"Development finance institutions and human rights"

Report of the Working Group on the issue of human rights and transnational corporations and other business enterprises

Summary

In the present report, submitted to the Human Rights Council pursuant to Council resolutions 17/4 and 44/15, the Working Group on the issue of human rights and transnational corporations and other business enterprises clarifies the ways in which the “United Nations Guiding Principles on Business and Human Rights: Implementing the United Nations ‘Protect, Respect and Remedy’ Framework” apply to development finance institutions. The report examines the gaps, opportunities, and positive practice examples when it comes to applying human rights due diligence to development finance institutions, and what remedy means in the context of development finance. [...]

A. Recommendations

74. States:

(a) Strengthen human rights awareness and understanding among development finance institutions and train them in human rights due diligence;

(b) Have regulations and provide clear guidance to development finance institutions about their responsibilities in relation to their human rights, environmental, and climate change impacts, consistent with the Guiding Principles;

(c) Include requirements for all development finance institutions to have grievance mechanisms for each development finance institution itself and all their clients, and to provide for appropriate and effective access to remedy;

(d) Cooperate with other States to ensure that appropriate and effective remedies are available to rights-holders impacted by development finance institution activities.

75. Development finance institutions:

(a) Adopt and incorporate the United Nations Guiding Principles on Business and Human Rights in environmental and social frameworks and related policies;

(b) Develop and implement human rights due diligence policies and processes throughout their operations and ensure that an intersectional perspective is integrated into these policies and processes. In so doing, it is important that human rights risks are analysed and monitored throughout a project life cycle and adapted to the sector, context, project, and clients;

(c) Continually update human rights due diligence policies and processes by engaging in open and context-sensitive multi-stakeholder dialogue and consultations, including with stakeholders affected by development projects, human rights defenders, Indigenous Peoples, marginalised groups, and other groups at risk;

(d) Ensure that project information is publicly available and, in particular, disseminated to all relevant stakeholders in a timely manner;

(e) Publicly commit to the protection of human rights defenders;

(f) Use leverage in business relationships to promote and ensure respect for human rights;

(g) Require clients to:

(i) Improve their own human rights due diligence policies and processes; and

(ii) pay particular attention to groups in vulnerable situations, including through complying with the principle of free, prior and informed consent with respect to Indigenous Peoples;

(h) Support clients and their existing or potential business partners, particularly small and medium-sized enterprises, to improve the human rights and environmental conditions in their operations;

(i) Design and implement operational-level grievance mechanisms that address the risks faced by stakeholders adversely affected by development projects, in ways that protect their confidentiality, prevent reprisals and retaliation, and offer effective remedies;

(j) Establish remedy funds to address adverse human rights impacts from projects;

(k) Engage in global and regional standards-setting through stronger collaboration between multilateral and bilateral development finance institutions;

(l) Develop and support awareness-raising activities and capacity development initiatives to enhance the protection and realization of human rights.