Industrial Cooperation Program

The Industrial Cooperation Program is a shared-cost development program based on partnerships with the Canadian business community. It was created in 1978 to recognize the positive role that private-sector investment can have on sustainable development and poverty reduction in developing countries. The Industrial Cooperation Program acts as a bridge between commercial and developmental interests.

In general terms, the program works with Canadian firms behaving as investors seeking to put in place new joint ventures with potential local partners, or with those pursuing the development and implementation of capital projects for local clients with access to a source of financing other than CIDA.

Building on the potential for a commercially viable project and its contribution to local economic development, the Industrial Cooperation Program's other objectives in developing countries are to:

• help create employment opportunities;
• provide training and the transfer of technology;
• encourage the participation of women in such projects; and
• ensure that projects are implemented in an environmentally appropriate manner.

Audit objectives were to assess and measure the achievement of results, the efficiency and effectiveness of the management and control mechanisms and procedures, and the compliance with policies, regulations and guidelines.

CIDA audited 32 Industrial Cooperation Program projects with a total disbursement of $7.5 million. This represents 15.5% of the total 1998-99 disbursement of the Industrial Cooperation Program ($49.5 million).

The audit found that important efforts had been made by the program to measure economic benefits. However, the audit could not determine if the expected results of the program had been achieved, given that few specific targets had been defined.

In addition, the documentation supporting the progress report mechanism was found to be weak. This mechanism is used to support project monitoring.

The audit noted positive initiatives related to improving client services and enhanced coordination with other CIDA programs.

The program has an established set of policies and guidelines that generally provide an adequate operational framework, although further enhancements could be made to the cost-sharing and revenue-sharing policies. The use of "brokers" could be better defined.

Source: Internal Audit Division, Performance Review Branch