Labour Standards and Development Finance Institutions: A Review of Current Policies and Activities

Development Finance Institutions (DFIs) have the purpose of providing financial resources to economic actors in regions and sectors where access to capital is limited. Rather than competing with private sector banks, DFIs generate finance for projects which are considered too risky by the majority of private banks. In particular, in the aftermath of the financial and economic crises, DFIs are likely to play an important role in helping developing countries recover from the economic downturn by ensuring that business operations and public infrastructure and construction projects can move ahead.This paper provides an initial exploration of these developments by documenting the policies of 16 DFIs at the global, regional, and bilateral level that have integrated labour provisions in their investment policies. Also, a review of first experiences with the application of these labour provisions in practice is provided.