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At the 36th session of the United Nations Human Rights Council in September 2017 I presented my report on the World Bank and international order.  The report formulates pragmatic recommendations how best to align the policies ot the WB to the purposes and principles of the United Nations.  I call on the WB to amend its constitution and to deliver on its promises concerning human rights and the environment.


Statement of

Mr. Alfred-Maurice de Zayas

Independent Expert on the promotion of a democratic and equitable international order

Human Rights Council 36th Session

Geneva, 12 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 on the Establishment of a New International Economic Order.

As the first mandate-holder, 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[1].

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.

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[2], the declaration on the rights of peasants[3], a binding legal instrument on the social responsibility of transnational enterprises[4], the criminalization of environmental destruction[5], a global bill of rights,[6] an international court on human rights[7] and the creation of a world parliamentary assembly[8].

A future mandate-holder may wish to address the impact on a democratic and equitable international order of the G7, G20, the World Economic Forum, global challenges such as climate change, 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 multiple areas.  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[9]. Accordingly, this report focuses on the policies of the World Bank Group. The report to the General Assembly[10] is devoted to the International Monetary Fund and its loan conditionalities[11]. Both reports should be read together.

The Bretton Woods institutions were founded in 1944, even before the San Francisco Conference and the adoption of the United Nations Charter. While the International Bank for Reconstruction and Development 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 better serve the Purposes and Principles of the United Nations. Indeed, sometimes the activities of the international financial institutions enter into conflict with the human rights and development goals of the United Nations.  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

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. 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, human-rights-free zones are obsolete..

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 a higher 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 are 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, the Oakland Institute, Oxfam, the International Consortium of Investigative Journalists, 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.

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 could 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 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 expanded to a human rights-based approach to inclusive development.

For example, I applaud the World Bank for its recent report[12] 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 attended several events 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 opportune, given that indigenous communities have been despoiled of their natural resources and have had their livelihoods devastated by 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 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 publishing an “Emerging Lessons” series, highlighting 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 be 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 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. The Bank should better coordinate with international organizations such as ECOSOC, UNCTAD, the ILO, WHO, UNESCO and UNICEF.

In particular, the Bank should adopt and implement the Universal Social Protection Initiative and the ILO’s Social Protection Floors Recommendation No. 202.[13]  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.[14]

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

  1. A moratorium on military expenditures for the duration of the loan;
  2. Adoption of national legislation that prohibits profit-shifting, outlaws tax havens and ensures that individuals, corporations and transnational enterprises pay their taxes;
  3. Adoption of legislation to prevent corruption and bribes, accompanied by effective monitoring mechanisms;
  4. Enactment of a financial transactions tax; and
  5. Assurances by the borrower State that no part of any loan is used to satisfy claims by vulture funds or hold-outs.

Excellencies,

The challenges to a democratic and equitable international order, as envisaged by this Council, are numerous and require the cooperation and solidarity of all international institutions, including the international financial institutions.

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 the Office.

I thank you.

[1] 2013 report to the General Assembly. http://www.ohchr.org/Documents/Issues/IntOrder/A-68-284_en.pdf, paras. 16 et seq.

[2] General Assembly Resolution 19 December 2016 A/RES/71/189

[3] http://www.ohchr.org/EN/HRBodies/HRC/RuralAreas/Pages/4thSession.aspx

[4] http://www.ohchr.org/EN/HRBodies/HRC/WGTransCorp/Session2/Pages/Session2.aspx

[5] http://www.ohchr.org/AR/NewsEvents/Pages/DisplayNews.aspx?NewsID=14340&LangID=E

[6] http://www.uniteforrights.org

[7] http://acuns.org/the-workable-world-trust-creating-a-workable-world-conference-october-9-10-2015/

https://dezayasalfred.wordpress.com/2015/11/26/creating-a-workable-world-october-2015/

[8] http://en.unpacampaign.org/394/uns-independent-expert-alfred-de-zayas-time-for-a-world-parliamentary-assembly/

[9] Resolution 33/3

[10] A/72/187

[11] GA Resolution 71/190.

[12] http://documents.worldbank.org/curated/en/633171503631095871/Reducing-inequalities-in-water-supply-sanitation-and-hygiene-in-the-era-of-the-sustainable-development-goals-executive-summary

[13]http://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:12100:0::NO::P12100_ILO_CODE:R202

[14] A/HRC/30/44, A/HRC/33/40

 

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