News Column

World Bank: Falling Short on Rights

July 1, 2014



WASHINGTON, July 1 -- Human Rights Watch issued the following news release:

World Bank (http://www.hrw.org/topic/business/world-bank-imf) President Jim Kim has taken some steps to advance the Bank's respect for human rights but hasn't put in place adequate checks to guard against funding rights abuse, Human Rights Watch said in a report (http://www.hrw.org/node/127040) released today on his second anniversary as World Bank president.

Since Kim took office as president of the World Bank Group on July 1, 2012, he has tackled discrimination, improved some of the World Bank's analysis of and response to human rights risks, and taken some steps to learn from the institution's past mistakes, Human Rights Watch said. In addition to being Kim's anniversary, July 1, 2014, is the 70th anniversary of the launch of the Bretton Woods conference, at which the creation of the International Monetary Fund and the first arm of the World Bank were negotiated.

"By taking on the scourge of discrimination, President Kim has shown the Work Bank can address human rights issues," said Jessica Evans, (http://www.hrw.org/bios/jessica-evans) senior advocate on international financial institutions at Human Rights Watch. "The World Bank needs to do more to ensure that its investments improve the human rights climate for the very people it is seeking to help out of poverty."

Several human rights scandals have blighted Kim's tenure. Perhaps the most troubling was the World Bank Group's uncritical support (http://www.hrw.org/news/2014/01/10/world-bank-group-inadequate-response-killings-land-grabs) for a project in Honduras that was riven with violence, including killings, Human Rights Watch said. An internal accountability report (http://www.cao-ombudsman.org/documents/DinantAuditCAORefC-I-R9-Y12-F161_ENG.pdf) highlighted how the Bank's approach to dire human rights risks was woefully deficient.

"World Bank: Human Rights Status Report and Action Plan," (http://www.hrw.org/node/127040) assesses Kim's reforms, analyzes his missteps, and recommends improvement in three human rights areas central to the World Bank's goals of eradicating extreme poverty and promoting shared prosperity. Human Rights Watch outlined steps the World Bank should take to help eliminate all forms of discrimination, respect and protect human rights in all the World Bank Group does, and support an environment in which community members and independent groups can freely and effectively hold their governments and international institutions to account.

President Kim has criticized (http://www.washingtonpost.com/opinions/jim-yong-kim-the-high-costs-of-institutional-discrimination/2014/02/27/8cd37ad0-9fc5-11e3-b8d8-94577ff66b28_story.html) draconian anti-gay laws in Uganda, Nigeria, and 81 other countries. Since February, the World Bank has delayed a $90 million loan to Uganda's health sector to assess how the government's recently passed anti-gay law might affect the project. This action was necessary (http://www.hrw.org/news/2014/04/26/right-cause-crucial-battle) to ensure that the Bank did not contribute to marginalization in its project since the law criminalizes "promotion of homosexuality," directly threatening public health efforts.

But the Bank's efforts to eliminate discrimination are patchy. For instance, even as the World Bank has re-engaged in Burma, it has done little to tackle the horrifying discrimination (http://www.hrw.org/reports/2012/07/31/government-could-have-stopped) against the Rohingya, a Muslim minority group, which amounts to ethnic cleansing. Nor has it taken steps to address discrimination on the basis of political and other opinion, including (http://www.hrw.org/reports/2010/10/19/development-without-freedom-0) in its own projects, such as in Ethiopia.

The World Bank has done little to counter crackdowns on speech, peaceful assembly, and freedom of association, which are emblematic of the closing space for independent groups, journalists, and activists. The World Bank has an important role to play in fostering an open environment in which people can hold their own governments to account. In several Uzbekistan investments (http://www.hrw.org/news/2014/06/09/world-bank-reconsider-uzbekistan-projects) that ran a risk of using forced labor, (http://uzbekgermanforum.org/wp-content/uploads/2014/06/Forced-Labor-in-Uzbekistan-Report-2013.pdf) the World Bank pushed hard for third-party monitoring as a preventive measure, but did nothing to ensure that independent nongovernmental organizations or journalists would be able to monitor whether forced labor was being used within the project areas.

Kim should institutionalize the progress he has made, Human Rights Watch said. The Bank should always ensure that it does not contribute to systemic discrimination on any grounds - sexual orientation and gender identity, as well as gender, ethnicity, religion, language, disability, and political or other opinion among others. It should undertake (http://www.hrw.org/node/117248) due diligence to identify and avoid adverse human rights impacts in its projects and programs and ensure that it respects human rights in all that it does. Kim should ensure that the draft new safeguard policies - designed to prevent the World Bank from investing in projects that would harm communities or their environment - make human rights due diligence systematic at the Bank.

For the Honduras project, the internal accountability report that highlighted the bank's failings to assess the human rights situation stemmed from allegations that the International Finance Corporation (IFC), the arm of the bank that lends to private companies, was investing in a company that allegedly conducted, facilitated, or supported forced evictions of farmers in Bajo Aguan, Honduras. The report found that (http://www.hrw.org/news/2014/01/10/world-bank-group-inadequate-response-killings-land-grabs) private and public security forces under the company's control or influence were part of the violent confrontations with peasant groups and were implicated in multiple killings.

The report concluded that IFC staff did not adequately assess and respond to risks of violence and forced evictions in the investment, in violation of the IFC's own rules. It also found that staff did not undertake adequate due diligence even though there were fatalities and the situation had been brought to their attention. Under much pressure from Kim and the Bank's board, the IFC is now working to remedy (http://www.hrw.org/news/2014/06/13/joint-cso-letter-world-bank-executive-directors-re-ifc-and-lessons-learned) the various problems with this investment and reform its procedures, but it has a long way to go, Human Rights Watch said.

While Kim, together with the Bank's board, has emphasized the importance of the World Bank Group learning from its mistakes, it needs to make more meaningful change at the International Finance Corporation (IFC), Human Rights Watch said.

The World Bank Group should:

Consistently, both privately and publicly, raise concerns with governments when authorities:

Use intimidation, laws, and violence to silence independent groups, arrest journalists and opposition politicians who criticize the government, or introduce repressive laws aimed at silencing civil society;

Discriminate against people on any grounds prohibited by international law - race, color, descent or ethnic origin, nationality, language, religion, sex, disability, sexual orientation or gender identity, political or other opinion, national or social origin, property, birth, marital status, HIV status, or other status; or

Violate human rights in the name of "development efforts."

Require staff to respect and protect international human rights law and not support any activities that are likely to contribute to or exacerbate human rights abuses and undertake human rights due diligence to identify human rights risks and avoid, address, or mitigate any adverse human rights impact;

Articulate time-bound benchmarks for the IFC to demonstrate reform of its institutional culture and incentives, its practices for categorizing environmental and social risk, and its ability to routinely assess and address human rights risks in its investments;

Create incentive structures to reward staff for advancing inclusive, sustainable development that spurs positive human rights impact for marginalized communities, in close compliance with safeguard policies/performance standards, and sanctions when harm occurs due to staff negligence; and

Through its Doing Business Report, measure the degree to which governments require businesses under their jurisdiction to carry out robust and transparent human rights due diligence; and publicly report on their human rights, social, and environmental impacts, as well as payments made to domestic or foreign governments.

"The World Bank has taken steps in certain cases to identify human rights problems and worked to address them," Evans said. "Now is the time for it to make this effort systematic and recognize that universal human rights are not discretionary."

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