The adverse impact of World Bank policies: report

Background

This report is submitted pursuant to Human Rights Council resolution 33/3, in which the Council invited the Independent Expert to continue his research into the impact of the financial and economic policies pursued by international organizations and other institutions, in particular the World Bank and the International Monetary Fund, on a democratic and equitable international order.

Following an expert consultation hosted by the Office of the United Nations High Commissioner for Human Rights (OHCHR) in Geneva in October 2016, the Independent Expert decided to focus his report to the Council on the World Bank, and to devote his report to the General Assembly to International Monetary Fund (IMF) issues. The two reports should be read together, conscious that in the twenty-first century there are no "human rights-free zones", that all States, international organizations and non-State actors must respect the customary international law of human rights, and that the so-called "fragmentation" of international law cannot create "stand-alone regimes" or "legal black holes".

Summary

While international financial institutions can advance human rights and development, some of their policies have resulted in the erosion of the enabling human rights environment in some countries, especially through the promotion of neoliberal policies that weaken the public sector and hinder States in the fulfilment of their human rights treaty obligations in the fields of education, health care, labour standards and an adequate standard of living.

Moreover, by financing enterprises that evade taxes, the World Bank abets the diversion of public resources away from public services. Increased Bank support for public-private partnerships enhances the private sector at the expense of communities, especially when investments go awry and result in greater costs to governments. Henceforth, international financial institutions should take a human rights-based approach to lending, consult stakeholders, conduct impact assessments, take action to counter reprisals, combat corruption and accept legal responsibilities by waiving "absolute immunity".

The Independent Expert believes that, since the World Bank and IMF have association agreements with the United Nations, they must support the General Assembly, the Economic and Social Council and the United Nations Conference on Trade and Development (UNCTAD) in advancing the purposes and principles of the United Nations, as set out in the Charter of the United Nations, and in advancing human rights and sustainable development, while respecting the sovereign equality of States and the principle of non-intervention in the domestic affairs of States.