The interplay between the economic policies and safeguards of international financial institutions and good governance at the local level: report


Published:
September 2020
Presented:
To the HRC at its 45th session and the GA at its 75th session
Link:

Background

The mandate holder decided to devote his third thematic report to the Human Rights Council and the General Assembly to the interplay between the economic policies and safeguards of international financial institutions (IFIs) and good governance at the local level.

The IFIs referred to in this report are the World Bank, the International Monetary Fund, the African Development Bank, the Asian Development Bank, the European Bank for Reconstruction and Development, the European Investment Bank and the Inter-American Development Bank.

Summary

Through the various policies they pursue and the safeguards they have put in place to manage the related impacts and risks associated with investment lending, IFIs have a direct influence on how good governance is realized at the local level, and ultimately on the enjoyment of a democratic and equitable international order.

For the purpose of this report, and owing to the word limit, the Independent Expert has decided to focus on the following key issues, which relate to some of the thematic priorities laid down in his vision report: 1) stakeholder engagement and issues of public participation, transparency and reprisals; 2) State responsiveness to the needs of the population and retrogressive measures; and 3) the fight against corruption. The issue of accountability is mainstreamed throughout the report. The Independent Expert wishes to look mainly through the prism of State responsibility in upholding good governance and human rights. This report is not meant to be an exhaustive study of the present topic, but rather an overview of some of the main issues at stake, which could pave the way for further reflection.

The Independent Expert stresses that IFIs must systematically take all the measures necessary to ensure that their activities and the projects that they support do not lead to human rights violations, including those committed by clients, whether in the public or private sector. They must similarly use their substantial leverage to ensure that those clients respect human rights and the principle of good governance.

While IFIs should always aspire to be actors of positive change on the ground, it is first and foremost the responsibility of States, in particular in their capacity as clients of IFIs, to ensure good governance and respect for human rights on the ground. This responsibility starts with ensuring a safe environment that is conducive to the exercise of fundamental rights and freedoms, and pursuing accountability.

Crucially, respect for human rights, good governance and the interests of local communities must be at the very heart of what drives sustainable development. This requirement is all the more important in the context of the current COVID-19 pandemic, which has exacerbated several of the challenges identified in the present report and increased the vulnerability of groups at risk.