CORPORATE SOCIAL RESPONSIBILITY

CORPORATE SOCIAL RESPONSIBILITY SUPPORT FACILITIES IN THE PUBLIC PRIVATE PARTNERSHIP PROGRAMME NOVEMBER 2006

Business cooperation various programmes Danida has established a number of business programmes, which besides the PPP Programme include PFP and the B2B Programme. business-to-business for development The Business-to-Business (B2B) Programme promotes the establishment of long-term, sustainable partnerships between companies in Danida s programme countries and South Africa and Danish companies, with a view to promoting local business development by supporting transfer of know-how and technology. Further information at www.b2bprogramme.com. The Partnership Facility Programme (PFP) promotes the establishment of long-term sustainable partnerships between companies in China, Malaysia and Thailand and companies in Denmark, to contribute to a better environment in the recipient countries. Further information at www.partnershipfacility.com. Information on other business instruments (e.g. Mixed Credits, IFU, and Import Promotion) at www.goglobal.dk.

CORPORATE SOCIAL RESPONSIBILITY SUPPORT FACILITIES IN THE PUBLIC PRIVATE PARTNERSHIP PROGRAMME NOVEMBER 2006

CONTENTS Abbreviations and Acronyms 3 Introduction 4 1. The PPP Programme 5 1.1 The objective of the PPP Programme 5 1.2 Various types of partnerships 6 Examples of types and benefits of partnerships 8 1.3 Danida s contribution to the partnership 10 1.4 PPP countries 11 1.5 Contact information 11 2. The Partnership and the Partners 12 2.1 The partnership 12 2.2 The partners 13 3. Preparatory Phase 15 3.1 Opportunities for support 15 3.2 Partner identification 15 3.3 Study 15 3.4 Specific requirements and conditions 16 4. Implementation Phase 17 4.1 Opportunities for support 17 4.2 Advisory services 17 4.3 Financial support 17 4.4 Specific requirements and conditions 19 Annex 1. Applications 21 Annex 2. Reimbursement and Reporting 22 Annex 3. In-kind Contributions 23 Annex 4. Reimbursable Expenses 24 2

ABBREVIATIONS AND ACRONYMS B2B Programme Business-to-Business Programme. A Danida programme promoting long-term sustainable commercial business partnerships. The objective is to promote business development in the developing countries by transferring know-how and technology of Danish businesses to local businesses. Further information at www.b2bprogramme.com. CSR Corporate social responsibility. Danida Danish International Development Assistance. Global Compact The Global Compact is a United Nations initiative asking companies to embrace, support and enact, within their sphere of influence, a set of core values in the areas of human rights, labour standards, environment, and anticorruption. Further information at www.globalcompact.com. Millennium Development Goals The world s time-bound and quantified targets for addressing extreme poverty in its many dimensions. The goals are: 1) Eradicate extreme poverty and hunger; 2) Achieve universal primary education; 3) Promote gender equality and empower women; 4) Reduce child mortality; 5) Improve maternal health; 6) Combat HIV/AIDS, malaria and other diseases; 7) Ensure environmental sustainability; 8) Develop a global partnership for development. Further information at www.un.org/millenniumgoals. MFA Ministry of Foreign Affairs of Denmark. Further information at www.um.dk/en. NGO Non governmental organisation. PPP Programme Public Private Partnership Programme. A Danida programme promoting sustainable public private partnerships. The objective is to promote better working and living conditions in developing countries by advancing corporate social responsibility and increasing opportunities for investments and enhanced competitiveness. Further information at www.pppprogramme.com. PPP Toolbox This includes additional information on the PPP programme and mandatory templates for applications, reports etc. The toolbox is available at www.pppprogramme.com. 3

INTRODUCTION It has been widely recognised that the private sector must be involved in development cooperation to achieve the development objectives of the international community not least to eradicate poverty in all its forms. The importance attributed to the private sector reflects a remarkable shift in the perception of its potential. This change in outlook has been largely driven by globalisation exposing national differences in labour standards, rights and responsibilities, while drawing attention to the severe social and environmental problems facing developing countries. Corporate social responsibility, i.e. the individual business incorporating social and environmental considerations into its strategy, has thus begun to feature prominently on the development agenda. This has gathered special momentum since the United Nations Secretary-General Kofi Annan launched the Global Compact principles for good business conduct in 2000, advocating the strengthening of human and workers rights, greater emphasis on environmental protection, and measures against corruption. The Global Compact encourages businesses to engage in partnerships with the public sector and civil society in order to implement its principles and contribute to the achievement of the Millennium Development Goals. The international trends in the development agenda are reflected in Danida s Public Private Partnership (PPP) Programme. The programme was initiated in 2004 in response to the recommendations of the World Summit on Sustainable Development. Its focal point is the promotion of corporate social responsibility within the framework of the Global Compact. The PPP Programme supports the growing number of private companies and organisations who are committed to promoting corporate social responsibility. These agents see corporate social responsibility as an opportunity to make a difference, e.g. by promoting better working conditions for employees, while benefiting the company in terms of reduced staff turnover, greater transparency and business expansion. * These guidelines describe the support facilities and the criteria for support for partnerships. The guidelines do not set out how to write an application. Such instructions, including mandatory application and reporting templates, are available in the PPP Toolbox at www.pppprogramme.com. A list of mandatory application and reporting templates is presented in Annex 1 and 2. 4

1. THE PPP PROGRAMME 1.1 The objective of the PPP Programme Danida s Public Private Partnership (PPP) Programme is a part of Danish development cooperation. The overall objective of the PPP Programme is to contribute to reducing poverty by promoting economic growth and social development in developing countries. The immediate objective is to promote public private partnerships for better working and living conditions in developing countries by advancing corporate social responsibility and increasing opportunities for investments and enhanced competitiveness through innovation. The objectives are achieved by establishing public private partnerships within the framework of the United Nations Global Compact. The Global Compact is the world s most comprehensive initiative in the field of corporate social responsibility (CSR), and lays down ten principles: Human rights Principle 1 Businesses should support and respect the protection of human rights within their sphere of influence; and Principle 2 make sure their own corporations are not complicit in human rights abuses. Labour standards Principle 3 Businesses should uphold freedom of association and the effective recognition of the right to collective bargaining; Principle 4 Principle 5 Principle 6 the elimination of all forms of forced and compulsory labour; the effective abolition of child labour; and the elimination of discrimination in respect of employment and occupation. Environment Principle 7 Businesses should support a precautionary approach to environmental challenges; Principle 8 Principle 9 undertake initiatives to promote greater environmental responsibility; and encourage the development and diffusion of environmentally friendly technologies. Transparency and anti-corruption Principle 10 Businesses should work against corruption in all its forms, including extortion and bribery. Within this framework, the PPP Programme seeks to engage companies and organisations in promoting various aspects of CSR, e.g. by implementing higher labour standards, environmental standards, and sound business ethics. 5

1. The PPP Programme 1.2 Various types of partnerships Partnerships can advance CSR by targeting the local workplace and supply chain in the developing country, or through broader efforts targeted at the market, sector or community as illustrated below. Workplace Supply chain The blue sphere Companies can manage risks, minimise negative social and environmental impacts and create positive value for developing countries and communities by advancing CSR at the workplace and in the supply chain. Outside immediate corporate sphere (market, sector, community) The green sphere Companies and their partners such as community based organisations, NGOs and local authorities can mobilise core competencies and resources such as money, products, skills, premises and people to support or strengthen local markets, sectors and communities. Danida supports various types of partnerships: Workplace/supply chain partnerships Partnerships for development of CSR tools Innovative partnerships In the blue sphere, Danida supports partnerships centred on the workplace or supply chain, in which CSR efforts make a direct positive impact within the immediate sphere of a business organisation. These partnerships typically involve a local company, a Danish company and a non-profit organisation, e.g. a local NGO, implementing social and environmental improvements at the workplace or along the supply chain (for specific examples, please refer to page 8-9). In the green sphere, Danida supports partnerships aimed at developing CSR tools. These partnerships are typically composed of one or more local and Danish companies and organisations, and in some cases public institutions. The partners pool their respective core competencies and resources to develop innovative CSR tools and methods, which will make a direct positive impact beyond the immediate corporate sphere of the actors involved, e.g. in the market, sector or community. The tools may concern either individuals or entities, such as companies, in developing countries. An example is the development of an anti-corruption portal on the internet. This portal gives advice to companies faced with corruption, and provides tools for the development of a code of conduct and procedures for reporting and training in anticorruption (for specific examples, please refer to page 8-9). Besides these partnerships, which are usually linked to either the blue or the green sphere, Danida supports innovative partnerships, which may operate in both spheres. Such undertakings aim to enhance investment opportunities and/or the international competitiveness of local companies. Such partnerships typically involve Danida as the public partner and one or more Danish companies investing in companies in developing countries and conducting CSR management training in these local companies. More foreign investments combined with CSR management training will help the companies to grow, increase production and create jobs. In addition, better conditions for local entrepreneurs may enhance competitiveness in the local and regional market (for specific examples, please refer to page 8-9). 6

1. The PPP Programme By addressing CSR or by increasing opportunities for investments, companies have a chance to make a real difference for their employees and for society at large. Benefits in the blue sphere Challenges such as local environmental degradation, HIV/AIDS, and inadequate health systems can add directly to the costs and risks of doing business. They may raise the costs of operations, raw materials, hiring, training, staff turnover and other personnel expenditure, insurance, and capital. They can create both short-term and long-term risks to a firm s finances, market position, and reputation. Companies that understand and address these challenges, e.g. by promoting CSR in their supply chain, can minimise their risks, improve their reputation, reduce their costs, increase their resource efficiency, and raise their productivity. Benefits in the green sphere Many innovative companies are developing new products, services, and technologies, and in some cases even transforming their business models to address social and environmental challenges. They recognise that many developing countries offer long-term business opportunities. These companies CSR efforts make a real difference beyond their immediate corporate sphere of influence, while boosting profits in the long run by presenting a profile of social responsibility. To these companies, promoting CSR beyond their immediate corporate sphere can be a matter of value creation, branding and competitiveness. 7

EXAMPLES OF TYPES AND BENEFITS OF PARTNERSHIPS Blue sphere: Workplace/supply chain partnerships Implementing standards for environmental and social management Butler s Choice is engaged in selling fish products and has received support to implement an environmental management system, ISO 14001, and a management system for social responsibility, SA 8000, covering its production in India. Besides Butler and its Indian office, the partnership includes two fish processing companies, a number of fish farms and Danida. This partnership will result in improved ethical, social and environmental conditions at Butler s Indian suppliers. Benefits: The SA 8000 and ISO 14001 certification is expected to result in more jobs and better working conditions in the fishing sector in India. Butler views the partnership as an important effort towards sustainable production in India, and expects it to lead to improved competitiveness for both the company and its suppliers. Ethical supply chain management The Danish company Lisbeth Dahl A/S sells handicrafts imported from India. Lisbeth Dahl A/S and its Indian supplier Art World are examining the possibilities for addressing ethical and environmental issues in Art World and its supply chain. The idea is to focus on upholding basic workers rights, such as equal opportunities and treatment and the right to a safe and healthy working environment. Another aim is to address child labour issues. Benefits: Lisbeth Dahl and Art World will gain greater understanding of the potential problems in the supply chain, thus becoming more able to intervene. The local population will benefit by means of better environmental and labour standards, once the findings are translated into action. Green sphere: Partnerships for development of CSR tools AIDS information by mobile phone Most of those who become infected by HIV in Kenya today are young people in urban areas. Acknowledgement of this has led to the establishment of a partnership, aimed at giving Kenyan youth more and better information about HIV/AIDS by mobile phone. The means are interactive voice-response, WAP and SMS technology. The partnership is the brainchild of the Danish enterprise, Inmobia, which supplies mobile portals. Other partners include the Kenyan telecom company, Celtel, and the National Aids Control Council (NACC). Inmobia develops the concept and technology, Celtel delivers the services, NACC supplies the technical information about HIV/AIDS, and Danida provides the finance and sparring to the partnership. Benefits: The partnership is expected to lead to greater awareness of how to protect oneself against HIV/ AIDS, thus encouraging changed behaviour among Kenyan youth. Both Inmobia and Celtel see the partnership as a way of generating valuable goodwill and strengthening their profile as socially responsible players in the African market. Additionally, Celtel will get important information about the customers needs and ways of using the mobile phone. Tools to tackle child labour The objective of this partnership is to develop tools for Danish companies and local partners in Bangladesh to deal, in a socially responsible manner, with the complex issues of child labour. The Danish NGO Save the Children has, in cooperation with the Danish Federation of Small and Medium-Sized 8

Enterprises and six Danish companies, developed methods to tackle child labour in Bangladesh s textile industry. Danida supports the partnership financially and through advisory services. Benefits: The children in Bangladesh will benefit from more responsible actions of the Danish and local companies, e.g. by getting lighter work, training and schooling. The companies will be able to tackle child labour, thus meeting the demands of their customers for socially responsible production. Internet-based anti-corruption portal Small and medium-sized companies typically have few resources to fight corruption, which gives rise to vast needs for tools and support in this area. Against this background, the Danish company Global Advice Network, Transparency International and a number of other Danish firms have developed an internetbased anti-corruption portal, whose facilities are generally applicable to companies operating in developing countries. Danida has co-funded the development of the portal. Benefits: The benefits of less corruption are increased production and foreign investment, which will result in more local jobs and higher living standards. The companies will benefit from cost reductions, greater efficiency and risk minimisation. Blue and green sphere: Innovative partnerships Sustainable investments in local companies Danida and two Danish pension funds PKA and PBU have established a partnership aiming at investing in local companies in developing countries. The pension funds will invest DKK 470 million. Danida contributes by DKK 47 million to cover the extra costs related to investing in developing countries, e.g. screening of the companies, due diligence surveys, monitoring of the investments, training and education in the companies in accordance with the Global Compact principles. Benefits: This partnership will result in more sustainable investments in companies in the developing countries and thereby improved conditions for economic growth, expansion and job creation. PKA and PBU invest in the developing countries because they expect a high rate of return. In addition, this investment strategy is in accordance with the members wishes to prioritise ethical investments. Through a partnership with Danida the pension funds get access to local knowledge and network and the economic support contributes to reducing the risks of investing in these markets. Care4Africa investments in small and medium sized companies Care4Africa (C4) is a new and innovative initiative started by Mads Kjaer, the former CEO of Kjaer Group. The objective of the partnership is to attract capital for African business investments via a new web portal. The portal will encourage individuals as well as firms to invest in businesses in Africa, thereby contributing to the achievement of the Millennium Development Goals. Danida contributes with partnership sparring and economic support to cover a part of the development costs and extra costs related to investing in companies in developing countries. Benefits: Small and medium sized companies in Africa with growth potential will benefit by getting access to more foreign capital. The local population will benefit both economically and socially through an increase in local jobs and by better living conditions. The Danish company Care4Africa expects over time a high rate of return. 9

1. The PPP Programme 1.3 Danida s contribution to the partnership By virtue of its longstanding cooperation with developing countries, Danida is able to offer expertise, access to networks, credibility, and knowledge of local conditions. Danida contributes to two distinct phases of a partnership, namely the Preparatory Phase and the Implementation Phase. Preparatory Phase Partner identification Study Support max. DKK 350,000 Share of expenses max. 60% Implementation Phase Training, information and development activities Support max. DKK 5,000,000 Share of expenses max. 60% Preparatory Phase Implementation Phase In the Preparatory Phase, the partnership idea is discussed and developed. In this process, additional partners might need to be identified. Danida can assist in identifying potential partners and assist the partners to develop the partnership idea. Additionally, Danida can provide financial support for a study. The maximum level of support in the Preparatory Phase is 60% of the total budget up to a limit of DKK 350,000 in total. In the Implementation Phase, the partnership idea is implemented. Danida can support this, especially by financing training, education, dissemination of information and development of CSR tools that contribute to advancing one or more Global Compact principles. The maximum level of support is 60% up to a ceiling of DKK 5 million, minus previous support granted during the Preparatory Phase. The percentage of support will be affected by the size of the total budget, risks of the project etc. The limit of DKK 5 million may be exceeded in the case of innovative partnerships (please refer to chapter 1.2). The minimum 40% of the budget to be contributed by private companies and organisations can be paid in-kind (please refer to Annex 3). The opportunities for receiving support in each of the two phases are described in detail in chapter 3 and 4 (for detailed information on eligible expenses, please refer to Annex 4). Companies, organisations and other partners need not have received support from Danida during the Preparatory Phase in order to apply for support in the Implementation Phase. Conversely, a successful Preparatory Phase does not guarantee Implementation Phase support, although the chances will increase as the potential for development impact is substantiated. As a general rule, a partnership between a Danish and a local company currently supported by the B2B Programme cannot be supported under the PPP Programme. If B2B partners wish to implement CSR measures at the workplace, they may do so within the B2B Programme. This general rule does not apply if the B2B partners wish to launch an innovative partnership or a partnership for development of CSR tools under the PPP Programme (please refer to chapter 1.2). 10

1. The PPP Programme 1.4 PPP countries The PPP Programme operates in Danida s programme countries and in South Africa. The programme countries are Bangladesh, Benin, Bhutan, Bolivia, Burkina Faso, Egypt, Ghana, Kenya, Mali, Mozambique, Nepal, Nicaragua, Tanzania, Uganda, Vietnam and Zambia. The PPP Programme is also available in other countries with a GNI per capita below a certain level. In 2006/2007, this was set at USD 2,772. Please refer to the PPP website for information on the latest ceiling for GNI per capita in force. Additionally, it is a requirement that Danida has acquired knowledge of the country in question through other development activities. Examples of countries that fulfil both requirements are India, Thailand, and China (please note that Danida only supports partnerships that contribute to development in western and northern China). Companies may contact the Ministry of Foreign Affairs of Denmark (MFA) with enquiries about countries not listed here. 1.5 Contact information In the programme countries and in South Africa, the Embassy of Denmark manages the PPP Programme. Applicants are encouraged to contact the relevant Embassy directly. The Embassy will make an informal screening of the partnership idea before a formal application is submitted to the Embassy. MFA administers partnerships in all other countries. Accordingly, applicants with partnership ideas in non-programme countries (except South Africa) should contact the MFA. The same applies to partnership ideas that can be characterised as innovative partnerships or partnerships having a regional or global scope. Before the partners submit a formal application, the MFA will make an initial informal screening of the partnership idea. Embassy contact: www.pppprogramme. com MFA contact: ERH@um.dk 11

2. THE PARTNERSHIP AND THE PARTNERS The concept of partnership is at the core of the PPP Programme. The partners concerned be they private, public, NGOs or any other group of individuals will often have different objectives, values, and cultures, but they are sharing risks, responsibilities, resources, and competencies whilst committed to common tasks, which would achieve their specific individual objectives. Danida s objective is to improve working and living conditions in developing countries by advancing CSR, and by increasing opportunities for investments and competitiveness through innovation. To ensure that the partnership contributes to that end, the partners and the partnership must meet certain requirements. 2.1 The partnership Which criteria guide the assessment of a partnership proposal? Six development impact criteria guide the assessment of how a partnership proposal contributes to the objectives of the programme. These criteria reflect the Global Compact framework and Danida s commitment to contributing to the achievement of the Millennium Development Goals (please refer to Abbreviations and Acronyms ). All applications will be screened and assessed against these development impact criteria. It is not a goal in itself that the partnership addresses all of the impact criteria. Indeed, the development impact will usually be greater if the partnership is focused. I. Promotion of human and workers rights How will the partnership contribute to promoting and realising human and workers rights, such as freedom of association, the effective recognition of the right to collective bargaining, elimination of all forms of forced or compulsory labour and the effective abolition of child labour? II. Protection and improvement of the environment How will the partnership contribute to improving the working environment and external environment? How will it take a precautionary approach to environmental challenges, and encourage the development and diffusion of environmentally friendly technologies? How will it address occupational health and safety issues? III. Promotion of sound business practices How will the partnership fight corruption including extortion, facilitation payments, and bribery? IV. Promotion of gender equality and empowerment of women How will the partnership contribute to strengthening women s economic capacity as entrepreneurs, employees and producers? The better the application succeeds in documenting developmental effects of the proposed partnership, the more likely it is to be approved V. Combating HIV/AIDS, malaria and other diseases How will the partnership contribute to increasing awareness of, and investment in, health issues? VI. Promotion of innovative partnerships for investments and competitiveness How can the partnership contribute, in an innovative fashion, to increasing foreign investments in developing countries and/or improving international competitiveness? The sixth criterion differs from the others in the sense that it cannot be directly linked to typical socially oriented activities. It primarily aims to invite proposals for innovative partnerships. Inspiration on how to meet the criteria is presented in chapter 4. 12

2. The Partnership and the Partners Since Danida cannot support all partnerships, even good development partnerships, eligible for support in principle, might be rejected. 2.2 The partners As a minimum, the partnership must include a Danish company and a local partner (company, organisation or public institution). Danish organisations and institutions may also be included as partners. The partnership will often involve several actors. Danida may be regarded as the public partner, but will not act as an implementing entity. Additionality is important when assessing whether or not a partnership merits support from Danida. Additionality means that each partner s contribution to the partnership is essential for carrying out the partnership activities. What is additionality? The principle of additionality implies that Danida can only be a partner if it brings additionality to the partnership through its advisory service and/or financial support. Thus, Danida s contribution must lead to efforts and activities in the partnership that would not otherwise have been undertaken. The partners must in their application explain and justify how the contribution of each partner brings additionality to the proposed partnership and demonstrate that Danida supported activities would not have been carried out without its support. A partnership agreement must be formulated, describing the role and the contributions of each partner (please refer to the PPP Toolbox for template for partnership agreement). Besides the principle of additionality, the companies must be financially sound and have the necessary resources to enter into a partnership. Both local and Danish companies must demonstrate this to the Embassy/MFA by handing over relevant accounts and licences. In partnerships composed of several local and Danish partners, the main project partners must meet the following requirements: Local companies must present their business licence and annual accounts for the last three years to document that they meet the following requirements: Legal registration and domicile in the country; Experience in the field of business; Positive economic results and sufficient resources to engage in a partnership. Which local companies are eligible as partners? Danish subsidiaries may, in certain cases, qualify as local partners if they fulfil the requirements above. In these cases, the requirement to demonstrate additionality will be vital, as will an assessment of potential spill-over effects beyond the subsidiary. Danish companies must present evidence that they meet the following requirements: As a general rule, audited company accounts should show a pre-tax profit in at least two of the preceding three years; Which Danish companies are eligible as partners? 13

2. The Partnership and the Partners According to the audited accounts for the accounting period most recently completed, the equity must make up at least 15% of the balance-sheet total; The company must be credible and creditworthy, and not listed with RKI Kredit Information A/S as a bad debtor; The company must have sufficient resources to engage in a partnership; The company must have successfully operated a business for at least five years. Exemptions from this requirement can be made for emerging industries. Which organisations and institutions are eligible as partners? Organisations and public institutions will be approved individually on a case-by-case basis. Fundamentally, the assessment will look at which resources each partner is able to bring to the partnership, and to what extent these resources contribute to promoting better working and living conditions in the developing country. Organisations and institutions must demonstrate that: they have the resources necessary to enter into a partnership; their contribution is necessary to implement the partnership. The partners are required, as a minimum, to comply with all relevant local and national regulations regarding working environment and external environment. If they do not, remedial action to ensure compliance must be identified and implemented. Additionally, the partners must respect the ILO s fundamental principles on workers rights. These include respect for the freedom of association and the right to collective bargaining, elimination of all forms of forced labour, effective abolition of child labour and elimination of workplace discrimination 1. If these principles are not adhered to, remedial action must be identified and implemented. For more information on ILO s fundamental principles, please refer to PPP General Conditions set out in the PPP Toolbox. In relation to the innovative partnership types (please refer to chapter 2.1) the companies invested in must meet the principles of the Global Compact. If these principles are not adhered to, remedial action must be identified and implemented. 1) In countries that have not signed these conventions, the partners shall enable alternative means for workers to express their grievances and protect their rights regarding working conditions and terms of employment. In such cases, and where national law is silent, the partners will not discourage workers from forming or joining workers organisations of their choosing or from bargaining collectively, and will not discriminate or retaliate against workers who participate, or seek to participate, in such organisations and bargain collectively. The partners will engage with such worker representatives. Workers organisations are expected to fairly represent the workers in the workforce. 14

3. PREPARATORY PHASE 3.1 Opportunities for support The purpose of the Preparatory Phase is to match potential partners and to develop an initially rather loose partnership idea into a more well-defined one. At the end of the phase, the partnership idea should include an implementation plan, clear objectives, steps needed to achieve these objectives, as well as the partners specific contributions and expectations. The Preparatory Phase revolves around two elements: partner identification and a study. Danida s share of expenses Maximum refund (DKK) Partner identification Advisory service (free of charge) Study Max. 60 % 350,000 3.2 Partner identification Usually, the main partners in a proposed partnership are identified before an application is submitted to Danida. However, in some cases, the partners might find it necessary to include additional partners be they organisations, companies, or public institutions in order to strengthen the partnership. If so, Danida can, free of charge, assist in searching for partners. Please note that this service is available in programme countries and in South Africa only. A company, an organisation or a public institution that need to identify additional partners must submit Application 1 Preparatory Phase (please refer to Annex 1). In the application, the partner(s) shall describe the partnership idea as well as the requirements to the desired partner(s). When a potential partner has been found, the applicant partner(s) and the identified partner are strongly recommended to visit each other to conduct initial discussions and to test the foundation for a partnership. Although Danida encourages the partners to carry out such visits, these are not eligible for support. 3.3 Study When applying for support, the mandatory application template must be used. Templates are available for download in the PPP Toolbox: www.pppprogramme. com Depending on the characteristics of the partnership idea, a study might be needed to collect further information, in order to develop the specific partnership idea or to clarify whether it is viable. Danida may cover a maximum of 60% of the costs of such a study, up to a limit of DKK 350,000. The study must always address whether the planned partnership complies with the specific requirements of the PPP Programme. The specific aspects that need to be examined in the study must be specified in the Terms of Reference (ToR), which forms part of the Application 1 Preparatory Phase (please refer to Annex 1 and to the PPP Toolbox). 15

3. Preparatory Phase 3.4 Specific requirements and conditions Reporting The study must be conducted and submitted to the Embassy/MFA no later than six months after approval. It must adequately respond to the agreed ToR, and be of sufficient quality for the local partner(s) to make use of it, with or without further cooperation of the Danish partner(s). In some cases, the Embassy/MFA may require adjustments to the study. Financial contribution Danida s financial support will be paid as reimbursement of actual expenses, and is conditional on the partners submitting the final study (please refer to Annex 2). The applicant partners may pay their share in-kind, i.e. as a contribution that is not directly financial, but takes place by allocating resources to the partnership, such as time spent by employees (please refer to Annex 3). 16

4. IMPLEMENTATION PHASE 4.1 Opportunities for support The Implementation Phase is the central part of the partnership, and may last up to three years. It is in this phase that the partnership idea is implemented. Danida s share of expenses Maximum refund (DKK) Training, information and development of measures within the following focus areas: Promote human and workers rights Max. 60% 5,000,000 Protect and improve the environment (Less previous support) Promote sound business practices Promote gender equality and empower women Combat HIV/AIDS, malaria and other diseases Promote opportunities for investments and enhanced competitiveness Costs of equipment and plant contributing to advancing CSR may be eligible for support following an individual assessment. Danida may cover a maximum of 60% of such costs, up to a total of DKK 1,000,000. 4.2 Advisory services Depending on the type of partnership, Danida may contribute with advisory services towards refining the partnership idea, using its knowledge of local conditions, experience and access to networks. The extent of such contributions will depend on the specific needs of the proposed partnership, and especially on its expected development impact. In general, Danida s advisory services are available in programme countries and in South Africa only. Danida s contribution to the partnership is primarily financial, but may also be of advisory nature 4.3 Financial support Danida contributes to the partnership by financially supporting a maximum of 60% of eligible expenses up to a limit of DKK 5 million, minus the support provided in the Preparatory Phase. Eligible expenses include costs related to training, education, dissemination of information and development of new tools and methods within the focus areas. In some cases, costs of equipment and plant directly related to promoting one or more of the focus areas are eligible for support. In innovative partnerships Danida may even exceed the limit of DKK 5 million. Danida will require that part of the grant be spent on upgrading the companies invested in so that they can comply with the principles of Global Compact and with international conventions and national laws on workers and human rights and on the environment. 17

4. Implementation Phase Below, the activity types are described through examples. It must be emphasised that these examples are meant as inspiration only, and not as a comprehensive list of activities eligible for support. Promotion of human and workers rights Danida supports training and information efforts aimed at upholding internationally recognised human and workers rights. Establishment of explicit policies on human and workers rights and of monitoring systems to ensure that policies are implemented at the workplace and throughout the supply chain; Description of procedures for possible hazardous work and for emergency situations; Development of a toolkit to raise awareness of human or workers rights in a given sector (please refer to page 8 for a specific example). Protection and improvement of the environment Danida supports training and information efforts aimed at protecting or improving the environment. Furthermore, partners can apply for support for environmental investments. Implementation of standards for environmental management (please refer to page 8 for a specific example); Development of new solutions to environmental problems and challenges; Development of training toolkit, for instance project cycle management within a given industry, or guidelines on how to handle environmental challenges in a specific sector. Promotion of sound business practices Danida supports training and information efforts that contribute to fighting corruption. Establishment of a code of conduct, a business integrity management system, and training of workers and management on how to act when faced with corruption, such as facility payments; Development of general guidelines on anti-corruption, e.g. as e-learning (please refer to page 9 for a specific example). Promotion of gender equality and empowerment of women Danida supports training and information efforts that contribute to empowering female workers or women in general. Seminars at the workplace or in the community about women s working and human rights; Establishment of company policy on gender equality. Combating HIV/AIDS, malaria and other diseases Danida supports information and training efforts aimed at fighting HIV/AIDS, malaria and other diseases among workers at the workplace, along the supply chain or in the community/country at large. 18

4. Implementation Phase General information on diseases, e.g. through seminars for workers and their families on the importance of hygiene and prevention, or by means of information technologies (please refer to page 8 for a specific example); Provision of medical advice, medical treatment and general assistance to diseased people and their families; Establishment of explicit HIV/AIDS policy at the workplace. Promotion of innovative partnerships for investments and competitiveness Danida supports efforts and activities that contribute, in an innovative fashion, to increasing foreign direct investments and/or improving international competitiveness of developing countries. Development of new concepts for generating foreign investments in developing countries. An example is the design of a new internet portal aimed at attracting capital for African business investments. The portal will encourage individuals as well as firms to invest in businesses in Africa, thereby contributing to the achievement of the Millennium Development Goals (please refer to page 9); Transfer of knowledge and information on drivers for entrepreneurship and business development. This could, for instance, be an effort to improve the local environment for entrepreneurs, thus contributing to the growth and competitiveness of local companies. 4.4 Specific requirements and conditions Milestones When applying, the partners must submit Application 2 Implementation Phase (please refer to Annex 1) in which they must account for how and to what extent the envisioned partnership meets the requirements set out in chapter 2. The application must lay down milestones for the implementation and the development impact of the partnership. Accordingly, the Implementation Phase will be divided into two or more sub phases. In order to move from one sub phase to the next, the partnership must meet the milestones for the specific phase in order to release the grant for the following phase. Reporting Quarterly progress reports must be submitted, as must a final report when Danida s support expires. These reports describe how the partnership is progressing in relation to agreed milestones, and whether and to what extent it deviates from the original plan outlined in the application. Moreover, the partners must report on how the partnership is progressing as measured against a predefined indicator of the partnership s development impact. The partners must report on the indicator each year in December during the Implementation Phase. When Danida s support expires, the partners must continue to report on the indicator for an additional period of three years. This is important in order to document the development impact of the partnership and the programme. However, since it includes one indicator only, this reporting should be neither extensive nor time-consuming. Please refer to the PPP Toolbox for more information on the reporting on milestones and indicators. 19

4. Implementation Phase Financial contribution Danida s financial support will be paid as reimbursements of actual expenses. Each disbursement is conditional on the partners submitting a quarterly progress report (please refer to Annex 2). The applicant partners may pay their share in-kind, i.e. as a contribution that is not directly financial, but takes place by allocating resources to the partnership, such as time spent by employees (please refer to Annex 3). 20

ANNEX 1. APPLICATIONS The illustration below shows the contents of applications for each of the two phases. Applicants should keep in mind that mandatory templates must be used. These are available for download in the PPP Toolbox (www.pppprogramme.com). The application template for the Preparatory Phase is called Application 1 Preparatory Phase. When downloading the template, please be aware that it exists in three versions (depending on whether the main applicant is a Danish company, a local company or an organisation/institution). The application template to be used for the Implementation Phase is called Application 2 Implementation Phase. Before an application is formally submitted, the Embassy/MFA will conduct an informal assessment of the proposed partnership and partners. PPP Programme components Preparatory Phase Partner identification Study Support max. DKK 350,000 Share of expenses max. 60% Implementation Phase Training, information and development activities Support max. DKK 5,000,000 Share of expenses max. 60% Contents of applications Application 1 Preparatory Phase 1. Core data 2. Partnership idea 3. Support applied for 3.a ToR for study (incl. budget) Annexes Application 2 Implementation Phase 1. Core data 2. Partnership project 3. Project strategy 4. Training, information and development activities 4. Budget 5. Development aspects Annexes 21

ANNEX 2. REIMBURSEMENT AND REPORTING Below is a list of templates that must be used in each of the two phases for reporting and reimbursement requests. All templates are available for download in the PPP Toolbox at www.pppprogramme.com. Preparatory Phase Implementation Phase Reporting Study report Quarterly progress reports/final report Reimbursement Budget and reimbursement (form A-E) Budget and reimbursement (form A-H) Documentation Auditor s statement Auditor s statement The financial contribution of the PPP Programme is paid out as reimbursement of expenses incurred by the partners. The reimbursement of costs related to the Preparatory Phase takes place after the undertaking has been completed. A request for reimbursement of the costs related to a study must be submitted, together with the final study report, no later than six months after the undertaking has commenced. Reimbursement of costs related to the Implementation Phase usually takes place every three months, based on documentation of the expenses incurred and on what has been agreed in Danida s pledge of support. Each reimbursement is conditional upon the partners having submitted a quarterly progress report. Reimbursement of eligible expenses requires an auditor s statement, certifying that the time spent, fee and salary rates applied and documentation of expenses and payments (documented to the auditor with external vouchers and travel accounts) have been checked without cause for comments. An authorised or certified auditor must perform the audit. 22

ANNEX 3. IN-KIND CONTRIBUTIONS The applicant partners may pay their share in-kind, i.e. as a contribution that is not directly financial, but takes place by allocating resources to the partnership, such as time spent by employees, donation of equipment etc. The private contribution should be truly private. Co-financing from EU, other embassies or donors cannot be accepted as the partners contribution to the project. Time spent on the project There are certain conditions as to when an employee s time spent on the project may count as an in-kind contribution. In general, a distinction is made according to whether the partner acts as a contributor or a recipient. If an employee is actively contributing in developing concepts, tools, materials etc. important for the fulfilment of the project objective, the employee is classified as a contributor to the partnership. Thus, the time spent may count as an in-kind contribution. If the employee is receiving education, training or information the employee is perceived as a recipient. An example is an information meeting where a group of employees are receiving information on e.g. workers rights or how to protect themselves against HIV/AIDS. Another example is a group of employees receiving training in CSR issues conducted by an employee educated under the PPP project. In this case it will only be the trainer s time that can count as an in-kind contribution. In practise the workplace/supply chain partnerships will often include more education and information activities than the other types of partnerships. In these cases the employee s time spent on receiving education cannot count as an in-kind contribution. In partnerships for development of CSR tools and innovative partnerships the partners are often contributing with their core competences to a higher degree and there will be more focus on development of tools, concepts etc. and less on educationoriented activities. Such development-oriented activities may count as an in-kind contribution. 23

ANNEX 4. REIMBURSABLE EXPENSES Specific expenditures eligible for support are presented below please refer to www.pppprogramme.com for additional information. Phases Type of support Danida s share of expenses (max.) Maximum refund in DKK Study Project Accommodation Auditor s fees Fees and expenses, Danish external consultants* Fees and expenses, local external consultants** International air travel Per diem Salaries of employees*** Transport Travel insurance Vaccinations Accommodation Auditor s fees Environmental measures Equipment Fees and expenses, Danish external consultants* Fees and expenses, local external consultants** International air travel Materials for training and technical assistance Per diem Salaries of employees*** Transport Travel insurance Vaccinations 60% 350,000 60% 5,000,000 (Minus previous support) * Fees and salaries for Danish consultants will be calculated following the KR-rules (fee rates for short-term advisers). Please consult the PPP Toolbox for additional information. ** The Embassy can provide information on standard fees and salaries for local consultants. *** The partners time spent on project activities are eligible for support if they are actively contributing to the partnership e.g. if the partners are developing new concepts or conducting training. The partners time spent on receiving training or other forms of education is not eligible for support. Salaries to the Danish partner s own employees follow standard rates according to seniority (please refer to PPP Toolbox). The Embassy can provide information on the level of salaries to local partner s own employees. 24