"AIPNEE and CEMSOJ’s joint submission on Development Finance Institutions and Human Rights to the UN" 6 March 2023

Below is the joint submission made by Asia Indigenous Peoples Network on Extractive Industries and Energy (AIPNEE) and Community Empowerment and Social Justice Network (CEMSOJ) to the UN Working Group on Business and Human Rights for their forthcoming report on “Development Finance Institutions (DFIs) and Human Rights”. The submission particularly focuses on the rights of indigenous peoples based on the experiences of AIPNEE and CEMSOJ of working with indigenous and other local communities that have faced or are facing human rights impacts due to energy and trade facilitation projects financed by various DFIs.

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DFIs’ Safeguards

The biggest challenge that we and the communities we have been working with have observed to ensure that the DFIs respect human rights in the contexts of the projects they finance is that their environmental and social framework, safeguards or standards are not in line with the international human rights standards[…]

Worse, DFIs such as the JICA and the recently established Asian Infrastructure Investment Bank (AIIB) do not even require obtaining consent of indigenous peoples for their projects affecting them. The JICA’s safeguards simply states that “efforts must be made to obtain consent of indigenous peoples in a process of free, prior and informed consultation”. The AIIB’s Environmental and Social Standard 3 on Indigenous Peoples only require engaging in Free, Prior and Informed Consultation (FPICon) for certain project activities unless FPIC is mandated by the national laws where the project is located.[…] It is not even well known if national DFIs such as the JBIC, the BOC and the Export-Import (EXIM) banks, which have been increasing their development financing, even have any environmental and social safeguards applicable for the projects they finance.

The Environmental and Social Safeguards, Standards or Framework of DFIs should be fully aligned with the international human rights law and standards, including the ILO Convention 169 and the UNDRIP in the context of the rights of indigenous peoples.[…]

Further, for a project co-financed by various DFIs, it is very difficult for the project-affected marginalized communities to understand different Safeguards/Standards of each DFI that apply to the project. […]

Access to remedy

[…]Firstly, not all DFIs, particularly national, sub-regional and regional DFIs, have established IAMs while the existing IAMs lack mandate and scope to effectively address the grievances of the affected communities to ensure their access to remedy for the project impacts. […]

Secondly, when the communities are able to file a complaint to the IAMs, many complaints are deemed ineligible for various reasons. […]

Additionally, the procedures of the IAMs are quite technical, complex and lengthy, which cause significant difficulties for the project affected communities to access them. […]

Thus, while all DFIs, including national, sub-regional, regional and international, should establish IAMs, such IAMs should be provided effective and broad mandate and scope with their full independence from the Management ensured. […]

The processes and procedures of the IAMs should be streamlined so that they are similar if not same and easy for communities to understand.[…]

Furthermore, the DFIs should themselves be liable to remedy harms caused by the projects they finance.[…]

Accountability of DFIs

At the end, we assert that since the multilateral, regional, sub-regional or national DFIs are composed by multiple or individual governments, the State duty to protect human rights should subsequently fall on the DFIs as well to some extent. […] The level of duty or responsibility of DFIs to protect or respect human rights in the context of projects they finance given their intergovernmental or governmental nature should be elaborated further.

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