Mobilising financial resources to achieve sustainable development has been a priority for the international community over the last decades. Development finance institutions (DFIs), including national development banks (e.g. the Netherlands Development Finance Company, the Dutch Investment Fund for Developing Countries), multilateral development banks (e.g. the World Bank Group, the Inter-American Development Bank, the Asian Infrastructure Investment Bank) and global funds and instruments (the Green Climate Fund), have a broad mandate to contribute to sustainable development and combat poverty particularly in low- and middle-income countries. Following the adoption of the 2030 Agenda, these institutions have been called upon to accelerate efforts to achieve the Sustainable Development Goals, including by leveraging private investment and prioritizing green finance.
The 2030 Agenda aims at “unlocking the transformative potential of (…) the private sector, and incentivizing changes in financing as well as consumption and production patterns to support sustainable development.” The Addis Ababa Agenda for Action (AAAA) also outlines actions for financing of the SDGs. Development finance institutions (DFIs) can be important contributor towards the realisation of many aspects of the 2030 Agenda.
SDG 17 (partnerships for the SDGs), in conjunction with the AAAA, details the Means of Implementation for the 2030 Agenda, including finance. A recent publication by the Danish Institute for Human Rights calls for a human rights based approach to the Means of Implementation of the Sustainable Development Goals. While the finance gap (between the funds available and the funds required to realise the 2030 Agenda) is yet to be closed, there are multiple sources of investment in SDG implementation from development finance institutions. There is also an upsurge in so-called blended finance instruments (blending public and private funds), as development banks often do.
Development Finance Institutions can also contribute to women empowerment, gender equality and women in leadership with their investments. In 2018, 14 development finance institutions, including Deutsche Investitions- und Entwicklungsgesellschaft, jointly launched the “Gender Finance Collaborative” to increase the impact of investment capital provided by the DFIs toward women as entrepreneurs, fund leaders, employees and consumers.
Whereas the growth and innovation around financing presents opportunities for businesses and private investors, it also requires strong policy underpinning and monitoring to ensure that financing for development will indeed transform societies and realise human rights, including amongst the poorest.
National and multilateral development banks are usually majority-owned by governments and capitalized with public funds, which enhances their creditworthiness when raising money on the international capital markets. They provide a variety of financial and technical services to both states and private sector enterprises: grants, loans, guarantees, equity investment, lending through financial intermediaries, and blended instruments such as public-private partnerships.
The responsibility to respect human rights extends to national and international DFIs. Given their dual nature as state institutions – owned by state shareholders – and business enterprises – operating as banks, investors, fund managers –, both Pillar 1 and 2 of the UN Guiding Principle on Business and Human Rights (UNGPs) are applicable to their policies, conduct and activities.
For more information on how best to integrate human rights in SDG financing, especially in the context of SDG 17 (Revitalise the Global Partnership for Sustainable Development), see the Danish Institute for Human Rights’ Means of Implementation.+ Read more
According to UNGP 4 & 10, States should take additional measures to protect against human rights abuses linked to national and multilateral DFIs:
“States should take additional steps to protect against human rights abuses by business enterprises that are owned or controlled by the State, or that receive substantial support and services from State agencies such as export credit agencies and official investment insurance or guarantee agencies, including, where appropriate, by requiring human rights due diligence.”
“States, when acting as members of multilateral institutions that deal with business-related issues, should: (a) Seek to ensure that those institutions neither restrain the ability of their member States to meet their duty to protect nor hinder business enterprises from respecting human rights; (b) Encourage those institutions, within their respective mandates and capacities, to promote business respect for human rights and, where requested, to help States meet their duty to protect against human rights abuse by business enterprises, including through technical assistance, capacity-building and awareness-raising; (c) Draw on these Guiding Principles to promote shared understanding and advance international cooperation in the management of business and human rights challenges.”
According to UNGP 17 and 22, DFIs have a responsibility to conduct human rights due diligence and establish effective remedial mechanisms. This responsibility has been reinforced by states in the context of the Addis Ababa Agenda on Financing for Development:
“(…) we encourage all development banks to establish or maintain social and environmental safeguards systems, including on human rights, gender equality and women’s empowerment, that are transparent, effective, efficient and time-sensitive.”(para 75)
For more than two decades, a growing number of financial institutions have sought to address environmental and social risks connected to their financing through the adoption of environmental and social safeguards and complaints/accountability mechanisms open to project- affected stakeholders.
The World Bank has adopted a series of policies and documents in respect to Access to Information (2015), Environmental Assessment (2013), Involuntary Resettlement (2013), Indigenous Peoples (2013) and Safety of Dams (1996) that are connected to projects it finances. Their Access to Information policy, for example, requires that the Bank makes public any information in its possession that is not on a clear list of exception, thus, making much more information available on key decisions made during project development and implementation. In 2012 the International Finance Corporation adopted a revised series of standards to help its clients improve their business performance, enhance transparency, engage with the people affected to projects with IFC finance, protect the environment, and achieve greater development impact. Eight Performance Standards were adopted in the following fields: Environmental and Social Risk Management, Labour, Resource Efficiency, Community, Land Resettlement, Biodiversity, Indigenous People (including a requirement for free, prior and informed consent under certain circumstances) and Cultural Heritage.
Regional Development Banks have also taken steps towards adopting and/or strengthening safeguard mechanisms. The Asian Development Bank adopted a Safeguard Policy Statement (2009). The Inter-American Development Bank has adopted policies on Environmental and Safeguards Compliance (2006), Involuntary Resettlement (1998), Gender Equality in Development (2010), Indigenous People (2006) and Access to Information (2010). The African Development Bank has an Integrated Safeguards System Policy Statement (2014) , while the European Investment Bank has a policy on Transparency (2015), a revised Environmental and Social Handbook (2013), a Statement of Environmental and Social Principles and Standards (2009) and a Strategy on Gender Equality and Women´s Economic Empowerment (2016). The New Development Bank (formerly the BRICS Development Bank) has adopted a Policy on Information Disclosure (2017) and an Environment and Social Framework (2016).
The Banks have a mixed track record in incorporating UNGPs requirements in their policies and practices. While a very few adopted stand-alone human rights policies (see FMO human rights position statement), the majority include references to human rights in their Sustainability Policies, performance standards and complaints mechanisms. However, the scope and strength of the human rights language and commitment vary significantly.
According to the Coalition for Human Rights in Development, while the policies adopted do not adequately protect communities’ human rights, they can provide them with a powerful tool to demand respect for their human rights. Some civil society organisations have developed tools so that affected communities can better understand the mechanisms that exist to protect their rights in relation to projects that could have a negative impact on them. Inclusive Development designed a Community Guide to the Asian Development Bank Involuntary Resettlement Safeguards as an action resource for people affected by projects funded by the ADB. A similar Guide has been developed for communities affected by projects financed by the IFC, while International Rivers developed an animated resettlement guide video for people affected by Dam Development.
In the context of increasing attacks against human rights and environmental defenders, the DFIs have been called upon to strengthen their due diligence procedures to prevent reprisals against individuals and groups challenging development projects. In his 2017 report to the General Assembly, the Special Rapporteur on the Situation of Human Rights Defenders recommended financial institutions:
” (a) To include in ex ante impact assessments an analysis of the state of civic freedoms in the country of investment as well as the lender’s track record of engaging with defenders; (c) To withhold approval for investment where impact assessments reveal serious threats to civic freedoms and defenders at the country or local level; (d) To develop guidelines that clearly communicate that criticism of activities financed by the institutions is an important part of improving the impacts of development efforts and that reprisals against defenders will not be tolerated.”
The importance of engaging in stakeholder dialogue when financing projects has been reiterated when two European development banks exited the controversial Agua Zarca dam project (Honduras) in 2017, amid local and international tension stemming from allegations that they did not adequately consult the indigenous Lenca people. The dam is considered sacred by the Lenca people, and a number of protesters, including 2015 Goldman prize recipient Berta Caceres, were killed.
Regarding the impact of foreign direct investment (FDI) in host countries, the OECD published in October 2019 a report: “FDI Qualities Indicators: Measuring the sustainable development impacts of investment“, that presents a new set of indicators that measure the sustainable development impacts of FDI. Taking into account the country context, policymakers can use FDI Qualities Indicators to assess how FDI supports national policy objectives, where challenges lie, and in what areas policy action may be needed.
What National Action Plans say on Development finance institutions
Action point 10
Belgium commits itself to integrating the criteria of the UNGPs and of the corporate social responsibility in the strategy to support the development of the local private sector of Belgium cooperation (Page 33)
La Belgique s’engage à intégrer des critères « droits de l’Homme » et de Responsabilité sociétale des entreprises (RSE) dans la stratégie d’appui au développement du secteur privé local de la coopération belge
The new law of March 2013 related to Belgian development cooperation attributes a more important role to the cooperation in view of supporting the private sector in the developing country. One strategic note, entitled “The Belgian Development Cooperation and the Local Private Sector: The Support of Sustainable and Human Development”, was formulated in April 2014.
From now on, and primarily in the sectors of agriculture, basic services, and infrastructure directly pertinent for the development of enterprises and of projects that can contribute to the fight against climate change, the Belgian development cooperation will specifically:
- Reinforce the capacities of public institutions of developing countries who are charged to create a favourable framework for the development of the private sector;
- Improve the access to financing for the micro, small, and middle-size enterprises (MPME);
- Reinforce the capacities of business people of micro, small, and middle-size enterprises;
- Promote equitable and durable commerce in order to support the social economy and favour socially responsible businesses.
This strategy, which applies itself to the actions of businesses in the 14 priority countries of the governmental cooperation but also in the 52 countries of intervention of non-governmental actors and of the Belgian Society of Investment for Developing Countries (BIO), insists as well on the importance of coordination and synergies to developed and on the coherence of the policies put in place as well as on a follow-up for rigorous actions supported.
The principal, specialised actors in support of the local private sector are the Belgian Society of Investment for Developing Countries (BIO) and the Trade for Development Center (TDC).
The corporate social impact purpose of BIO is to invest, directly or indirectly, in the development of micro, small, and middle-size enterprises (MPME) and social economy enterprises situated in developing countries with the interest of economic and social progress of these countries all while assuring sufficient return. At the same time, BIO also has the corporate purpose to invest in energy projects and projects that contribute to the fight against climate change in developing countries as well as in companies whose purpose is to provide basic services to the populations of developing countries. In addition, through its Support Fund for Micro, Small, and Middle-Sized Enterprises (MSME Support Fund), BIO can grant subsidies to co-finance support programs.
The TDC, meanwhile, aims to improve market access for producers and entrepreneurs in the South through direct support to local producer organizations, local businesses, or local professional organizers as well as to develop expertise on the themes of fair and sustainable trade in order to put in place the appropriate awareness and knowledge transfer strategies=
Federal Government Action:
Both the management contract between the Belgian state and BIO, which began in effect for five years in April 2014, and the 2014-2017 Convention for the Implementation of the Trade for Development Centre signed between the Belgian state and Belgian technical cooperation, provides that all development interventions of the local private sector must adhere to certain principles of intervention. Among these principles, in addition to the criteria of “classic” development, are in particular the respect of social, environmental, and good governance aspects. These two legal tools also provide for reporting requirements to monitor and evaluate compliance with these principles.
The annual report sent by BIO will henceforth be systematically the subject of a specific meeting of the Concertation Committee DGD/BIO before June 30th with a management contract in place that links the granting of additional financial means by the Belgian state with respect to BIO in particular for its reporting obligations. The Concertation Committee DGD/BIO will meet quarterly and will mainly ensure the proper implementation of the Management Contract.
The TDC will annually transmit a narrative and financial report, discussed in the Monitoring Committee (CTB-TDC/DGD), to certify the conformity of actions in particular to the principles of intervention outlined in the implementation agreement. The Monitoring Committee will meet every six months mainly to take stock of the monitoring efforts of the TDC Programme.
The Chilean NAP does not make an explicit reference to Development Finance Institutions.
`The Colombia NAP does not explicitly address this issue’
The Czech NAP does not make an explicit reference to Development Finance Institutions.
Appendix 1: Overview of the implementation of the state duty to protect
GP10 State Duty to Protect
Status in Denmark (initiatives implemented before the UN ratification of the Guiding Principles) [page 32]
… Denmark has been instrumental in the establishment of the World Bank’s Nordic Trust Fund, which aims to promote the application of the human rights framework in World Bank policies and operations. Denmark has also been active in promoting that The International Finance Cooperation (IFC) actively supports its clients in addressing human rights risks and impacts.
1. The State Obligation to Protect Human Rights
1.2 Activities in international organisations [page 14]
Finland shall bring forward questions related to human rights in international trade and development organisations and direct its support to programs related to business and human rights as part of Finland’s support to international trade and development organisations.
The French NAP does not make an explicit reference to Development Finance Institutions.
There is no mention of development finance institutions in the Business and Human Rights Chapter of the Georgian Human Rights NAP.
1. The State Duty to Protect
1.1 Basic rules of economic policy
Development Policy [pages 19]
The current situation
With their environmental and social standards, international financial institutions such as the World Bank and regional development banks set benchmarks for environmental and social regulation. The Federal Government will continue to track the reform processes in international financial institutions with a view to ensuring that their operations are even more sharply focused on human rights.
Measures [page 20]
The requirements set out in the UN Guiding Principles and in the National Action Plan, in particular in its chapter III, on due diligence with regard to human rights, also apply to the organisations that implement development policy, including bodies that provide financing for development. They also serve as a basis for further assessment and monitoring and, where appropriate, further development of the grievance procedures that state implementing organisations, including financing bodies, have already established.
In addition, the Federal Government will continue to track the reform processes in international financial institutions with a view to ensuring that their operations are more sharply focused on human rights.
The Irish NAP does not make an explicit reference to Development Finance Institutions.
IV. Italian ongoing activities and future commitments
International development cooperation
“For Italy international development cooperation is “an integral and qualifying part of foreign policy”, as provided by Law No. 125/14. It contributes to the promotion of peace and justice and aims to foster solidarity and equal relations between peoples based on the principles of interdependence and partnership in respect of human rights. Political responsibility for development cooperation rests with the Minister of Foreign Affairs and International Cooperation, which establishes its guidelines and ensures the unity and coordination of all national cooperation initiatives. The Italian Agency for Development Cooperation, under the direction and supervision of the Ministry of Foreign Affairs of International Cooperation, has the task of implementing cooperation policies. The coherence of national policies is ensured through the Interministerial Committee on Development Cooperation (CICS) , chaired by the President of the Council of Ministers and composed of representatives of the main Ministries. Law No. 125/14 also provided for the establishment of a National Council for Development Cooperation, whose members include the main public and private actors, civil society organizations and other nonprofit and for-profit entities operating in the field of international development cooperation. Finally, for a targeted sectoral intervention concerning vulnerable categories, it is important to enhance wider knowledge in the business world about some guidelines adopted in this field: the Guidelines on Childhood and Adolescence, recently revised, the Cooperation Guidelines on Gender Equality and the Empowerment of Women, Girls and Children (2020-2024) and the Guidelines on Disability and Social Inclusion in Cooperation Interventions (2018); the latter one has established relevant targets: increasing the awareness of companies to improve the employment of persons with disabilities; fostering employment through training activities using new information technologies” (p. 25)
ANNEX 1 – Accountability Grid and Assessment Tools for the Implementation of the NAP
“41. Confirm Italy’s commitment to microfinance initiatives that favour and support local entrepreneurship in development cooperation partner countries.” (p. 67)
Chapter 2. Action Plan
2. Areas of the NAP
(2) Measures of the Government as an Actor regarding State Duty to Protect Human Rights
B. Development Cooperation and Development Finance
(Existing framework/Measures taken）
The Development Cooperation Charter adopted by the Cabinet in 2015 promotes human security, including fundamental human rights, as one of the basic policies for development cooperation. In addition, the Charter requires that sufficient attention is being paid to the protection of fundamental human rights in recipient countries to ensure the appropriateness of development cooperation, and that efforts are being made to ensure appropriate operation. When engaging in development cooperation projects, internationally established human rights standards, including the international human rights treaties, have been respected. Particular attention has been paid to human rights of socially vulnerable groups, such as women, indigenous people, persons with disabilities, and minorities. Nevertheless, further efforts are required in this regard.
JICA (Japan International Cooperation Agency), JBIC (Japan Bank for International Cooperation) and NEXI (Nippon Export and Investment Insurance) have introduced guidelines for environmental and social considerations. Along with them, necessary information disclosure procedures and related grievance procedures have been introduced to consider the impact of projects on human rights, the environment, and society. As a contract requirement, the Standard Instruction to Bidders and Form of Bid used for JICA’s Official Development Assistance (ODA) Loans and Grants contains a contract clause to comply with labour related laws and regulations of the recipient countries that include respect for human rights.
The JBIC Guidelines for Confirmation of Environmental and Social Considerations examine not only the impact of JBIC projects on human health, safety, and the natural environment but also social concerns, including respect for human rights as environmental and social considerations required for the projects. JBIC has been encouraging borrowers and related parties to take into account environmental and social considerations through loan agreements as necessary.
(Future measures planned)
Implement effective measures regarding environmental and social consideration in the fields of development cooperation and development financing
- JICA (Japan International Cooperation Agency) has established the Guidelines for Environmental and Social Considerations. It intends to continue to respect internationally recognized human rights and environmental and social considerations when engaging in development cooperation projects. This is to be done by not only complying with the laws, regulations and standards of the recipient countries but also confirming that they do not differ significantly with the World Bank’s Environmental and Social Safeguard Policies and other initiatives. In particular, JICA (Japan International Cooperation Agency) intends to engage in considerable discussions with stakeholders such as local communities after disclosing information to ensure that an agreement can be reached on the projects through methods that are socially appropriate. When doing so, it will continue to pay attention to ensuring that due consideration is given for the socially vulnerable. [Ministry of Foreign Affairs]
- JBIC (Japan Bank for International Cooperation) has established the Guidelines for Confirmation of Environmental and Social Considerations on the basis of, among others, following discussions:
– discussions within the international frameworks on environmental and social considerations and human rights; and
– discussions at the OECD, such as the Recommendation of the Council on Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence, which requires consistency between public export credit policies and environmental conservation policies. [Ministry of Finance]
- The review of the aforementioned JBIC (Japan Bank for International Cooperation) Guidelines is conducted by taking the progress of the above discussions into consideration and seeking opinions from the Japanese government and the governments of developing countries, Japanese companies, experts, and NGOs, while maintaining transparency in the process. [Ministry of Finance]
- In light of the clear inclusion of respect for human rights in the scope of environmental and social considerations in the revised version of the Guidelines on Environmental and Social Considerations in Trade Insurance in 2015, NEXI (Nippon Export and Investment Insurance) continuously endeavors to confirm appropriate environmental and social considerations in accordance with the Guidelines and review the Guidelines where necessary. [Ministry of Economy, Trade and Industry]
- Continue to promote efforts to incorporate respect for human rights into all aspects of the procurement process, including procurement requirements, screening and selection, and contract terms. [Ministry of Foreign Affairs, Ministry of Finance]
- From gender perspectives, “IV. Humanitarian and Recovery Assistance” initiatives, including the area of development cooperation in the National Action Plan on Women, Peace and Security, fall under the context of business and human rights. The Government continues to incorporate gender perspectives in the implementation of Japan’s assistance when collaborating with companies for JICA (Japan International Cooperation Agency) and UN projects. [Ministry of Foreign Affairs]
(4) Measures regarding Access to Remedy
Judicial and Non-Judicial Remedy
(Future measures planned)
(h) Continue the provision of grievance redress services in development cooperation and development financing
- To ensure compliance with the Guidelines for Environmental and Social Considerations, JICA (Japan International Cooperation Agency) has established and continues to provide a system where affected residents can file objections to non-compliance with the guidelines. In case an objection is filed, Examiners for the Guidelines, who are independent of departments responsible for specific projects, will investigate the facts concerning compliance/non-compliance, encourage dialogues between the parties concerned for resolution of disputes, report the results directly to the President of JICA, and disclose the result on JICA’s website. [Ministry of Foreign Affairs]
- To ensure compliance with the Guidelines for Confirmation of Environmental and Social Considerations, JBIC (Japan Bank for International Cooperation) has established and continues to provide a procedure for raising objections to non-compliance with the guidelines. The request to raise objections can be submitted by the country’s residents to be affected by the project, and an Examiner for Environmental Guidelines as an organ independent of departments responsible for lending or investment operations will make a determination, with the result to be disclosed publicly. [Ministry of Finance]
- JICA (Japan International Cooperation Agency) and JBIC (Japan Bank for International Cooperation) are to continue enhancing effectiveness through operational improvement. [Ministry of Foreign Affairs, Ministry of Finance]
The Kenya NAP makes no reference to Development Finance Institutions.
The Lithuanian NAP does not make an explicit reference to Development Finance Institutions.
Part II: Specific objectives of the National Action Plan 2020-2022
1. The state duty to protect human rights
1.8 Promotion of the United Nations Guiding Principles on Business and Human Rights in international fora and in international relations, including international economic relations and relations with Luxembourg’s cooperation partner countries
Luxembourg supports initiatives at European and international level to ensure that human rights are respected in companies.
During the first phase of implementation of NAP 1, useful contacts were made with the representatives of the Ministry of Economy and the MAEE (Ministry of Foreign and European Affairs) which are competent in the field. The aim is to build on this initial exchange and to develop more concrete actions.
|Objectively verifiable indicators||× Benchmark: NAP 1|
|Verification sources||× NAP 1 Implementation Report
× Follow-up in the Working Group on Business and Human Rights [GT « Entreprises et droits de l’Homme »]
|Expected results||× Definition of appropriate language elements
× Adaptation of the National Pact for Luxembourg companies to the relations of the Cooperation with economic actors of the private sector in the framework of projects and programmes in the partner countries
× Reminder of the importance of ratifying international conventions, in particular those of the ILO (Convention 138 on minimum age; Convention 182 on the worst forms of child labour)
|Implementation timeline||Duration of NAP 2|
|Means of implementation||× MAEE (Ministry of Foreign and European Affairs), Directorate for European Affairs and International Economic Relations
× MAEE (Ministry of Foreign and European Affairs), Directorate for Cooperation
× Ministry of Economy
× LuxDev (Luxembourg Agency for Development Cooperation)
The 2020-22 NAP states the second edition of the National Action Plan complements the first NAP. Additional information about the first NAP can be found here.
‘The Mexico NAP does not explicitly address this issue’
Content from non-BHR specific chapters in the Human Rights NAP:
Strategic priority 3.7. Implement measures aimed at the protection of the rights of land, territory and healthy environment, prioritising the autonomy and the self-determination of communities.
3.7.4. Strengthen the evaluation procedure of Environmental and Social Impact Assessment Reports of public and private sector projects and activities, which affect the DESCA (acronym for economic, cultural, social and environmental rights), with the participation of the individuals and communities which will be potentially affected by them.
3.7.8. Foster the adequate legal classification of environmental crimes, of public or private sector’s responsibility, as well as for the damage repair, with the goal of facilitating access to justice in environmental matters.
3. Results of the consultations and government response
3.2 Policy Coherence
International forums [page 18]
As a shareholder in the international financial institutions, the Netherlands calls for more systematic attention for human rights and effective internal monitoring mechanisms to safeguard observance of human rights in projects. It is, for example, urging more systematic attention for human rights in the review and update of the World Bank safeguard policies.
The Norwegian NAP does not make an explicit reference to Development Finance Institutions.
Pakistan’s NAP does not explicitly address this issue.
The Peruvian NAP does not make an explicit reference to development finance institutions.
The Polish NAPs do not make an explicit reference to Development Finance Institutions.
Principle 4 – Businesses receiving State support
The SID Bank specialises in public mandate for promotional and development tasks and services in international trade, economic and development cooperation, commercial operations, innovation, research and educational activities, ecology and energy, infrastructure building and other areas important for Slovenia’s development. (pg. 24)
The Slovene Export and Development Bank (SID Bank) is guided by the concept of responsible lending and implements the OECD policy on sustainable lending for export credit guarantees. (pg. 25)
The criteria for funding or co-funding development cooperation programmes or projects now also include proven corporate social responsibility, respect for a human rights-based approach, strengthening gender equality and women’s empowerment. (pg. 25)
South Korea’s NAP makes no reference to development finance institutions.
Guiding Principle 4
“Within one year after the approval of this Plan, a Working Group will be created within the framework of the Strategic Plan for the Internationalization of the Spanish Economy, which will develop a specific Action Plan to examine the coherence of policies to support business internationalization, and its alignment with the Guiding Principles. The Working Group, which will present its conclusions to the Government, will study how cooperation for development, official credit agencies, export credit and official insurance or investment guarantee agencies of all administrations are able to condition, modulate or revise its support for investment based on the exercise of the responsibility to respect human rights by the beneficiary companies, both inside and outside of Spanish territory.”
Annex: Measures taken
The state as actor [page 22]
Following support from Sweden and other countries, the Board of Governors of the World Bank decided in 2011 that the regulations on social and environmental standards that the Bank applies to business loans provided via its private sector body the International Finance Corporation (IFC) should include a requirement that consideration must be had to the UN Guiding Principles on Business and Human Rights.
2 National Action Plan on Business and Human Rights 2020-23
2.1 Pillar 1: state duty to protect
2.1.3 The State-business nexus
Guiding Principles 4 to 5
Measure 11: Human rights due diligence by public-private development partnerships
As laid down in the Code of Conduct for Contractual Partners of the FDFA [Federal Department of Foreign Affairs], respect for human rights and gender equality are two of the values which should be promoted in the interests of Switzerland. All individuals, companies or other entities that work with the FDFA are required to contribute to the promotion of these values and to act in accordance with them, and with the legal order. The Code of Conduct outlines the attitude and behaviour that the FDFA expects from its contractual partners (suppliers of goods and services, consultants, contractors, organisations responsible for implementing projects and/or recipients of contributions, etc.) in Switzerland as well as abroad. The Code of Conduct is binding and forms an integral part of all agreements between the FDFA and its partners.
The Swiss Agency for Development and Cooperation (SDC) Risk Assessment for Partnerships with the Private Sector takes into account the impact that these partnerships could have on human and employment rights, government structures and the environment. Consequently, the federal government will not work with partners which have repeatedly been involved in human rights abuses or cannot provide cogent evidence that they have substantially reduced their exposure to human rights risks.
For the purpose of implementing these guidelines, the federal government may work with external providers in carrying out a detailed risk assessment if this can reasonably be required for the partnership in question. The federal government also ensures that it does not enter into any public-private development partnerships with business enterprises which refuse to cooperate with the National Contact Point for the OECD Guidelines for Multinational Enterprises.31
The federal government is currently working with other donors on a risk management model for public-private development projects. The outcome of this process, which takes place within the framework of the Private Sector Engagement Working Group of the Donor Committee for Enterprise Development (DCED), could necessitate amendments to the SDC Risk Assessment for Partnerships with the Private Sector.
|Prevent human rights risks in public-private development partnerships.||A tangible example that the SDC Risk Assessment guidelines have been implemented, including a human rights risk assessment, prior to entering into a new public-private development partnership||FDFA [Federal Department of Foreign Affairs],
EAER [Federal Department of Economic Affairs, Education and Research].
2.1.5 Policy coherence
Guiding Principle 10
Measure 19: Promotion of respect for human rights and labour standards within financial institutions
As a general rule, an evaluation of the environmental and social risks is integral to the process of approving any project or programme conducted as part of Swiss economic cooperation. The aim is to ensure that any investments Switzerland makes fully comply with applicable legislation and rules, including international human rights standards.
Investments by the Swiss Investment Fund for Emerging Markets (SIFEM) are subject to full due diligence with regard to its environmental, social (including working conditions) and governance (ESG) responsibilities. The relevant human rights standards are applied in all ESG risk assessments. This means that the risks of human rights abuses are always taken into account in the investment decision-making process. SIFEM partners (fund managers) are required to submit an annual or half-yearly report detailing their ESG activities and any major ESG accidents and incidents. This information makes it possible to improve the monitoring of human rights issues from the initial situation assessment and right through the investment cycle.
As part of its involvement in international financial institutions, Switzerland actively promotes the systematic reinforcement of ESG standards. It supports the strictest transparency standards and helps to mitigate the potential adverse human rights impacts of projects by strengthening the independent inspection committees that handle project-related complaints lodged by the communities concerned. By creating frameworks and exemplary programmes, financial institutions can advance the promotion of ESG standards, respect for human rights at international level and a shared understanding of problems.
|Ensuring that investments and projects supported by Switzerland in relation to its economic development cooperation and international financial institutions do not have an adverse impact on human rights and serve as an example of international best practices.||Human rights due diligence as part of SIFEM investments (source: summary report of the Federal Council on the achievement of its strategic goals).
Swiss contributions within international financial institutions to promote ESG standards, transparency and respect for human rights
|EAER [Federal Department of Economic Affairs, Education and Research].|
Taiwan’s NAP does not explicitly address this issue.
The Thai NAP does not make an explicit reference to development finance institutions.
CHAPTER FIVE: INSTITUTIONAL FRAMEWORK
5.14 Development Partners
I. Provide technical support for the implementation of action plan.
II. Provide resources and logistics to enhance implementation of the action plan.
III. Monitor and evaluate the impact of the action plan.
The UK 2013 NAP
The UK 2013 NAP and 2016 Update NAP does not make an explicit reference to Development finance institutions.
The National Action Plan
Leading by example
Outcome 1.1: Promoting RBC Globally
Ongoing commitments and initiatives
Promotion of Robust Safeguards at the World Bank and other International Financial Institutions (IFIs) [page 9]: The U.S. government will continue to play a leading role in encouraging strong safeguard and sustainability policies across multilateral development banks and other IFIs. Over the course of the World Bank’s recently-completed Safeguards review, the U.S. government supported strong provisions in the Bank’s Environmental and Social Framework approved in August 2016, including a new safeguard on labor and working conditions, and encouraged the World Bank to incorporate human rights issues in its safeguards. Implementing department or agency: Treasury, DOL, State, USAID