1. “Export Credit Agencies and Human Rights”
Fraser Reilly-King, Halifax Initiative Coalition
Look at international human rights law
The European context
Case study – to demonstrate link between the social, environmental and hr impacts
Are ECAs subject to hr obligations?
Implications of this for ECAs
Suggestions for ECA policies and practice
Highlight existing methodologies
Thank you for the invitation
Overview of presentation

2. International human rights law
Promote international cooperation
The respect, protection and fulfillment of universal human rights and fundamental freedoms without discrimination
Characteristics of international human rights
Legal obligations fall on the state through ratification
Primary responsibility is on the state
Primacy of HR
Regulating non-state entities?
International cooperation – joint and separate action, UN Charter 56
Respect – state agrees not to violate human rights
Protect – state agrees to implement measures to protect the rights of others
Fulfil – undertake activities to help fulfil the rights of its citizens
Guaranteed under the UN Charter; Art. 6 EU treaty principles – respect for HR and fundamental freedoms
Inalienable (can’t take away); indivisible (all equal); interdependent(one right depends on the other); universal (everyone enjoys them)
Primary responsibility – people have rights – states have obligations; primacy of HR over economic policies – UN Charter 103 “obligations under present charter prevail”; Vienna Declaration
Human rights hold primacy over policies and laws which govern the economy (Vienna Declaration, 170 states– in theory, cf. in practice)
Non state entities – UDHR is “a common standard of achievement for all peoples and all nations, to the end that every individual and every organ of society” shall promote respect for human rights and freedoms - grey zone regarding the obligations of the state over private companies

3. Human Rights and the EU Long tradition of recognizing HR
European Convention for the Protection of Human Rights and Fundamental Freedoms (1950)
Further codified in national Charters
Maastricht Treaty on European Union, Art. 6
European Court of Justice
HR - fundamental principles of EU
HR Obligations for EU members seem strong
“the Union is founded on the principles of liberty, democracy, respect for human rights and fundamental freedoms…” and Member States “shall respect fundamental rights, as guaranteed by the European Convention for the Protection of Human Rights and Fundamental Freedoms”.
ECJ: develop a body of original case law in which basic human rights are considered an integral part of the general principles common to the legal systems of all of the member states.
General principles of EU Community law

4. Example: Baku-Tbilisi-Ceyhan pipeline
1,760 km, US$3.7 billion pipeline
Transferring 1 million barrels of oil/day
Funded by a number of ECAs, IFC and EBRD
Impacts
30,000 land users affected with high risk of economic displacement
Environmental damage caused by construction and corrosion to the pipeline
Ethnic, vulnerable group discrimination
Use of security forces with broad powers
Host government agreements creating exemptions
Poor procedure: consultation and redress
Complaints of economic displacement: use of emergency powers to make compulsory purchase, and non-negotiation of sales and inadequate compensation (below market rates, imposing prices, not compensating some landowners)
Environmental – allegations of incomplete EIA; flora and fauna not recorded; fragmentation of habitats; pass through the Borjomi-Kharagali National Park – mineral water plant; potential increase in landslides
Procedural: lack of information about the project; failure to inform about the negative impacts
Discrimination: Failure to apply indigenous people’s policy of the WB; makes no differential between ethnic groups, women and the poor; allegations of discrimination in employment practices against Allevis.
HGA – gives authority to security forces to act indiscriminately “civil war, sabotage, vandalism, blockade revolution, riot, insurrection, civil disturbance, terrorism, kidnapping, commercial extortion, organized crime or other destructive events”
Ferhat Kaya, a lawyer, was badly beaten in police custody, he believes, for trying to inform peasant landowners of their rights.
HGA – exempt from any obligations under national law and prevail over the contitutions; abrogated executive and legislative powers; effectively it abolishes new laws; compensate BTC if new laws come into effect; indemnified against legal liability arising from hr violations
HGA: Course of redress -> Third Party rights severely limited. For pollution, those adversely affected by the pipeline have the right of redress but only in local courts.
Redress -> legal costs of challenges to the transfer of land rights had to be paid for by the landowners.
Procedure for consultation: freedom of expression, freedom of information, freedom of association vs. state repression of dissent and top down imposition-> 11,000 page ESIA

5. Negative impacts and human rights
Resettlement, economic disruption, poor compensation
Right to an adequate standard of living, non discrimination
Suppressing protest, use of security forces
Right to freedom of expression, assembly and association, freedom from arbitrary arrest, security of person
Consultation
Freedom of information, participation in decision-making
Host government agreements
Overrides state obligations to its citizens, and potentially undermines ability of government to fulfill HR obligations
Legal confusion over effectiveness of third party mechanisms for recourse, right to justice
Adequate standard of living
Adequate Standard of living, to bargain collectively, - UDHR, 25; ICESCR, 11 and 12; CEDAW 14; ICESCR 8
To non discrimination, equality before the law – CEDAW, CEAFRD
Freedom of expression, etc. - Aarhus, CBD; UDHR 19, 20, 22; EU CHR 11
Justice –Redress ICCPR 6, 9; ECHR 5,6,7; UDHR 10, 11, ICCPR 14; ECHR; Aarhus
In fact 38 applications pending at the European Court of Human Rights regarding alleged HR abuses associated with the project
Green Alternative has compiled a 220-page dossier alleging the project breaches World Bank guidelines on 173 counts

6. Are ECAs subject to HR obligations?
Different structure
Different levels of ownership – public, quasi public, private
But common state or public function
Formed under national law, or entrusted by the government under national law
Act as agent for the government or discharge a public function – to promote national trade
Report to government (and Parliament) through Ministries
Assumption of debt by the national government
OECD Definition “officially supported export credits and insurance”
While ECAs have an impact on HR, what are their obligations to HR?
State has the primary responsibility for respecting, protecting and promoting HR, so where do ECAs fit in? Is there a difference between private and public ECAs?
Different structure - ECGD and Finnvera – wholly public; Sace and Ducroire – public, but operates independently from gov’t; ECA OeKB, COFACE, Hermes, SACE, Atradius - private entity, banks shareholders.
But same function – acts for the state and is responsible to it
Mandate: OEKB – Export Promotion law; Loi sur l’Office National du Ducroire; Finnvera Export Guarantee Act;
Report to gov’t: OEKB -> Finance; Belgium -> six ministries; Hermes -> Interministerial Committee; SACE -> Economics; Atradius -> Finance
EU Directive 2003/4/EC confirms this definition of ‘public authority’ as: b) any natural or legal person performing public administrative functions under national law…DG of the EU Commission confirms that “ECAs, whether or not belonging to the public administration, qualify as public authorities within the meaning of Directive 2003/4/EC and are obliged to observe the rules laid down in that directive. ”
Regardless of structure, as state entities, ECAs can’t be excluded or exempted in their activities from the legal obligations of the state

7. So what does this mean?
ECAs are public institutions (regardless of structure) and can’t be exempted from state legal obligations
Does not necessarily mean “STOP” activities, BUT
Given they are acting on behalf of the state
Given the impact of their activities on human rights
Their activities should be consistent with the legal obligations of the state
Respect – not violate
Protect – implement measures not to violate
Support the fulfillment of human rights obligations
In essence, regardless of their structure (public, quasi-public, private) or function, private, if the mandate is given by the state, and they are dependent on the state for their existence, they can’t be excluded from the legal obligations of the state.
Doesn’t mean ECAs should stop doing what they are doing – they have a mandate to pursue a necessary public function.
But given
that ECAs are acting on behalf of the state
that ECA-funded projects have an impact on human rights
States do seem to have an obligation to ensure that the policies and activities of ECAs – as an entity under their jurisdiction – respect and protect rights at the very least.

8. So how could ECAs take better account of human rights?
States parties – establish effective mechanisms to ensure accountability and responsibility of ECAs re HR
Proper due diligence with respect to HR
Incorporate respect for HR into ECA charters and by-laws
Reference HR conventions in ECA policies (ECGD, EDC)
Full screening of projects for potential HR impacts
Transparency - Publish summary of advice given and sought on human rights with respect to a project (Ilisu)
Independent compliance mechanism (EDC/JBIC/OPIC) and whistleblower provisions
Human rights protection plan!
States parties to human rights treaties should establish effective mechanisms to ensure accountability and responsibility of ECAs
Very few ECAs incorporate any reference to HR in their bylaws or charters (Finnvera, Ducroire and Atradius reference the OECD MNE, EDC -> EDC values human rights and promotes the protection of internationally recognized human rights, consistent with the policies of the government of Canada (Been asked by AG to reference International conventions as a result)
ECGD, EBRD limited screening
"Reverse Flow Analysis" , to assess projects impacts on human rights, which is included in reputational risk summary.
Follow precedent established by Illisu and publish summary of advice given to, and sought by, ECGD on human rights

9. What methodologies exist to take account of human rights?
Danish Institute for Human Rights – Human Rights Compliance Mechanism
International Alert – Conflict Risk Impact Assessments
Rights and Democracy – Human Rights Impact Assessment for Communities
Women’s Edge – Gender Impact Assessment of Trade Agreements
UNDP and UN High Commission for HR - Human rights impact assessment for trade agreements
Halifax Initiative – Rights-based approach to project finance
Ample methodologies now exist to take account of human rights – these didn’t exist before and this was perhaps part of the reason for hesitating to pursue this.
Many of them developed in collaboration with business
Won’t go into detail here on each of them, but just wanted to highlight these
BEFORE ECAS GO AHEAD, THEY NEED TO DO THEIR DUE DILIGENCE ON HUMAN RIGHS AND THIS IS NOT BEING DONE.
[Proposal in Parliament in Canada that for a project to receive any public funding, there has to be a human rights impact assessement]
IN ADDITION, we could perhaps argue that there is a willingness among corporations to do more:
85 companies have a human rights policy statement
24 companies produce human rights (and sustainable development reports)

10. THANK YOU! Fraser Reilly-King
Program Manager, Export and Project Finance
Halifax Initiative
153 Chapel Street, Ottawa, ON K1N 1H5, CANADA