Minister for Foreign Trade and Development Lenita Toivakka, photo: Paula Myöhänen

FINNWATCH Press release 17th August 2015

The Finnish Ministry of Finance published on Friday 14th August a budget proposal for 2016, confirming a freeze to the fund that has been a source of income to the internationally known corporate watchdog, Finnwatch.

The freeze to the fund targeted at development communications and global education was proposed by the Ministry for Foreign Affairs. In total, Finland is cutting the funding of development organisations by 43 per cent (49 million euros).

At the same time the Finnish government has announced that 100 million euros of development cooperation expenditure will be used to capitalize the Finnish Fund for Industrial Cooperation Finnfund. Finnfund invests in company projects in developing countries that are in the interest of Finnish companies.

The cuts to the funding of development organisations have been met with stark criticism, amplified by the fact that Finnfund had asked only for 40 million euros. The cuts are made without allowing for a gradual transition, and they are not grounded on any assessments of impact; indeed, the Ministry for Foreign Affairs has said that evaluations will be made after the implementation.

– The new Finnish government want to promote export and investment in developing countries by Finnish companies and seem to have pushed corporate responsibility aside. The government have chosen to further these goals at the expense of civil society organisations, human rights watchdogs and those that campaign against tax havens, said Sonja Vartiala, Finnwatch's executive director.

Finnwatch, Finland's only corporate responsibility watchdog, monitors the operations of Finnish companies in developing countries. Its internationally well-received investigations have brought to light problems in the palm oil purchases of the Finnish government owned Neste, for example. The organisation has also been monitoring working conditions in Thai export industries, and an ongoing criminal defamation case against one of its researchers in Thailand has recently been in the headlines. In Finland, Finnwatch has been vocal in its opposition to tax avoidance and drawn attention to aggressive corporate tax planning and investment of public pension funds in tax havens.

The funding of organisations working on corporate responsibility has been exceptionally low in Finland compared to many other European countries.

– In the national action plan to implement UN Guiding Principles on Business and Human Rights, Finland's previous government made a commitment to fund corporate responsibility organisations. This slashing of the funding is a complete u-turn in the Finnish policy.

Government funding for Finnwatch's research work has been around 60 000 euros annually.

– Independent and critical civil society is a cornerstone of a functioning democracy. Finland has been known for upholding human rights and equality – these cuts are a stain in that image and a big step backwards, said Vartiala.

The government's budget proposal will still need to be approved by the Finnish parliament. Finnwatch hopes that the parliament will address the imbalance between the funds allocated to Finnfund and those cut from the civil society organisations.

Additional information:
Sonja Vartiala
+358-44-5687465
This email address is being protected from spambots. You need JavaScript enabled to view it.

Tämä teos, jonka tekijä on Finnwatch, on lisensoitu Creative Commons Nimeä-EiKaupallinen-EiMuutoksia 4.0 Kansainvälinen -lisenssillä.