AC and Partners Provide Recommendations to the United Nations on Strengthening Accountability for DFI Finance
This week, Accountability Counsel and several civil society partners in Asia submitted recommendations for the UN Working Group on Business and Human Rights’ forthcoming report on development finance institutions and human rights. Recognizing that financial actors have an unparalleled ability to influence companies and scale up on the implementation of the United Nations Guiding Principles on Business and Human Rights (UNGPs), the report will provide countries, DFIs, and other stakeholders practical guidance on how to strengthen protection and respect for human rights through DFI financing, in line with the UNGPs. From our experience supporting communities around the world harmed by DFI projects, we know that having strong independent accountability mechanisms (IAMs) is key to a human rights-centered approach to DFI financing.
Our recommendations called for the following:
- DFIs that Have IAMs Should Strengthen These Mechanisms and Ensure Remedy for Harms – Decades of case experience at IAMs have shown that while these mechanisms are often the only avenues available to communities for raising concerns about DFI projects, significant shortcomings often undermine their fairness and effectiveness at completely remediating harm. DFIs should ensure that their IAMs implement best practices and should create remedy frameworks to ensure that resources are available to make communities whole.
- DFIs that Don’t Currently Have an IAM Should Create One, along with a Remedy Framework – Although many DFIs have created IAMs since the World Bank established the first IAM 30 years ago, many DFIs still do not have one. This creates an accountability gap for communities affected by their financing.
- DFI Associations and Networks Should Encourage Their Members to Create IAMs – With various networks or associations of DFIs being created to spur cooperation, such as Finance in Common, these associations should press their members to follow best practices. This includes creating an IAM.
- States Should Fulfill Their Duty to Facilitate Access to Remedy – Under several international instruments, States have a duty to protect against human rights abuses and must facilitate accountability and remedy when harm occurs. In the DFI space, this means that States should ensure that their own national DFIs facilitate accountability and remedy. This includes operating an effective IAM. States also participate in regional and multilateral development banks as shareholders and/or beneficiaries and should also encourage accountability and remedy for harms at those institutions.
Read our full recommendations here.