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Financing for Development: ITUC Statement on the ‘Compromiso de Sevilla’
The Conference covered a broad range of themes, including taxation, debt, trade, development cooperation and private finance, where bold reforms are urgently needed to close the financing gap for the Sustainable Development Goals (SDGs). The Compromiso de Sevilla presents a number of important commitments, but also highlights critical gaps that must be addressed to place democracy and social justice at the centre of the international financial architecture.
Welcome focus on decent work, care and social protection
The agreement sets out joint commitments to invest in productive sectors, create decent jobs, support skills development, increase investment in the care economy and promote the formalisation of the informal economy – an important step forward. The call for US$4 trillion in annual climate finance is also crucial. For these goals to have a meaningful impact, they must be supported by clear implementation strategies and a strong emphasis on transitioning undeclared and misclassified workers into the formal economy.
Equally important is the inclusion of a measurable target for developing countries to increase social protection coverage by at least two percentage points per year – a goal championed by the International Labour Organization (ILO). This target addresses the urgent reality that nearly half the global population lacks any form of social protection. The text also refers to ILO standards and stresses the need for predictable, adequate, and sustained financing, particularly during shocks and crises. It underscores the role of international financial mechanisms in helping low-income countries close their social protection funding gaps.
Living wages and equal pay missing
Unfortunately, the Seville conference missed an opportunity to recognise the importance of living wages, as defined by the ILO tripartite agreement on living wages, and equal pay for work of equal value. Living wages are critical for millions of workers whose daily priority is how to make ends meet. Living wages are a fundamental policy tool for achieving the SDGs. Therefore, policies on living wages and equal pay– especially efforts to close the gender pay gap – must be integrated into governments’ development strategies. This includes improving minimum wage adequacy and expanding collective bargaining.
Fiscal justice and fair taxation
The Sevilla outcome includes a clear commitment to advancing fair and progressive taxation by promoting just tax systems, improving international tax transparency, and ensuring that corporations and the ultra-wealthy contribute their fair share. While the language on the UN Framework Convention on International Tax Cooperation has been softened, the FFD4 outcome still “encourages support” for stronger global tax cooperation. This includes participating in the process toward establishing a UN Tax Convention – a key step in combating tax avoidance and building a more inclusive and equitable international tax system.
Debt architecture reform
One of the most contentious issues during the FfD4 negotiations was the future role of the UN in shaping global debt architecture. The document commits UN Member States to “initiate an intergovernmental process at the United Nations with a view to make recommendations for closing gaps in the debt architecture and exploring options to address debt sustainability”.
Trade unions will continue advocating for this process to create a permanent multilateral debt resolution mechanism under UN leadership, based on UN General Assembly resolution 69/319 of 10 September 2015, titled “Basic principles on sovereign debt restructuring processes.”
Such a mechanism must offer comprehensive debt relief, including cancellation and restructuring, for low- and middle-income countries upon request. Crucially, this relief must be free from austerity-related conditions and must support recovery, resilience, and sustainable development.
Private finance still not fit for development
While recognising that private finance has not adequately prioritised sustainable development, the Compromiso de Sevilla continues to promote the mobilisation of private capital and the use of blended finance. Moreover, it provides only vague references to voluntary monitoring and accountability mechanisms for ensuring alignment with the SDGs.
To make private finance truly support development, private actors must comply with ILO standards and uphold due diligence and responsible business conduct. This highlights the urgent need for a binding UN treaty on multinational corporations and human rights.
More and better development cooperation
Although the document reaffirms the importance of Official Development Assistance (ODA), it fails to provide specific, time-bound commitments to increase aid or ensure its effective use. This omission is especially concerning in light of widespread aid cuts. To reverse this trend, it is essential to set clear timelines and indicators for scaling up ODA, and to establish robust mechanisms that guarantee transparency, accountability, and impact.
ODA must be strategically directed to support key policies under SDG 8, including: the creation of decent jobs, full employment, social protection, occupational health and safety, quality education and lifelong learning, equal pay for work of equal value, the formalization of informal work, and decent work opportunities for migrants and youth.
Labour rights missing in international trade
In the area of trade, the document fails to commit to update World Trade Organization (WTO) rules to include labour standards. The ITUC calls for ILO core labour standards to be integrated into the WTO’s rulebook. This is based on the principle that the ILO Declaration on Fundamental Principles and Rights at Work applies to all ILO members, which are also WTO members. In this context, the ILO supervisory system should be used to assess compliance with labour standards in international trade.
Moreover, the FfD4 outcome document misses the opportunity to propose bold reforms to the investor-state dispute settlement mechanisms in trade and investment agreements.
Poor responses to climate finance and systemic shocks
In terms of systemic issues, the document lacks ambition on climate finance, failing to include an explicit commitment to phasing out fossil fuel subsidies. Likewise, it does not include ambitious targets for Special Drawing Rights (SDRs), even though such reallocations are urgently needed to anticipate and mitigate shocks related to climate, health, digitalisation and other emerging challenges.
Moreover, while the ITUC welcomes the document’s recognition of the need for governance reform at the International Monetary Fund (IMF) and the World Bank, it falls short in this area too. Although shareholding reviews are vitally important, the complete lack of accountability of these institutions to more representative institutions within the UN system is dangerous. This is particularly concerning in light of their frequent policy prescriptions, which are often harmful. Stronger accountability measures are urgently needed.
Conclusion
ITUC welcomes several elements of the Compromiso de Sevilla that reflect longstanding trade union demands. ITUC will continue to advocate for a higher level of ambition in the overall financing for development agenda, particularly regarding the urgent reform of international financial architecture, based on democracy and solidarity.
As ITUC Secretary General Luc Triangle stated: “Workers worldwide demand democratic and transparent institutions capable of delivering the New Social Contract. It is time to transform principles into action and promises into policies. The upcoming Second World Summit for Social Development offers a vital chance to raise ambition and place social justice at the core of sustainable development..”
