Development finance institutions
The UN Conference on Trade and Development (UNCTAD) has estimated that achieving the Sustainable Development Goals (SDGs) will take between US$5 to $7 trillion per year, with an investment gap in developing countries of about $2.5 trillion annualy. Much of this will come from domestic and international development finance institutions (DFIs), including multilateral development banks (MDBs) and other international and regional financial institutions, national development banks and export credit agencies, and private lenders. DFIs also have important roles to play in the global effort to combat climate change and adapt to its effects and helping States realise the right to development.
DFIs play a critical role in directly financing investments needed for the realisation of the SDGs and human rights and leveraging resources from the private sector. Investment in transport, energy, water, Information Communications Technology (ICT) and other infrastructure sectors is an important part of this effort. Furthermore, the MDBs including the World Bank Group and regional development banks play important advisory and normative roles in connection with the development of national legal and regulatory frameworks.
However, in order for DFIs to effectively contribute to sustainable development, it is crucial that they take necessary measures to avoid negative impacts on human rights as defined in international instruments and compatible national laws. In this regard, the
2030 Agenda for Sustainable Development and the
Addis Ababa Action Agenda of the Third International Conference on Financing for Development (“AAAA”) are grounded explicitly in international human rights law, and frame the contributions of the business sector to sustainable development by reference to their responsibility to respect relevant international standards, including the
UN Guiding Principles on Business and Human Rights, the
Convention on the Rights of the Child, and applicable labour and environmental agreements. The AAAA further encourages development banks, both domestic and international, to establish or maintain effective environmental and social safeguard systems based on international standards, including in relation to human rights and gender equality.
OHCHR’s work in relation to DFIs
OHCHR engages actively with the MDBs and national DFIs in order to help ensure that development financing activities and policies are consistent with international human rights standards and principles, and that human rights risk information is integrated into their due diligence processes. OHCHR has worked with numerous DFIs in the review of environmental and social safeguards policies, the development of independent accountability mechanisms and public information policies, and the development of guidance on Public Private Partnership (PPP) contractual provisions. OHCHR has also engaged with a range of MDBs and national DFIs on policy initiatives relating to reprisals against project-affected communities and the protection of environmental and human rights defenders.
A key component of the 2030 Agenda and the SDGs, OHCHR gives priority attention to infrastructure investment, which, while is vital for the realisation of many human rights, may also give rise to significant human rights risks from the project level through to the macro-economy. OHCHR’s work in this area is guided by its 2017 Mapping Study of the Human Rights Risks and Implications of Mega-Infrastructure Investment.
From the High Commissioner