Abstract
AbstractThis is a study of three authoritative instruments that promote a common idea: economic activities and development should be conducted with respect for human rights. The World Bank Framework, the International Financial Corporation Performance Standards and the UN Guiding Principles on business and human rights are examined to get clarity on how human rights risk management differs from more conventional management approaches. The focus here is on prevention of human rights impacts. Do the three instruments employ approaches adequate for handling human rights risks? To understand prevention, one needs to reflect on what makes human rights a particular type of impact and account for the regulatory context of protecting human rights transnationally. The analysis identifies four ‘offsets’ through which economic decision-makers can distort their human rights performance and place causal observers at a disadvantage. Prevention becomes an issue of how to relate to ‘residual impacts’ on human rights. This article finds that the ‘hierarchy or mitigation’ and even ‘human rights due diligence’ under illuminate the challenge. The proposal here is to add ‘reduction at source’ as a parameter of human rights risk management. The sources for this analysis are the three instruments, and the practice of implementing organizations, particularly IFC projects, CAO cases, impact assessments, and CSR reports. In conclusion, the potential for cross-fertilization among instruments is genuine. Increased clarity on prevention of human rights impacts should assist economic decision-makers in their risk management task and casual observers in assessing their performance.
Highlights
The World Bank’s Environmental and Social Framework (ESF),1 the International Finance Corporation’s (IFC) Performance Standards (PSs),2 and the UN Guiding principles on business and human rights (UNGPs)3 are three authoritative instruments that promote a common idea: Downloaded from https://www.cambridge.org/core
The analysis identifies four ‘offsets’ through which economic decision-makers can distort their human rights performance and place causal observers at a disadvantage
The ‘reduction at source’ parameter proposed adds a new indicator regarding the prevention of human rights impacts
Summary
The World Bank’s Environmental and Social Framework (ESF), the International Finance Corporation’s (IFC) Performance Standards (PSs), and the UN Guiding principles on business and human rights (UNGPs) are three authoritative instruments that promote a common idea:. Human rights have become more accepted as relevant in the decision-making processes of financial institutions (WB Group) and business enterprises (UNGPs) In this new paradigm, economic decision-makers are expected to operationalize human rights protections through risk management methods. The article draws on a sample of Compliance Advisor Ombudsman (CAO) cases and IFC projects, human rights impact assessments (HRIAs) of companies and several guides for conducting such assessments, and corporate social responsibility (CSR) reports.. The article continues with a second section that explains the problem of prevention in a specific human rights and regulatory context, and how the WB Group and UNGPs struggle to offer a compelling answer to the problem flagged here. The conclusions spell out implications for the WB group and the UNGPs and propose that cross-fertilization between the two systems is possible
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