Natural resources sectors such as mining, oil, gas, hydro, and forestry plantations are an integral component of most developing economies in the Asia-Pacific region, thereby making them attractive investment sectors for both transnational corporations (TNCs) and state-owned enterprises (SOEs). Asia Pacific least developed countries attracted less than 1% of FDI inflows to the region, indicating strong growth potential. FDI in natural resources has the potential to bring about significant economic growth and development, but corruption and poor fiscal management have often led to greater inequality. More responsible business practices are necessary for companies to avoid these problems and contribute to poverty reduction and social development at the local level.
Businesses and policy makers share the responsibility for ensuring the adoption and effective implementation of these practices.
On the policy front, the main challenges are to maximize economic benefits at both national and local levels, while ensuring that the environment and human rights are well protected. Meanwhile, businesses have the responsibility to adopt and implement international standards of responsible business practice to help them avoid the negative impacts from their operations. A number of international standards, guidelines and initiatives have emerged to help businesses engage in more sustainable and socially responsible investment that contributes to inclusive and sustainable development. Governments need to drive these standards into enforceable business practice through policies and regulations. Businesses and investors can also do their part by joining these initiatives and following their guidance.