A/HRC/4/99 page 6 imprecise to the point of absurdity. As another example, the IFC standards were seen as having undermined the principle that indigenous peoples should give “free, prior, and informed consent” for economic activities affecting their land or culture. Some NGO participants advised companies to seek the guidance of human rights experts and draw upon actual jurisprudence, rather than relying on their own interpretation. 15. It was suggested that public sector financial institutions such as export credit agencies (ECAs) have human rights obligations as State agents. However, this suggestion was considered by some to be an oversimplification of international law. It was also stressed that the primary mandate of ECAs is to maximize exports, although they strive to support good projects. 16. There was debate over the scope of the human rights obligations of private financial institutions. There was agreement that companies could not be put in the same position as States. It was suggested that the obligation to protect and promote human rights rests with States and does not apply to private sector operators. The State has a duty to protect citizens from violations by third parties, including private business. It was stressed that the obligations of private sector financial institutions also derive from social expectations, for example that private business will not be complicit in human rights violations. 17. Some participants suggested that when financial institutions become aware of human rights violations in their investments, they should withdraw their support from those investments. A number of participants pointed out that if FIs withdraw, they have no leverage at all to improve the human rights impact of the project. Withdrawal should be a last resort and it may lead to negative consequences, for example resettled populations not receiving adequate compensation. 18. Participants discussed the impact of the Equator Principles (the Principles). Although the Principles are limited to project finance, they have catalyzed a process inside and outside banks that is merely the beginning of an effort to embed human rights into their core processes. Some NGO representatives expressed pessimism about the perceived weakness in the Principles with regards to implementation, reporting, and their clarity and direction to financial institutions to comprehensively address human rights issues. 19. The discussion went on to consider human rights challenges faced by financial institutions, both as lenders and investors in other companies and as transnational corporations themselves. Participants mentioned that capital has increasingly shifted to emerging economies, some in situations of current or recent conflict, which means that FIs are increasingly investing in riskier markets. Transnational FIs are guests of the host Governments and must respect local customs, cultures and laws, and balance those with global standards. It was also pointed out that in such markets, local financial institutions may be weak or corrupt. 20. There was discussion about the emerging market FIs who are increasingly active. Some participants expressed concern that these new players may be lowering standards within the industry, for example through lack of transparency, and expressed the need for such players to be brought into consultations such as this one. Examples were cited of such engagement beginning, and participants discussed the importance of multi-stakeholder initiatives in this regard.