombia ranks among the countries with the most open investment regimes according to the OECD FDI Restrictiveness Index

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.

Domestic legislation at times stricter than WTO

requirements

Concluded 8 bilateral IIAs since 2005

Colombia is a top-ten business reformer

globally

No complaints from investors and all

investment incentives are granted to domestic & foreign investors alike

Improved regulatory FW, quality of feasibility

studies, pricing certainty, bidding conditions

Party to ICSID, no case of investor-state dispute

Colombia’s Policy Framework for Investment (PFI)

• Investment Policy• Investment Promotion & Facilitation• Trade Policy• Infrastructure

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.

Thank you

Mike PFISTER, OECD Investment Division Mike.Pfister@oecd.orgTel: +33.1.45.24.84.48

www.oecd.org/daf/investment