Statement of the Independent Expert on International Order at 36th session of the Human Rights Council

Geneva, 13 September 2017

Distinguished Chair,
Excellencies,
Ladies and gentlemen,

Pursuant to resolution 18/6 of 29 September 2011, this Council created the mandate of the Independent Expert on the promotion of a democratic and equitable international order, a universal goal that had already found expression in numerous General Assembly and Commission on Human Rights Resolutions following the historic GA resolution 3201 (S-VI) of 1 May 1974 on the Establishment of a New International Economic Order.

As the first mandate-holder—assuming my tasks in May 2012—I have had the privilege to write twelve reports that address cross-cutting human rights issues, including various models of democracy, the right of self-determination, the social responsibility of business enterprises, bilateral investment treaties, free trade agreements, military expenditures, tax evasion, tax havens,  the human rights impacts of the activities of international financial institutions, and the reform of the Security Council .

The universal scope of the mandate has proven particularly suitable to demonstrate the interdependence and inter-relatedness of civil, cultural, economic, political and social rights, as proclaimed in the Vienna Declaration and Programme of Action and numerous Human Rights Council resolutions.  The challenge has been to formulate pragmatic recommendations on how best to advance toward a more peaceful, inclusive, democratic and equitable international order, based on the Purposes and Principles of the United Nations Charter, the constitutions of UNESCO, of the International Labour Organization and other binding agreements.

My twelve reports evidence the added value of the mandate as a holistic directive to cast human rights in a coherent framework that invites cross-fertilization with other mandates. My reports have endeavoured to build on the findings and recommendations of other mandate-holders including those on international solidarity, sanctions regimes, extreme poverty and illicit financial flows. My reports have endorsed new standard-setting initiatives such as the declaration on the right to peace , the declaration on the rights of peasants , a binding legal instrument on the social responsibility of transnational enterprises , a global bill of rights, an international court on human rights and the creation of a world parliamentary assembly .

In the future, the mandate-holder may wish to address the impact on a democratic and equitable international order of global challenges such as climate change, the sustainable development goals, cultural imperialism, economic neo-colonialism, commodities speculation, vulture funds, and the unregulated activities of transnational corporations, credit rating agencies and media conglomerates.  My reports have shown democratic deficits in many fields of international endeavour.  It bears repeating that any exercise of power, particularly economic power, should be subjected to some kind of democratic controls.

The present report responds to the invitation by this Council to continue my research into the human rights impacts of the activities of international financial institutions (Res. 33/3). Accordingly, this report focuses on the policies of the World Bank Group. The report to the General Assembly (A/72/187) is devoted to the International Monetary Fund and its loan conditionalities (GA resolution 71/190). Both reports should be read together.

The Bretton Woods institutions were founded in 1944, even before the San Francisco Conference that adopted the United Nations Charter. While the International Bank for Reconstruction and Development, otherwise known as the World Bank, and the IMF both have association agreements with the United Nations, they operate independently from – and not always in tandem with -- the General Assembly, Security Council, ECOSOC, UNCTAD and other UN organs. 

In my reports, I call on both the World Bank and the IMF to amend their Articles of Agreement so as to participate more fully in the achievement of the Purposes and Principles of the United Nations. Indeed, sometimes the activities of the international financial institutions do enter into conflict with the human rights and development goals of the United Nations, an anomaly that must be changed sooner rather than later. In particular, article IV, section 10, of the World Bank’s Articles of Agreement, the so-called prohibition of “political activity” is often cited as preventing the Bank from integrating human rights considerations into its work.

There is no reason to consider the promotion of human rights as falling under this prohibition. But since some officials at the World Bank still refer to it, the Articles of Agreement should now be updated and brought into the 21st century, so that human rights considerations are no longer perceived as conflicting with the economic priorities of the institutions.

Neither the World Bank nor the IMF can escape the international human rights treaty regime, much of which, by 2017, has surely emerged as customary international law. Indeed, all States members of the World Bank and IMF are bound by provisions of numerous human rights treaties, including the International Covenant on Civil and Political Rights and the International Covenant on Economic, Social and Cultural Rights. As UN Member States, all Bank Members are also individually bound by the UN Charter, and required to uphold the Purposes and Principles of the United Nations. Member States and Observer States of the Human Rights Council should prevail upon the international financial institutions to live up to the human rights expectations that flow from these instruments.  Indeed, there are no longer any human-rights-free zones. 

Whereas the World Bank has the word “Development” in its name, what does this mean in law and practice? Hitherto the Bank has understood development as growth in terms of GDP, increased trade and greater consumption. In my report I endorse  an understanding of “development” as an improved standard of living, food security, clean water, sanitation, healthcare, housing, education, a level playing field, equal pay for equal work, and a more equitable distribution of wealth in larger freedom. Alas, we observe instead that the inequalities among States and within States have been growing,

For many years, civil society has signalled human rights abuses committed by companies benefitting from World Bank financing. Non-governmental organizations including Human Rights Watch, Inclusive Development International, the Oakland Institute, Oxfam, the International Consortium of Investigative Journalists, Action for Solidarity Environment Equality and Diversity-Europe, the NGO Forum on the Asian Development Bank, Social Justice Connection, Amnesty International, the Bretton Woods Project, Earth Rights International and many others have issued expert publications that document these abuses. Among the most egregious violations are land-grabbing, brutal evictions, involuntary resettlement, forced labour, child labour, sexual abuse, massive pollution, destruction of the environment, reliance on tax havens, corruption and money-laundering.  My report summarizes a few salient cases which are representative of widespread violations.

I also highlight concerns about the Bank’s promotion of public-private partnerships, notwithstanding evidence showing that these partnerships often do not  benefit the public. Although seen as a solution to constrained State budgets, such partnerships can result in encroachments by the private sector into the policy space of governments. When services delivered are of low quality, correspond to the interests of private partners instead of to the needs of the public, or when the projects fall through at great cost to governments, it is communities that suffer because their rights to water and sanitation, health care and education go unfulfilled.

Beyond the direct harm caused by some World Bank projects, I also take note of reports that the Bank has been funding harmful projects indirectly, through intermediary banks. Some of these projects would not ordinarily meet the Bank’s own operational standards, either because the projects at issue result in serious environmental degradation or because the contracted companies have a history of complicity in grave human rights violations. 

Finally, the Bank must concern itself with cases of reprisals against those who have opposed Bank projects. This is an issue that has been raised by the High Commissioner for Human Rights, by other Special Procedures mandate holders, and also by civil society. It bears repeating that communities must not be prevented from raising concerns about ineffective and harmful projects, especially when such projects threaten their environment and livelihoods, or otherwise violate their rights. 

All this said, I acknowledge a number of positive features in the World Bank’s practice that should be enhanced to build a human rights-based approach to inclusive development. 

For example, I applaud the World Bank for its recent report highlighting the unequal access of populations to water, sanitation and adequate hygiene and for tying this inequality to the realization of the sustainable development goals.

In addition, in April 2017 I had the opportunity to attend several events held during the spring meetings of the World Bank and IMF in Washington, where I also met with lawyers and economists of both institutions as well as with representatives of civil society. I was pleased to observe a heightened awareness of human rights issues and a positive attitude toward preventing the negative impacts of the Bank’s current lending practices, mega-projects, public-private partnerships and austerity conditionalities. In particular, I see promise in the World Bank’s new Environmental and Social Framework, which sets out social standards against which projects are to be evaluated, including those related to labour conditions, environmental impacts, preservation of natural resources and the protection of indigenous peoples and cultural heritage. The chapter devoted to indigenous populations is particularly necessary—and should be further strengthened—given that indigenous communities have been despoiled of their natural resources for centuries and have had their livelihoods devastated by the destruction of their environment, land-grabbing and involuntary resettlement in violation of their right to free, prior and informed consent, as laid down in the Declaration on the Rights of Indigenous Peoples.

During the 2017 World Bank Spring meeting, I also had the opportunity to discuss monitoring and redress mechanisms with senior staff of the Bank’s Inspection Panel and Compliance Advisor Ombudsman, two mechanisms whose excellent work should be given greater visibility and whose findings deserve expeditious implementation. The Inspection Panel receives complaints from individuals who believe they have been, or are likely to be, harmed by a Bank-financed project. It has also begun producing an “Emerging Lessons” series, which is a series of reports that highlight historically problematic issues drawn from the Panel’s past cases. In my report, I also welcome the work of the Ombudsman, which is an internal accountability mechanism conducting independent investigations of the Bank’s private sector activities. These mechanisms should be further strengthened, since they don’t, in themselves, have enforcement power. To that end, I recommend that the World Bank take prompt and effective action consistent with the findings of these monitoring bodies, and that it widely disseminate their recommendations inside and outside the Bank. It is also imperative that victims are made aware of how to utilize these redress mechanisms.

Beyond amending its Articles of Agreement, I recommend in my report that the World Bank take full responsibility for the outcomes of its investments and implement preventive measures, including by conducting systematic human rights, health and environmental impact assessments before projects are approved. The Bank should ensure corrective measures with the effective participation by all stakeholders and protection of human rights defenders on the ground. Financing should be suspended when serious human rights violations occur, and no project affecting the lives and culture of indigenous peoples should be approved without the free, prior and informed consent of the peoples concerned. Further, when Bank-financed projects result in violations, victims must be ensured  both recourse and effective remedy.

Procedurally, one of the challenges that must be addressed is the World Bank’s undemocratic decision-making structure, which creates inequitable and sometimes counterproductive priority setting. Thus, the gentleman’s agreement that World Bank leadership will be held by citizens of certain states should be gradually phased out. Further, as other rapporteurs have noted, the underrepresented voices of the developing world must be upgraded.

I further propose that the World Bank embark on an inclusive process for drafting a new and separate human rights policy, which should embody a commitment to integrate human rights into its work by analysing human rights issues relevant to development in the context of country strategies, advise governments how to advance compliance with their human rights commitments, and identify human rights risks linked to its investments or advice. The Bank’s Board of Directors should issue directives that mainstream human rights into the Bank’s manifold activities. I also recommend that the Bank enhance cooperation with international organizations, such as ECOSOC, UNCTAD, the ILO, UNESCO and UNICEF, which have proposed plans of action to advance development and human rights.

In particular, the Bank should adopt and implement the Universal Social Protection Initiative and the ILO’s Social Protection Floors Recommendation No. 202.   It should support the inclusion of enforceable labour provisions based on ILO standards, and repeal investor-state-dispute settlement mechanisms that undermine governments’ right to regulate.  

Excellencies,

The challenges to a democratic and equitable international order, as envisaged by this Council in September 2011, are numerous and require the cooperation and solidarity of all international institutions, including the international financial institutions. To meet these challenges—and to achieve the Sustainable Development Goals—I call on the World Bank to make the protection of human rights a core characteristic of its policy and practice.

My principal recommendations to the IMF likewise entail a paradigm change away from the outdated conditionalities of privatization, deregulation of markets, and “austerity” in social services, which in the past have engendered human rights violations. Henceforth, the IMF should make loans subject to a new set of flexible conditions, including:

• A moratorium on military expenditure (except for salaries and pensions) for the duration of the loan;
• Adoption of national legislation that ensures that national and transnational corporations pay their taxes, prohibits profit-shifting, and outlaws tax havens;
• Adoption of General Anti-Avoidance Rule legislation to address specific base erosion and profit shifting concerns;
• Adoption of legislation imposing fines on persons and corporations which evade taxes and obliging citizens who have moneys hidden offshore to repatriate their wealth within a defined period of time, or otherwise face the risk of penal sanctions;
• Adoption of legislation to prevent corruption and bribes, accompanied by effective monitoring mechanisms;
• Enactment of financial transactions tax legislation; and
• Assurances by the borrower State that no part of any loan is used to satisfy claims by vulture funds or hold-outs.

Mr. President,
Ladies and gentlemen,

Allow me, in conclusion, to pay tribute to the hard-working staff of the Office of the High Commissioner for Human Rights and to appeal to all Human Rights Council Member States and Observer States to prevail upon the General Assembly to assign greater funds to OHCHR.

I thank you.

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