Responsible Business Conduct – an Engine for Lao PDR’s Smooth and Resilient LDC Graduation

March 27, 2023

Ministries, businesses, trade unions, civil society, academia, the UN, and development partners came together as part of the 4th Forum on Responsible Business Conduct in Lao PDR.

Lou Sensouphone, UNDP Lao PDR

Vientiane, 24 March 2023 – The Ministry of Industry and Commerce (MoIC), Embassy of Canada and the United Nations Development Programme (UNDP) co-hosted the 4th Forum on Responsible Business Conduct (RBC) to discuss trends, benefits, and barriers for upholding international RBC standards in Lao PDR. 


Over the last decade, Lao PDR has been one of the fastest-growing economies in ASEAN and the 13th fastest-growing economy globally, recording an average annual growth of around 8 percent. By reaching the UN’s three socio-economic criteria, Lao PDR officially qualified to graduate from the Least Developed Countries (LDC) category in 2021 and will become a developing country by 2026. 


While business activity has underpinned much of Lao PDR’s economic growth and paved the way to the country’s LDC graduation, it has often been at the expense of environmental resources and has placed increased pressure on upholding labour standards. Increasing water and air pollution, biodiversity destruction, community relocations, unsafe working conditions, and unequal pay by businesses acting irresponsibly have directly and indirectly affected many people’s everyday lives. 


To ensure business activity continues to drive Lao PDR’s economic development and LDC graduation without compromising the environment and people’s well-being, it is critical that the Government and businesses embrace RBC.  


“An imperative for LDC graduation is a country’s resilience in the face of economic shocks and adaptation to a changing global context. To ensure Lao PDR does not slip back to LDC status after graduation, the 2022 National LDC Graduation Strategy prioritizes diversification of international exports, both in terms of commodities and markets, the attraction of high-quality investments, and the sustainable management of natural resources during and beyond the graduation period,” Mr. Sengphanomchone Inthasane, Deputy Director General of the Department of Planning and Cooperation, MoIC, emphasized. “With the growing number of large markets adopting mandatory corporate due diligence laws and foreign investors increasingly interested in businesses with reduced environmental and social footprints, it is important for the Government and private sector to advance the RBC agenda.” 


For governments, RBC means developing and enforcing robust laws and policies to regulate business activity, while for businesses, RBC entails assessing their impact on the environment and society, taking measures to prevent adverse impacts, and providing remedies when negative impacts occur. 


“RBC is a priority for Canada. Our new RBC Strategy encourages Canadian companies, home and abroad, to do business while respecting the human rights of their workers, suppliers, consumers, and communities, protecting the environment, and advocating for gender equality,” Mr. Bob Paquin, Chargé D’Affaires, Office of the Embassy of Canada in Lao PDR, shared. “According to the Strategy, business activity of Canadian companies abroad, including in Lao PDR, should go beyond compliance with national laws and regulations, aligning their practices with international standards, including international labour law, international environmental law, and international human rights law.” 


The RBC Forum provided a platform for Government and non-governmental stakeholders to discuss international RBC standards and explore ideas and approaches for their implementation at both policy and operations levels in Lao PDR. The UN Guiding Principles (UNGPs) on Business and Human Rights are the key international RBC standard and roadmap for Lao PDR’s LDC graduation and ongoing resilience, with many countries already taking opportunities to translate the UNGPs into National Action Plans (NAPs).  


“A NAP with clear Government priorities to align laws, policies, and practices with the UNGPs is a powerful tool to spawn investor interest, improve access to promising new markets, and generate new revenue,” Ms. Ricarda Rieger, Resident Representative, UNDP, said. “UNDP has supported the initiation and development of such NAPs across all regions, including in Bangladesh and Nepal, which are also set to graduate from LDC status in 2026. We look forward to supporting the Government of Lao PDR in this process to ensure it meets its graduation ambition.” 


This 4th RBC Forum followed the Canadian-led series of RBC events and was conducted in the framework of the project “Improving Performance, Accountability, Conduct, and Transparency of Business in Lao PDR”, also known as IMPACT Biz, implemented by the Ministry of Industry and Commerce and UNDP, with support from the Government of Japan.  


The event gathered more than 100 participants from Government agencies, national and international businesses, trade unions, civil society, academia, the UN, and development partners. 



For more information, please contact:  

Ms. Aksonethip Somvorachit 

Communications Analyst, UNDP 


Ms. Sinsavanh Sonepaseuth 

Communications and Outreach Officer for Governance, UNDP 


Ms. Maeve Milligan 

Junior Political and Public Affairs Officer 

Office of the Embassy of Canada