The UN Guiding Principles are explicit that financial institutions share the corporate duty to respect human rights. However, human rights due diligence of investors is, of necessity, different than the human rights due diligence of the entities and operations they finance. Financial institutions have their greatest leverage before they have issued financing, meaning that not only must assessment be robust up front (as monitoring is unlikely to generate on-the-ground change once funds are disbursed), and it must also be swift enough not to disrupt development timelines. A more targeted approach to human rights risks is, thus, important, to ensure that assessment is swift and directed at the most significant risks.
The two case studies here look at infrastructure investments made by international financial institutions (IFIs), one in the Middle East, and one in post-conflict Myanmar. Contextual conditions are particularly salient in financial-sector human rights risk assessment. While conflict risk plays a major part in this evaluation, political dynamics are also a significant factor, where infrastructure risks benefitting empowered populations to the detriment of the marginalized.
Human rights risks in agricultural investments often start with the land evaluation and acquisition process, extending into major risks of workforce and community welfare as operations commence. HRIA is complicated in agricultural projects by a relative paucity of monitoring data from companies, compared to extractive sector companies.
Environmental, health, and engineering data is rarely as robust at agricultural operations as at extractive sector operations. As such, identifying occupational hazards and impacts on natural resources (particularly groundwater) is more difficult and, at times, more divisive. The first pilot below, from a Dole pineapple plantation and packing facility in Costa Rica, depicts human rights impacts of an agricultural operation in a context of strong governance (at both the corporate and state levels). The second pilot, from Norwegian Green Resources operations in southern Tanzania, represents 7 years of ongoing assessment as the company and the government both develop mechanisms for evaluating industry impacts.
The human rights impacts of petroleum and energy have historically been either severely negative of significantly positive, with little space in between. Norway has used its oil wealth to generate shared prosperity across its population, while Nigeria’s oil has heavily polluted fishing grounds while having no palpable impact on poverty rates across the nation. “The resource curse” and “Dutch disease”, where large revenues affect the national context well beyond the physical footprint of the operation, characterize common understandings of oil extraction in low-income countries.
Avoiding these outcomes requires attention to human rights impacts by companies, governments and civil society. There are particular human rights impacts associated with exploration, which has a broad footprint, compared to extraction, which generally has very small footprints, and transmission, which involves pipelines, railways or roads, which can increase or decrease local access to markets and goods, depending on how they are developed. Meanwhile, energy generation, whether from fossil fuels or renewable sources, inevitably benefits the recipients of newly generated power, while potentially leaving sub-populations behind.
The first case study below highlights the risks of oil and gas development at Tullow’s well sites in Uganda, where governance issues are compounded in a historically marginalized region of the country, pose threats to human rights years before first oil is produced. The second case study examines the risk of disparate impact on populations isolated from electrical grids when a power plant will increase energy supply in Myanmar.
Assessing the human rights impacts of mining is facilitated by the sector’s strong background for data collection, enabling assessors with access to review robust sets of environmental, health, engineering, and workforce data. However, mining sector HRIA can be hindered by perceptional disjoints between mine management and affected rightsholders. Misunderstandings often characterizes relationships between a mine and the populations it affects, which result from weak communication processes accompanying a mine’s alarming ability to dramatically change a landscape.
HRIA case studies from Southeast Asia and sub-Saharan Africa showcase these perceptional issues, while also delving into the very real human rights risks associated with large-scale industrial construction in remote settings. Public health risks incumbent with workforce emigration can be accompanied by public participation risks resulting from corruption of local officials. At the same time, by concentrating a workforce within a limited footprint, mines can be ideal entities for monitoring and managing public health risks, while also promoting labor rights that exceed local standards and align with international expectations set by the ILO.