Policy on Due Diligence and Partnerships with the Private Sector

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Policy on Due Diligence and Partnerships with the Private Sector

Policy on Due Diligence and Partnerships with the Private Sector

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About this policy

The purpose of this policy is to facilitate and guide risk informed decisions in the selection of private sector partners and the formulation of partnerships in such a way that enables effective and creative collaboration, while maintaining a principled approach that manages risks and ensures the integrity and independence of UNDP. The policy sets out UNDP’s criteria for assessing and selecting partners and principles to guide the responsible engagement of UNDP in these partnerships.

Latest updates

April 09, 2024 - The Policy on Due Diligence and Partnerships with the Private Sector has been updated to include the following changes:

references to portfolio in alignment with the recently introduced new Portfolio Policy;
an update to para. 4.9 on crisis settings, as recommended by the Risk Committee that the quality assurance over the due diligence process, and the decision-making on which private sector partnerships to pursue with the private sector, can be made by the relevant Bureau Director or by the Crisis Board, with the same requirement for monitoring as non-crisis settings.

The Private Sector Risk Assessment Tool has been updated to reflect the following changes:

in

April 09, 2024 - The Policy on Due Diligence and Partnerships with the Private Sector has been updated to include the following changes:

references to portfolio in alignment with the recently introduced new Portfolio Policy;
an update to para. 4.9 on crisis settings, as recommended by the Risk Committee that the quality assurance over the due diligence process, and the decision-making on which private sector partnerships to pursue with the private sector, can be made by the relevant Bureau Director or by the Crisis Board, with the same requirement for monitoring as non-crisis settings.

The Private Sector Risk Assessment Tool has been updated to reflect the following changes:

include references to portfolio in alignment with the recently introduced new Portfolio Policy;
include a field for partnership description;
update the links to AML/CFT self-certification for donor entities and for programming entities;
update the link to the risk log in the POPP to harmonize with the requirement of the Enterprise Risk Management policy and procedures;
include co-branding corporate requirements under communications;
implement light formatting and language clean-up.

The following content is now available in French and in Spanish:

Policy on Due Diligence and Partnerships with the Private Sector: French | Spanish
Private Sector Risk Assessment Tool: French | Spanish
Conducting due diligence for private sector entities procedure: French | Spanish

October 12, 2023 - This policy revision, approved by OPG in late August 2023, underlines a robust and decentralized approach to risk assessment, decision making, management and escalation, based on the risk levels, aligning with UNDP's Enterprise Risk Management policy and framework. All business units at HQ, Regional and CO levels, are now required to appoint PSDD focal points and establish PSDD committees to advise, quality assure and extend technical support and oversight on the application of the policy and quality of the risk assessment undertaken. The policy now offers four (instead of two) risk levels - Low, Moderate, Substantial and High, with updated due diligence requirements - Basic, Standard and Enhanced determined by the type of legal agreement, and the type of private sector entity. The policy also includes monitoring protocols, spot checks of the due diligence process as well as the inclusion of Anti Money Laundering/Countering Financing of Terrorism Self Certification in the Risk Assessment Tool (RAT).

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Relevant Regulations and Rules

UNDP Financial Regulations and Rules
Guidelines on a principle-based approach to the cooperation between the United Nations and the Business Sector
UNDP Strategic Plan 2022-2025

Policies

Main Policy

Policy on Due Diligence and Partnerships with the Private Sector

DOCX (262.42 KB)

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Related Policies

Private Sector Partnerships
Enterprise Risk Management
Anti-Money Laundering and Countering the Financing of Terrorism Policy

Procedures

Main Procedures

1

Steps

Conduct due diligence and complete the mandatory Risk Assessment Tool (RAT)

Responsible Party

Programme/project manager of the unit initiating the partnership ensures the risk assessment is done in an appropriate manner

Template/Guideline

Private Sector Risk Assessment Tool

Download

Explanatory Notes

The Business Unit Initiating the partnership, conducts analysis, completes the RAT and makes a recommendation to engage or refrain from engaging. Refer to Private Sector Resource Mobilization for additional information.

2

Steps

Develop risk log, monitoring plan and communications material

Responsible Party

Initiating Business Unit – Project/Programme Manager

Template/Guideline

Risk Management

Explanatory Notes

Document the identified risks into a risk log. If the partnership is part of a project that already has a risk log, these risks can be added into the existing mechanism. In low-risk and short-term partnerships the project manager may decide that a risk log is not needed.
Monitoring activities to screen publicly available information relating to the partner and the industry as well as assessing whether the partner is meeting the conditions (if any) of the partnership.
The communications materials covers the basic details about the partnership and should address the main risks identified during the risk assessment process

3

Steps

Decision making

Responsible Party

For Low-Risk: RR for CO level partnerships; relevant Bureau Director for regional and global level partnerships,

For Moderate/Substantial Risk: Relevant Bureau Director for CO, regional and global level partnership,

For High-Risk: Corporate Risk Committee

Template/Guideline

Explanatory Notes

For moderate, substantial and high risk cases the CO, Regional or HQ PSDD Committee provides quality assurance and advisory support to the relevant decision maker.

See HQ Private Sector Due Diligence Committee Archives.

Refer to Policy on Due Diligence and Partnerships with the Private Sector for further clarification.

4

Steps

Upload signed Risk Assessment Tool

Responsible Party

Initiating Business Unit – Project/Programme Manager

Template/Guideline

Explanatory Notes

Upload completed and signed Risk Assessment tool in the Private Sector Due Diligence Data base

5

Steps

Monitoring the partnership, managing risks, reporting

Responsible Party

Initiating Business Unit – Project/Programme Manager

Template/Guideline

Explanatory Notes

Initiating business unit conducts monitoring on a regular basis.

Refer to Policy on Due Diligence and Partnerships with the Private Sector for further clarification.

6

Steps

Spot-check

Responsible Party

La Oficina Regional competente para la Diligencia Debida llevada a cabo por la Oficina Nacional,

BPPS Effectiveness Group will organize independent assessment for Due Diligence conducted by Regional and Central Bureaus

Template/Guideline

Explanatory Notes

Refer to Policy on Due Diligence and Partnerships with the Private Sector for further clarification.

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