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2010/SOM2/IEG/014

Agenda Item: 6

Investment Facilitation Action Plan: Progress Report on Implementing the IFAP in 2009/10 – IEG’s Implementation of 15 Priority Actions

Purpose: Consideration

Submitted by: Australia

/ Second Investment Experts’ Group MeetingSapporo, Japan
30 May 2010

Investment Facilitation Action Plan: Progress Report on Implementing the IFAP in 2009/10

-IEG’s Implementation of 15 priority actions

Background

1. At SOM1 in Singapore, SOM established three key priorities for 2009 for the REI Agenda, namely:

Priority 1: Trade and Investment Liberalisation “at the border”

Priority 2: Improving the Business Environment “behind-the-border”; and

Priority 3: Enhancing Physical Connectivity “across the border”.

In respect of Priority 2, SOM tasked CTI to finalise the implementation plan of the IFAP (including development of KPIs, follow-up capacity building activities, reports and other aspects of implementation by sub-fora and fora in 2009) with a view to completing implementation in 2010. While tasking its own FOTC on IFAP with following through on all aspects of IFAP implementation, it was recognised that IEG would also assume a major role in meeting these priorities.

To assist the CTI and its FOTC with its reporting responsibilities on the IFAP, IEG has prepared the progress report on its own actions in 2009 on IFAP implementation (2009/SOM2/CTI/006).

2. IEG’s first task has been to select 15 actions from the larger IFAP list for priority implementation in the first three years of the IFAP. These actions were required to address the three priority themes agreed to by APEC ministers in 2008, namely e-transparency, reducing investor risk and simplifying business regulation. The views of ABAC and the likely biggest business impacts were key factors influencing member economies choices of the 15 priority actions. The list of agreed priority actions is at Attachment A.

IEG’s second task has been to examine its existing work program to see to what extent it already includes actions and achievements which are addressing the 15 priority actions. IEG is also aware of IFAP-related work being done elsewhere in other CTI sub fora, other APEC committees and Working Groups.This work should be taken into account in its reporting back on IFAP implementation.

Third, arising from this above task, IEG has been considering how to address the most pressing capacity building and technical assistance gaps of the developing member economies in the priority action areas of the IFAP.A table was prepared and submitted to CTI, showing:

•how APEC is already addressing the IFAP priority themes and actions; and

•existing capacity building gaps in these priority areas.

Finally, deriving from a suggestion in the IFAP itself, IEG decided to identify at least IFAP priority action area capacity building needsfor immediate action in the latter half of 2009 and early 2010.

Progress report and next steps

IEG’s most recent task given by CTI1 2010 was to report at CTI2 on IEG’sown implementation of 15 IFAP priority actions. Australia as lead of the IEG Small Group for IFAP Implementation, took initiative to update the table (Attachment B).

Since last reporting in 2009, progress has been made through implementing a number of projects. These include:

  1. A project to establish base line data for all 21 APEC economies using the IFC’s Investing Across Borders indicators from 2008 forward. This will assist all APEC member economies improve their investment facilitation strategies in a number of IFAP priority action areas including accessing land and starting a business when you are a foreign investor Initial study and an APEC specific report commissioned WB/IFC to undertake work as part of its Investing Across Borders project () (CTI 43/2009T) addressing 4 key topics:

–Investing across sectors

–Starting a foreign business

–Accessing Land

–Arbitrating disputes

  1. Projects to assist member economies establish and maintain effective formal mechanisms for resolving disputes between investors and host authorities– APEC-UNCTAD Workshop on Investor-State Dispute Settlement (Core Elements Phase III Activity 2) (CTI 47/2009T) conducted by the Philippines in December 2009; and Capacity Building for Dispute Prevention and Preparedness (CTI 42/2009T) to be conducted by the United States in July 2010.
  2. An EC project continuing the Ease of Doing Business Initiative which was launched in 2009 - Ease of Doing Business Capacity Building Workshop for Dealing with Permits - Reforming the Regulatory System for Construction Permits (EC 02/2010A)
  3. A project to produce an e-portal for all investment rules and regulations. (CTI 01/2009)

Attachment A:Priority IFAP Actions for 2008-2010

E-transparency:

  • Publish laws, regulations, judicial decisions and administrative rulings of general application, including revisions and up-dates.
  • Make available to investors all rules and other information relating to investment promotion and incentive schemes.
  • Establish an APEC-wide website or e-portal to replace the hard copy publication the APEC Investment Guidebook.
  • Simplify and reduce the number of forms relating to foreign investment and encourage electronic lodgment.
  • Encourage on-line enquiries and on-line information on all foreign investment issues.

Reducing investor risk through more certainty:

  • Maintain a mechanism to provide timely and relevant advice of changes in procedures, applicable standards, technical regulations and conformance requirements.
  • Establish and maintain effective formal mechanisms for resolving disputes between investors and host authorities and for enforcing solutions, such as judicial, arbitral or administrative tribunals or procedures.
  • Provide advance notice of proposed changes to laws and regulations and provide an opportunity for public comment.
  • Establish and disseminate widely clear definitions of criteria for the assessment of investment proposals.
  • Establish timely, secure and effective systems of ownership registration and property use rights for land and other forms of property.

Simplifying business regulation including reducing business costs:

  • Simplify and streamline application and, registration, licensing and taxation procedures and establish a one-stop authority for the lodgement of papers.
  • Shorten the processing time for applications.
  • Conduct periodic reviews of investment procedures ensuring they are simple, transparent and at lowest possible cost.
  • Ensure the issuing of licences, permits and concessions is done at least cost to the investor.
  • Simplify the process for connecting to essential services such as telecommunications and utilities.

Attachment B:
E-Transparency
Priority Actions / IF Goals/Objectives / Existing CapacityBuilding Actions/Achievements / Identified CapacityBuilding Gaps
Publish laws, regulations, judicial decisions and administrative rulings of general application, including revisions and up-dates / Economic benefits of transparency adequately recognised by economy
Clear, transparent and “readily available” information from all levels of government
Easy to understand information
High level of electronic dissemination of information on investment laws, regulations, policies, promotions and incentives
Minimum number of investment approval procedures with easy to use electronic lodgement and processing
Specialisedon-line enquiry and feedback points
Defined roles, responsibilities and accountabilities for institutions responsible for the creation and maintenance of registers and websites holding information. / APEC’s Transparency Standards on Investment, IAP Transparency reporting
Voluntary assessments against APEC-OECD Regulatory Reform Checklist and other international transparency benchmarks and standards.
Online business registration procedures in many economies –some international best practice
Hard copy guide toAPEC-wide investment laws, regulations and policies produced every 3 years (6th edition published in 2007 (CTI 02/2006). A project to update via an e-port is ongoing (Development of APEC Guide to Investment Regimes E-Portal and electronic publication (CTI 01/2009).
Transparency provisions increasingin intra-APEC investment agreements or FTAs
Recent projects (completed in 2008-2009) addressing these actions: EC/Tel WG joint seminar on e-governance, Capacity Building forInternational investment Agreements (CTI 02/2008T), Good Governance in Investment Promotion (CTI 10/2008T), Capacity Building for Sharing Success Factors (CTI 32/2008T), Seminar for Sharing Experience on Improving Investment Policy (CTI 07/2009T), Joint APEC-BOI-FIAS Workshop on Improving Investment Promotion Performance in Accessibility to Investors and Information Provision (CTI 08/2009T), CoreElements Training (CE Phase III) (CTI 31/09T), Capacity Building to enhance investment flows for APEC regional economies (IEG 01/2008S, 02/2008S)
Ongoing projects include:CapacityBuilding for Sharing Success Factors of Improvement of Investment Environment – Phase 3 (CTI 03/2010T), CapacityBuilding for Dispute Prevention and Preparedness (CTI 42/2009T), Investing Across Borders: an important diagnostic tool to assist in IFAP implementation – Stage 1 (CTI 43/2009T), / Overly complexregulatory structures
Hard to understand legal texts
Lack of electronic certification and publishing of documents
Lack of computerised, central registry of laws and regulations
Consolidated primary and secondary laws and regulations on the Internet – no electronic APEC Investment Guidebook
No formal benchmarks/performance standards for IPAs and special enquiry pointsto measure progress
Lack of regular reviews of transparency regime against APEC and international benchmarks/checklists
Lack of technological, financial and human resources to increase electronic lodgement
Make available to investors all rules and other information relating to investment promotion and incentive schemes
Establish an APEC-wide website or e-portal to replace the hard copy publication the APEC Investment Guidebook (to be completed in 2010, updates to continue over 2011)
Simplify and reduce the number of forms relating to foreign investment and encourage electronic lodgement
Encourage on-line enquiries and on-line information on all foreign investment issues
Reducing investor risk
Priority Actions / IF Goals/Objectives / Existing CapacityBuilding Actions/Achievements / Identified CapacityBuilding Gaps
Maintain a mechanism to provide timely and relevant advice of changes in procedures, applicable standards, technical regulations and conformance requirements / Create and maintainsystems and contact points for listing all changes to procedures, standards, regulations and other requirements
Fair, systematic and effective public consultation procedures on all proposed new or amended laws
Clear criteria and transparent procedures for all administrative decisions involving investments (including licensing and concessions) with decisions based on these criteria
Secure property rights linking effort and reward covering all forms of property
Reliable land titling and property registers or measures that achieve the same effect
Effective enforcement of property rights through well-functioning courts
Reliable alternative mechanisms for resolving private disputes through arbitration, mediation or conciliation / APEC Transparency Standards on Investment
APEC-OECD Regulatory Reform Checklist self-assessment tool
EC Workshop on Improving Public Consultation in the Rulemaking Process
EC Good Practice Guide on Regulatory Reform
SMEWG Capability-Building Seminars on Ease of Doing Business: registering property (planned)
IEGCapacityBuildingWorkshop on Ease of Doing Business: Enforcing Contracts (CTI 28/2009T)
APEC Chemicals Dialogue: Principles for Best Practice Chemical Regulation
APEC Life Sciences Innovation Forum Enablers of Investment Checklist
Other recent projects (completed in 2008-2009) addressing these actions:Capacity Building for international investment Agreements (CTI 02/2008T), Capacity Building for Sharing Success Factors (CTI 32/2008T), Seminar for Sharing Experience on Improving Investment Policy (CTI 07/2009T), Joint APEC-BOI-FIAS Workshop on Improving Investment Promotion Performance in Accessibility to Investors and Information Provision (CTI 08/2009T), Doing Business - Investment at the Sub-National Level to Promote Economic Integration (CTI 35/2009T).
Ongoing projects include: CapacityBuilding for Sharing Success Factors of Improvement of Investment Environment – Phase 3 (CTI 03/2010T), CapacityBuilding for Dispute Prevention and Preparedness (CTI 42/2009T), Investing Across Borders: an important diagnostic tool to assist in IFAP implementation – Stage 1 (CTI 43/2009T), / Additional explanation of the benefits of procedural transparency including successful case studies and experiences
More work measuring and quantifying the administrative burden from unnecessary investment regulation
Improving the consistency in application of investment approval procedures at and between different levels of government
Land registrationand use rights – importance of and best practices in APEC economies
Alternative dispute resolution mechanisms and achieving more effective dispute settlement mechanisms across the region.
Establish and maintain effective formal mechanisms for resolving disputes between investors and host authorities and for enforcing solutions, such as judicial, arbitral or administrative tribunals or procedures
Provide advance notice of proposed changes to laws and regulations and provide an opportunity for public comment
Establish and disseminate widely clear definitions of criteria for the assessment of investment proposals
Establish timely, secure and effective systems of ownership registration and property use rights for land and other forms of property
Simplifying business regulation
Actions / Goals/Objectives / Existing CapacityBuilding Actions/Achievements / Identified CapacityBuilding Gaps
Simplify and streamline application and, registration, licensing and taxation procedures and establish a one-stop authority for the lodgement of papers / Simple, standardised, streamlined online application and registration process with no unnecessary procedures for all business licenses and tax procedures
Expeditious processing of all new business start-up applications based on statutory low time limits
New and amended licences, permits and concessions issued as quickly as possible and at least cost to the investor
Where appropriate, establish “one-stop” lodgement and approval authority
Periodic review of investment approval procedures including licenses, permits and concessions and institutional arrangements
Minimal inspection processes and simple integrated process for connecting to utilities
Establish and maintain effective consultation mechanisms with key stakeholders regarding the business impact of regulations / EC: APEC-OECD Regulatory Reform Checklist and Good Practice Guide on Regulatory Reform
SMEWG Capability-Building Seminars on Ease of Doing Business: Starting a Business and Business Licensing
APEC Energy Trade and Investment Action Plan
APEC Chemicals Dialogue: Principles for Best Practice Chemical Regulation
Increasing number of one stop shops in APEC economies
Other recent projects (completed in 2008-2009) addressing these actions:Capacity Building for Sharing Success Factors (CTI 32/2008T), Seminar for Sharing Experience on Improving Investment Policy (CTI 07/2009T), Doing Business - Investment at the Sub-National Level to Promote Economic Integration (CTI 35/2008T), APEC-UNCTAD Joint Capacity Building Project for Addressing Knowledge Gaps in the Use of Foreign Direct Investment (Phase 1, Phase 2) (CTI 03/2008A, CTI 04/2008A) Recent Trends on Investment Liberalization and Facilitation in Transport and Telecommunication Infrastructure(CTI 09/2008T),Seminar on Regulatory Reform in Enhancing the Domestic Business Environment (EC 01/2009T, jointly organized with IEG).
Ongoing projects include:Filling the Infrastructure gaps in the APEC’s developing economies (CTI 11/2009A), Investing Across Borders: an important diagnostic tool to assist in the implementation of the Investment Facilitation Action Plan (Stage 1) (CTI 43/2009T), CapacityBuilding for Sharing Success Factors – Phase 3 (CTI 03/2010T). / Clear policy roles and accountabilities between different levels of government
Role of systematic regulatory impact assessments of new or amended regulations
Strategies for improving basic infrastructure and infrastructure services including increased participation by private investors and competition
Lack of financial and human resources to implement systematic regulatory reform and competition policy
Further scope to improve the transparency and consistency of policy frameworks to enhance business certainty through capacity building/ sectoral initiatives
Shorten the processing time for applications
Conduct periodic reviews of investment procedures ensuring they are simple, transparent and at lowest possible cost
Ensure the issuing of licences, permits and concessions is done at least cost to the investor
Simplify the process for connecting to essential services such as telecommunications and utilities