Risk, responsibility and human rights: taking a rights based approach to trade and project finance

Risk, responsibility and human rights: taking a rights based approach to trade and project finance

A framework for accountabilty of Public International Financial Institutions

In the light of growing pressure on Public International Financial Institutions (PIFIs) to better take account of the human rights impacts their projects, this discussion paper proposes a framework, based on best practices, for mainstreaming human rights concerns into all stages of the project cycles.

The main characteristics of the framework is that it firmly roots corporate and PIFI processes and practice in international human rights law. It therefore differs from current voluntary codes and safeguards, as it firmly enshrines accountability and obligation into the framework.

The framework includes:

  • Phase I: Preparatory Stage - Feasibility study: this should go beyond assessing the project from a purely technical, financial and/or institutional design perspective, to a more people centred perspective. Furthermore an appropriate mechanisms should be in place for airing complaints and disagreements.
  • Phase II: Project Development – Conducting the Human Rights impact assessment (HRIA): building on the findings of the feasibility studies, the HRIA should provide additional measures for assessing, managing, monitoring and evaluating the impacts of the project, and the means for remedying these impacts. Furthermore it should compile a human rights protection plan.
  • Phase III: PIFI Project Categorisation, Review, Appraisal and Loan Negotiation: an initial screening of projects, a system for categorising projects, and a process for reviewing projects need to be in place ensuring appropriate levels of transparency and accountability.
  • Phase IV: Project Implementation: mitigation measures and compensation agreements, monitoring of the environmental management plan, and enforcement of compliance with PIFI conditionalities need to be in place ensuring appropriate levels of transparency and accountability.
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