6 International reporting

Part of the expert group’s mandate is to provide recommendations on how Norway can contribute to the international debate on how the international community can edge closer to the dual ambition of both eradicating poverty and provide global public goods. This includes advice on international reporting systems, and what partners and arenas to engage with to discuss international funding and reporting. As shown in Chapter 5, the ODA system and the emerging TOSSD framework provides a platform for further engagement in this regard. In this chapter, we explain in more detail why this is important and how it should be followed up.

In this chapter, we will

• demonstrate that the OECD DAC remains important to ensure quality in Norwegian and international aid
• show that an additional framework beyond ODA is needed to report Norway’s investments in sustainable development
• discuss whether TOSSD is a suitable framework for Norway’s efforts for cooperation on global public goods for development

The OECD Development Assistance Committee has for many decades recorded and mapped member states’ aid and development funding. DAC statistics provide comprehensive data on the volume and trends in international ODA and other resource flows to developing countries. The reporting on behalf of the DAC provides unique insight into important trends and remain an important source of knowledge and information in assessing the quality and effect of aid. ODA is the key international measure for donor countries’ contributions to developing countries. However, the integrity of ODA and its relevance as a measure for donor countries’ efforts are under pressure. As discussed in Chapter 3, an increasing proportion of international aid has been allocated to initiatives that support global public goods, and the stretching of ODA rules to include new activities and measures is undermining the effectiveness and credibility of development cooperation. This is why we in Chapter 5 proposed a new framework, where ODA is practised more strictly. At the same time, new systems need to be developed to better reflect a changing international situation.

Norway, we suggest, should work internationally to restore the integrity of ODA by refocusing to the goal of making the biggest difference to poverty reduction. For a long time, new objectives and needs have been added to the international development agenda, and ODA rules, as they are practised today, include a number of measures that do not necessarily have the social and economic development of developing countries as their primary objective. The clearest example is donor refugee costs, but we also propose other initiatives and objectives that Norway should seek to exclude from ODA.

Norwegian public development and climate cooperation must be reported within internationally recognised frameworks for development finance. This is important to ensure a clearly defined scope for Norwegian investments, and the ability to monitor efforts. It is important that Norwegian development funding is subject to external assessment and monitoring, anchored in data and evidence, and based on agreed international principles and recommendations on effectiveness and good practice. This is precisely why it is necessary to work towards stricter ODA-rules, so that the DAC can serve its function in the best conceivable way. The DAC is still the international arena best positioned to ensure this. Moreover, the OECD Development Cooperation Directorate is a unique expert environment that monitors internationally recognised rules and guidelines for development cooperation. However, the DAC has also been criticised for being too donor-dominated and not sufficiently open to influence from the developing countries. The expert group believes that the DAC to a greater extent, should provide opportunities for developing countries to influence the development of ODA.

The DAC’s peer reviews of individual member countries’ development cooperation, which are carried out by other member countries, are important, as they provide in-depth examinations of the design and quality of development cooperation. DAC’s peer reviews take into account the changing development funding landscape and recent international commitments and agreements. The reviews also assess policy coherence for sustainable development, which is an important contribution to considering Norway’s international efforts as a whole – beyond ODA. It will be important to strengthen this work in line with other recommendations that suggest taking a broader perspective on development cooperation.

6.1 ODA Reporting

Norwegian development finance under categories 1a and 1b can be reported as ODA, since category 1 implies a tightening of ODA practices. The vast majority of category 2 funding would be in line with the DAC’s interpretation of the ODA definition and can also be reported as ODA. However, as already indicated, in some cases, investments in sustainable development under category 2 may go beyond the limits of ODA. The expert group’s assessment is that category 2, with the criteria we have established in Chapter 5, corresponds to the mandate given for this report, which is to give advice on ‘exceptions to the ODA rules’ that ‘in exceptional cases’ and ‘to a limited extent’ can be funded under the aid budget.135 These exceptions, according to the mandate, should also have a poverty-reducing effect. It is important in this respect to emphasise that the expert group does not consider ODA approval within the current DAC regulations to be sufficient to fulfil the ‘poverty reduction’ requirement. Had that been the case, ODA would not permit activities such as refugee expenditure and awareness-raising campaigns in high-income countries.

Our perspective on poverty and development in category 2 includes issues that – if not resolved – will undermine national efforts for poverty reduction. It should be possible to finance investments that fall outside the ODA framework but that have the same objective if doing so provides increased flexibility to achieve the objectives of category 2 more effectively. In our assessment, it should only be possible to consider financing measures that cannot be reported as ODA under category 2 (not in category 1). In practice, however, we believe that the requirements of effectiveness and sustainability, in addition to the geographical focus in terms of a requirement of close collaboration with developing countries will mean that the exceptions within the one per cent target will indeed be ‘exceptional’ and ‘limited’. We have already discussed examples of non-ODA measures within climate funding that can be assessed against the criteria for category 2 and the effectiveness principles. There are also examples of global health measures that could be considered, such as the vaccine coalition CEPI and the Pandemic Fund. As regards peace and security, the non-ODA share of UN peacekeeping operations as well as disarmament efforts can be considered. A further example is the financing of digital public goods aimed specifically at developing countries. This is not a list of recommended measures but examples that cannot always be fully reported as ODA, and that may be considered for funding in category 2 and possibly also within the one per cent target. All individual investments in sustainable development must be thoroughly assessed against alternative and potentially more effective measures and investments.

6.2 Reporting under the TOSSD framework

Total Official Support for Sustainable Development (TOSSD) is a framework for mapping international resource flows for sustainable development, which includes and goes beyond ODA. The TOSSD initiative is intended to be more inclusive and transparent than ODA (see complete review in Chapter 4). TOSSD provides an overview of South-South cooperation and other development efforts from donors beyond the DAC and is therefore a framework for development finance that better reflects the new development landscape. However, TOSSD is not an entirely suitable framework for Norway’s efforts for cooperation on global public goods for development. Pillar II of TOSSD includes not only international efforts, but also measures in donor countries that are of ‘transnational’ benefit, including climate measures. All protection or enhancement of greenhouse gas reservoirs (such as carbon capture and storage) can be reported within the TOSSD framework, on the grounds that it will benefit ‘all countries of the world’.136 There have been discussions within and outside the TOSSD Task Force on the definition and scope of Pillar II. Several members of the TOSSD Task Force have said that they see a need to establish a new Pillar III in order to distinguish more clearly between global and regional expenditure ‘for developing countries’ (Pillar II) and corresponding expenditure that is not of particular relevance to developing countries (Pillar III). Similarly, the UN Working Group on the Measurement of Development Support under SDG indicator 17.3.1 have emphasised the challenges of reconciling global public goods that all countries benefit from with the specific target (17.3) of mobilising resources for developing countries.137 This is one of the reasons why the TOSSD framework is not used in full for reporting related to this SDG target.

TOSSD also includes resource flows provided through numerous financial instruments regardless of concessionality, including – for example – loans on market terms and export credits, leaving TOSSD not well suited as a measure of overall donor effort. For Norway to be able to present its overall efforts for global public goods for development, it will require clarification and distinction between reporting criteria for global public goods with particular relevance to developing countries, one the one hand, and other global public goods, on the other. It will also require the development of a ‘donor perspective’ in TOSSD in addition to the ‘recipient perspective’, that reasonably presents donor countries’ efforts. Appropriate mechanisms to ensure quality and effectiveness of the support provided should also be put in place. The expert group considers TOSSD to be important, not least to ensure a more inclusive and genuinely universal arena for reporting and discussing aid and development. Thus, depending on the future direction and decisions of the new forum, TOSSD represents an opportunity to define a useful framework for Norwegian investments in sustainable development.

6.3 Conclusion

In an era where development finance and investments in sustainable development are evolving beyond the ODA framework, it is important to support the further development of international mechanisms for mapping, transparency, and quality assessment of development finance. OECD DAC and continued improvement of ODA rules are key in this regard. To preserve ODA, Norway should work internationally to promote a more stringent interpretation of the ODA definition, and for giving developing countries more influence in the discussions on ODA rules. At the same time, new goals and new partners in development cooperation require a new framework for reporting outside ODA. If designed appropriately, the TOSSD framework could be a suitable reporting system for investments in sustainable development. Norway should actively influence international discussions on the development of TOSSD and encourage broad participation in an inclusive governance structure for TOSSD.