This panel was convened at 12:30 pm, Friday, April 5, by its moderator, Edith Brown Weiss of Georgetown University Law Center, who introduced the panelists: Jessica Evans of Human Rights Watch; Peter Lallas of the World Bank Inspection Panel; and Cynthia Williams of Osgoode Hall Law School, York University, Toronto.
INTRODUCTORY REMARKS BY EDITH BROWN WEISS *
We now have more than 190 countries and 7 billion people in the world, all of whom need a decent living, respect, and a sustainable human environment. To meet this need, the public and private sectors have engaged in project financing on a large scale. Much of this investment has focused on infrastructure, though increasingly investments have been directed to strengthening institutions and building capacity within countries to implement policy. This panel will focus on international public investments. Many groups of actors are involved, from the multilateral development banks to bilateral governmental projects, to investment by private banks. The investments have raised concerns about their environmental, social, economic, and cultural impacts. The rules governing these investments have changed over the last two decades, and are in some cases, under review again.
The amount of money for development financing is very significant. The World Bank Group, the largest of the multilateral development institutions, provided $52.6 billion in fiscal year 2012 in loans, grants, equity investments and guarantees, and $54.7 billion in the previous fiscal year. Of this amount in 2012, the IBRD loaned $20.6 billion, the International Development Association provided $14.7 further to low-income countries, and the International Finance Corporation devoted $15 billion to private-sector investments. The policies of these institutions can and do have important impacts in the countries in which they operate.
Since 1947 to 2012, the World Bank engaged in 11,690 projects in 172 countries. More than four decades ago, the World Bank instituted a process for environmental review of projects, and more than two decades ago adopted an operational policy on environmental impact assessment, which required the Bank to assess the environmental impacts of projects for which it provided financing. Subsequently, the World Bank enacted a series of eight so-called safeguard policies to guard against harmful impacts of its investments. The safeguard policies cover natural habitats, pest management, cultural property, involuntary resettlement, indigenous peoples, safety of dams, projects on international waterways, and projects in disputed areas. The World Bank is now reviewing these safeguard policies in the light of a new preference for relying more on a country's own policies.
The World Bank's financing related to projects has also changed. Over the last two decades, the proportion of funds that go for structural adjustment, or in the last decade development policy loans, and most recently, ' 'program for results operations," has increased dramatically. These funds provide direct budget support for certain sectors and policy and institutional reforms. They do not support projects directly, although sometimes projects are included within a development policy loan. An empirical analysis of forest reform projects in Africa, for example, revealed that some were processed as projects and some as components of development policy loans. The significance of the turn to financing that does not go directly for projects is that the regulatory policies that govern projects do not apply in the same way. The requirements are fewer, and the process for scrutinizing impacts much faster and less detailed. The International Finance Corporation, which handles private-sector financing, has also adopted policies to regulate environmental and social effects, and these, too, have changed over time. The policies have been in many respects similar to those of the World Bank, but with distinct differences, such as an explicit reference to human rights. Prior to 2006, the IFC relied on a set of safeguard policies. In 2006, it adopted its Sustainable Framework, which includes a policy on environmental and social sustainability and performance standards for the party receiving the financial support.
Private banks have adopted the Equator Principles to regulate the impacts of investments, which largely reflect the IFC policies. These will be addressed in detail during our panel. Perhaps the most significant development affecting the regulation of the impacts of foreign investment is the emerging role of the BRICS countries (Brazil, Russia, India, China, and South Africa) in funding foreign investment. In March 2013, the BRICS agreed in the Thekwini Declaration to establish a New Development Bank to provide financing for infrastructure. The new Bank would reportedly begin with an estimated $50 billion. Unless the new Bank adopts measures to regulate the environmental and social impacts of the investments it finances, there will be a very large escape hatch for those wishing to bypass safeguards designed to ensure sustainable development.
Within this broader context, our panel will address three aspects of regulating the impacts of international project financing: the role of the World Bank's Inspection Panel and other such accountability mechanisms in giving voice to people affected by projects and programs and in ensuring that the institution complies with its own policies and procedures; the human rights concerns in such financing; and the regulatory developments among the private-sector banks in financing investments. We will be addressing issues such as what is happening, how effective are the measures, how do we know, and what we can do better.
* Francis Cabell Brown Professor of International Law, Georgetown University Law Center.
ABUSE-FREE DEVELOPMENT: HOW THE WORLD BANK SHOULD SAFEGUARD AGAINST HUMAN RIGHTS VIOLATIONS
By Jessica Evans *
In Ethiopia, the World Bank is working to support education, health, water, sanitation, rural roads, and agricultural extension services through a US$2billion project that staff members argue, by virtue of its contribution to these key sectors, is good for human rights.
But in at least one part of the country--Ethiopia's western Gambella region--the main vehicle for achieving development objectives, including those envisioned under this World Bank project, is a program that not only fails to further such rights, it tramples upon them.
Known as "villagization," the government-propelled initiative involves forcibly relocating some 1.5 million indigenous and other marginalized people in five regions of Ethiopia to new villages where the government had claimed there would be improved access to basic services and infrastructure. Human Rights Watch investigations into the first year of villagization, as published in Human Rights Watch's, "Waiting Here for Death": Forced Displacement and "Villagization" in Ethiopia's Gambella Region, have found that consultation and compensation have been grossly inadequate, and relocation has been marred by intimidation and violence, with state security forces repeatedly threatening, assaulting, and arbitrarily arresting villagers who resist transfer. Dozens of farmers in Ethiopia's Gambella region told Human Rights Watch that they were moved from fertile areas, where they had survived on subsistence farming, to arid areas and that the promised government services often did not exist. Human Rights Watch documented at least seven credible accounts of people dying as a result of the beatings inflicted by the military and heard of many more deaths that could not be corroborated. (1) One 20-year-old man who escaped to South Sudan told Human Rights Watch:
Soldiers came and asked me why I refused to be relocated.... They started beating me until my hands were broken.... I ran to tell [my father] what had happened, but the soldiers followed me. My father and I ran away ... I heard the sound of gunfire. Forced to separate from his father, he kept running and hid from the soldiers in nearby bushes. When he returned the next day, he learned that his father had been killed.
It is essential that the World Bank respect and protect human rights in order to achieve its newly adopted goals to end extreme poverty and promote shared prosperity. The Bank can, and should, work toward these goals in complex environments like that of Ethiopia, while respecting the human rights of those it is working to benefit. As the World Bank undertakes its first-ever wholesale review of its safeguard policies--the policies designed to prevent against harm to communities or their environment--it has an opportunity to introduce systematic measures to enable it to promote human rights in its projects.
Firstly, the World Bank should introduce into its safeguard policies a commitment to respect and protect human rights, including by ensuring that it does not exacerbate or contribute to human rights violations through its lending or other activities. And secondly, it should implement systematic human rights due diligence to ensure that it honors this commitment. Human rights due diligence is the process of identifying how the Bank's lending or other support may affect human rights and determining how to constructively and proactively avoid or mitigate the risks of human rights violations.
Had it taken such steps with its basic services project, which was implemented in regions where the Ethiopian government was carrying out villagization, for example, the Bank would have identified risks of arbitrary arrests and detention, forced evictions, beatings, torture, and killings. It would also have identified the potential for reduced and inadequate access to food, health care, and water. Once identified, the Bank could have built into its project design various measures to avoid these risks.
Instead, the Bank failed to appropriately monitor human rights risks related to the...