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Issue Update – Oct 31, 2012
It is generally assumed that foreign direct investment in Southern countries is beneficial, promoting growth, jobs and development. Indeed, the World Bank and other public financial institutions operate on this assumption and promote investment liberalization policies with developing countries. However, publicly financed private investments often cause serious harm to local populations and violate their human rights.
International human rights law imposes obligations on states to respect, protect and fulfill human rights. This includes the obligation to protect against human rights abuse by third parties, such as corporations. All areas of state activity and all parts of the state apparatus, including public financial institutions, are bound by this legal duty. Yet the vast majority of public financial institutions lack clear and effective human rights policies to guide their investment activities. Some public financial institutions report undertaking ‘human rights due diligence’ to assess and mitigate adverse human rights impacts. However, virtually no information is publicly available regarding these processes and harmful investments continue to receive financing.
The Canadian government provides companies with investment and equity financing through the World Bank’s International Finance Corporation (IFC) and two Crown corporations – Export Development Canada (EDC) and the Canada Pension Plan Investment Board (CPPIB). These institutions lack transparent and effective policies that ensure compliance with international human rights law…. Read the full article here.