A/HRC/4/99
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do incorporate ESG issues into their research and evaluation, and use their influence as a
bondholder or shareholder to encourage companies to have appropriate policies and
implementation systems. In this context questions were raised about what impact investors
could achieve with regard to human rights since they are two or three steps removed from the
project, while lenders were closer but still not responsible for implementing the business. With
respect to due diligence carried out by export credit agencies (ECAs), it was noted that every
case is handled individually, and that ECAs are unlikely to turn a project down on human rights
grounds, preferring instead to engage and seek improvements.
46.
Some participants asserted that existing voluntary initiatives could be improved or
deepened to reflect a stronger commitment to international standards, while others stressed the
need to broaden membership to emerging markets or to companies that do not have human rights
policies. It was suggested that there is no contradiction between broadening and deepening, and
that the goal is to see meaningful standards at as many banks as possible; Equator Principles
banks will still be criticized if they are involved in problematic projects, as will financial
institutions that do not have any human rights standards.
47.
There was a discussion about confidentiality: While many participants hoped for greater
transparency, participants from financial institutions in both the public and private sector argued
that they often cannot disclose details of client transactions, including whether such transactions
have negative or positive human rights impacts.
V. HUMAN RIGHTS STANDARDS AND DECISION-MAKING
48.
The fifth session was moderated by John Ruggie (Special Representative of the
Secretary-General for human rights and transnational corporations and other business
enterprises). The session aimed to identify the prospects for enhancing the role of human rights
in the activities of the financial sector.
Panellist presentations
49.
Samuel Nguiffo (Director, Center for Environment and Development, Cameroon) said
that while human rights abuses may occur as a result of company activities, there is often
reluctance by transnational companies (TNCs) and the financial sector to address human rights
as a matter of obligation. The existing sets of principles and initiatives in relation to the financial
sector constitute a positive step, but they need to be improved because of their limitations in
terms of material scope (they do not cover all human rights), applicability and reach (not all
companies are bound by them), and nature (they are voluntary as opposed to mandatory). The
increasing importance of financial institutions from emerging economies, with no or few such
standards, creates a risk of a race to the bottom. A shift from voluntary to mandatory rules
seems necessary. It would require the following: independent monitoring of the implementation
of existing schemes, with publication of results; means of redress for violations of rights;
improved access to justice for potential victims of the activities of TNCs in host countries,
including the prevention of restrictions to access to justice as side-effects of host Government
agreements; and the strengthening of human rights protection by States from abuses by private
actors.
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