The Task Force on Financial Integrity and Economic Development conference in Bergen starting on 28 September also sees a side event on that day when Danish NGO IBIS and a range of its partner launch a new report. That report – entitled ‘Investments for Development: Derailed to Tax Havens: A report on the use of tax havens by Development Finance Institutions’ – has been written by UK based chartered accountant Richard Murphy (me), the director of Tax Research UK, a member organisation of the Co-ordinating Committee.

Richard Murphy seen speaking at last year's conference.

The report, which is sponsored by IBIS, NCA, CRBM, Eurodad, Forum Syd and the Tax Justice Network, looks at a critical area in the development activities of many European countries – the role of the Development Finance Institutions that they own in funding private sector investment in developing countries.

Development Finance Institutions (DFI) invest their capital in developing countries for the express purpose of advancing development in those places by promoting investment in local business. In this respect their activities can be compared to that of the European Investment Bank (EIB) and International Finance Corporation (IFC) – a part of the World Bank. At the end of 2008 the DFIs that were members of the European Development Finance Institutions network (EDFI) had combined funds invested of about €16.7 billion.

However, the business models of the DFIs has been subject to much criticism. Their investments have moved away from those areas normally associated with poverty relief – such as agriculture – and into areas like finance, hotels and telecoms. The DFIs have in many cases ceased to invest directly but do instead invest through funds over which they appear to have little control. And many of their investments are now routed through tax havens – and issue which attracted international attention when Norway banned their fund from investing, at least temporarily, in this way after the report of their  Commission on Capital Flight from Developing Countries attacked this practice in their report “Tax Havens and Development”.

The new IBIS report looks at these issues and suggests a new Code of Conduct for Development Finance Institutions to replace the one they have themselves recently proposed.

The Code is robust, and promotes transparency, accountability and a focus on local management of the investment Development Finance Institutions make. It is meant to be the basis for debate and engagement with the DFIs – who it is hoped will be represented in Bergen.

The event promises to be thought provoking and the start of an enhanced dialogue across Europe on what the role of DFIs is in a new era for aid as the world struggles to come to terms wit financial crisis.

You are welcome to join the discussion at the Radisson Blu Hotel Norge, Bergen on 28th of September, 5.15pm- 6.15pm

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