The Multilateral Development Banks and the Management of the Human Rights Impacts of their Operations

Abstract

The operations of multilateral development banks (MDBs) can have both positive and negative environmental, social and human rights impacts. Since negative impacts can have profound and irreversible consequences, they should be avoided or mitigated. The MDBs also need to provide those adversely affected by these operations with a means for holding the MDBs accountable. They have established independent accountability mechanisms (IAMs) for this purpose. The growing body of IAM practice provides information on how these adverse impacts arise in the course of MDB financed development projects and on how the MDBs interpret and apply their own operational policies aimed at safeguarding social and environmental interests. After considering the primary sources of MDBs’ human rights obligations and responsibilities, this chapter proceeds by analysing selected IAM cases and considering what lessons that can be learned about the MDBs’ approach to managing these adverse impacts, including adverse human rights impacts. The analysis indicates that the MDB’s record in dealing with the adverse human rights impacts of their projects is mixed and that there are significant costs, both to MDBs and their borrowers, of failing to adequately address these impacts. Because the MDBs’ projects are similar to those undertaken by private financial institutions and contractors, understanding how the MDBs deal with the human rights issues that arise in their operations can help deepen our understanding of the human rights responsibilities of these other actors, thereby adding a useful input to the broader ‘business and human rights’ debate to which this volume is dedicated.

Keywords: international organizations, international law, international human rights law, international development law, international development

JEL Classification: K33, O22, F30, F53