Background

In terms of ending extreme poverty and promoting shared prosperity[1], the World Bank is arguably the single most important international financial institution. However, the bank’s operational policies do not prioritize its engagement within the international human rights framework or provide assistance to its member countries in complying with their human rights obligations. As a result, the bank has been blamed and questioned when its projects were reportedly involved in deteriorating human rights.

Many bank-funded projects affect vulnerable populations in profound ways. For example, in the Western Gambella region of Ethiopia, a project known as “villagization,” which is a collaborative relocation project between the bank and the Ethiopian government, was reported to have forced people to move into the government’s new villages. The relocation was accompanied by serious abuses, including intimidation, assaults, and arbitrary arrests by local police officials[2].

In Cambodia, similar issues have happened. Forced evictions and arrests of community activists who protested the bank’s financed project invoked a mass demonstration and violent confrontation between police officers and villagers[3]. In Uzbekistan, the Uzbek government, which controls the entire cotton production system, now coerces workers to pick cotton and meet production quotas. The bank was criticized for not fulfilling its obligation enough to prevent forced labor linked to its agricultural loans[4].

Avoiding human rights obligations could be problematic in the sense that it not only undermines the bank’s consistent recognition in the international community, but it also inhibits the bank’s ability to take adequate account of the social and political economy aspects.

Potential Reasons

Given the information above, before making recommendations to change the current situation, it is essential to seek to understand why there is an aversion to human rights within the management of the bank.

The Culture of the World Bank

The bank was established in 1944 with the idea of being a technical agency that would stay away from political confrontation. For so many years, the bank avoided human rights discourse for fear that the bank will become a global activist for human rights and veer off the original mission and goals[5]. In addition, people in the bank intended to prevent the misconception that the bank tries to impose Western values on non-Western countries given the widespread notion that the bank and many other international financial organizations have been dominated by the Western values and ambitions.

Outdated Legal Limitations

The bank has made plenty of public statements declaring the importance of human rights. Ironically, however, the bank does not have a single comprehensive human rights policy. Most importantly, the bank has been limited by the inconsistent and outmoded legal framework as stipulated by its articles of agreement for the International Bank for Reconstruction and Development (IBRD). The articles of agreement stipulates that the bank and its officers shall not interfere in the political affairs of any of its member countries and that only economic considerations shall be relevant to their decisions. According to the general counsels, who have played a key role in the dynamic interpretation of the articles of agreement, human rights policy is classified as a political issue rather than economic partly because the engagement of the bank with human rights would bring unpredictable and costly political consequences.

Competition From Other Institutions

It is noteworthy that minimizing the human rights concerns would facilitate the completion of projects. Plus, focusing more on economic development in recipient countries forms an infallible standing when it comes to achieving goals and expanding institutional impact. Moreover, for the bank, competition from other development banks continues. Both the New Development Bank BRICS (NDB BRICS) and the Asian Infrastructure Investment Bank (AIIB) have claimed themselves as the alternatives for a Western-led World Bank and International Monetary Fund.

Options and Recommendations

The bank has arrived at a crossroads, where it has to choose between a “race to the bottom” (doing nothing) and accountability to the vulnerable populations in recipient countries[6]. Obviously, the latter will bring the bank into a more sustainable and virtuous cycle of development. Given the argument above, it is now clear that the bank needs to take human rights, including political human rights, into consideration as part of its decision-making process.

The Short-Run Plan

The biggest challenge is how to move toward an appropriate approach that ensures these legal concepts, which are deeply embedded in the institutional culture, will be interpreted to reflect and justify human rights related concerns and challenges.

However, given the time needed for a final institutional decision and change of internal culture, it is understandable that in the short-term, the bank should encourage its borrowing countries during the project design stage to adopt legally binding human rights frameworks and take into account the serious consequences of ignoring or violating human rights. For ongoing projects that have already had human rights concerns, the bank should quickly respond and take emergency measures to reduce human rights violations and, if necessary, even suspend these projects for emergency evaluation.

The Long-Run Plan

• Cultural Change. It is noteworthy that the notion that human rights is a matter of politics is deeply rooted in the bank’s culture. To start changing it, the initiative must come from the president and the staff. The bank should hold internal forums with human rights experts and begin to adopt a culture of emphasizing human rights in their projects. An updated interpretation of the articles of agreement that makes it more inclusive of human rights should also be on the bank’s agenda[7].
• Due Diligence Policy. The bank needs to design a due diligence policy that includes all the circumstances under which the bank should review or reject projects that would otherwise result in human rights violations. Current inspection panelists should hold greater responsibilities in designing the policy, given their years of experience in the field.
• Stakeholder Alliance. If the bank were to sanction every recipient country that violates the rule, it might result in fewer borrowers. Therefore, there is a need for an alliance of stakeholders where they design a mechanism — “group sanction” — so that the cost of violating human rights for borrowing countries is prohibitively high and would prevent them from finding another donor country or agency. This alliance may require the active participation of UN experts in international laws, international environmental treaties, international labor standards, recipient countries, donor countries, and other financial institutions[8].
• Collaboration with Other International Organizations. The experience of many other international organizations that have already adopted human rights policies should be helpful to the bank. Additionally, getting other multilateral lenders like AIIB and NDB into the “group sanction” mechanism aforementioned is necessary and strongly recommended.

 

[1] Ending Extreme Poverty and Promoting Shared Prosperity. (2013). Retrieved from http://www.worldbank.org/en/news/feature/2013/04/17/ending_extreme_poverty_and_promoting_shared_prosperity

[2] Human Rights Watch. (2015). World Bank: Address Ethiopia Findings. Retrieved from https://www.hrw.org/news/2015/02/23/world-bank-address-ethiopia-findings

[3] Human Rights Watch. (2015). World Bank Group: Project Critics Threatened, Harassed, Jailed. Retrieved from https://www.hrw.org/news/2015/06/22/world-bank-group-project-critics-threatened-harassed-jailed

[4] Human Rights Watch. (2015). World Bank: No Probe of Link to Abuses in Uzbekistan. Retrieved from https://www.hrw.org/news/2015/02/02/world-bank-no-probe-link-abuses-uzbekistan

[5] Palacio, A. (2006). The Way Forward: Human Rights and the World Bank. Retrieved from http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTLAWJUSTICE/0,,contentMDK:21106614~menuPK:445673~pagePK:64020865~piPK:149114~theSitePK:445634,00.html

[6] Herbertson, K., Thompson, K., & Goodland, R. (2010). A Roadmap for Integrating Human Rights into the World Bank Group. Retrieved from http://www.wri.org/publication/roadmap-integrating-human-rights-world-bank-group

[7] United National Human Rights Office of the High Commissioner. (n.d.). “The World Bank is a Human Rights-Free Zone”-UN expert on extreme poverty expresses deep concern. Retrieved from http://www.ohchr.org/en/NewsEvents/Pages/DisplayNews.aspx?NewsID=16517&LangID=E

[8] FAQs: Human Rights in World Bank Group. (n.d.). Retrieved from http://web.worldbank.org/WBSITE/EXTERNAL/EXTSITETOOLS/0,,contentMDK:20749693~pagePK:98400~piPK:98424~theSitePK:95474,00.html

Picture found at http://bit.ly/2fs3H0y.