Maxime Kempe
Master: International Public Law
Supervisor: M. den Heijer
Submission: 2 January 2017
Responsibility of the World Bank Group towards human rights
violations in the IBRD and IDA loans and are the obligations
contrary to the IBRD and IDA articles?
1. Human rights obligations under international law for the World Bank Group and whether the articles of agreement leave room to comply with these obligations?
2. Attribution of a wrongful act under international law.
Chapter 1 4
1. Methodology 5
Chapter 2 7
2.1. Draft articles on the responsibility of international organizations 7
2.2. When does an international organization have
obligations under international law? 8
2.3. Obligations for the World Bank Group and their sources. 9
2.3.1. Treaties and other agreements. 9
2.3.2. Relationships agreement 11
2.3.3. Customary Law 12
2.3.4. Due Diligence 13
2.4. Constitutive instruments 13
2.4.1 Interpretation of the IDA and the IBRD articles of agreement. 14
2.4.2. Interpretation of the IDA and IBRD articles by the
World Bank Group. 15
2.4.3. Interpretation against human rights in aid development. 17
2.4.4. Interpret the IDA and IBDR articles with taking into
account human rights. 18
2.5. Conclusion. 22
3.1. The international practice of attribution. 24
3.2. DARIO 25
3.3. Attribution 26
3.3.1. Monitoring bodies 27
3.3.2. The products of the World Bank Group. 29
3.3.3. The WBG Powers to influence the projects 29
3.3.4. Investment Project Financing 30
3.3.5. Development Policy Financing 32
3.4. Due Diligence. 32 3.5. Conclusion. 33 Conclusion 35 Bibliography 38 Chapter 1 Introduction
The World Bank Group (WBG) started as the International Bank for Reconstruction and Development (IBRD) to help Europe recover after the World War II. However, from the beginning, the WBG took early steps to development when it accepted loan application for Chile, Mexico, and Iran. Slowly, the WBG provided loans to other countries in South America and Middle America as development aid. Now, the focus was not only on the reconstruction of Europe but also economic development across the world.1 In the late 1950s, the International Development Association (IDA) was created. Countries not sufficiently creditworthy for the IBRD could obtain loans under IDA. The IBRD only focused on the creditworthy middle income countries, while the IDA articles focused on the poorest countries. Secondly, the ways the IDA loans are financed are different than the IBRD loans. With IDA and other acquired affiliates, the IBRD became known as the WBG and could facilitate loans to the poorest countries.2
However, from the beginning, the WBG was criticized for the lack of human rights in its projects. Human Rights Watch and Amnesty International published reports that the WBG violated human rights through activities and funding.3 Furthermore, the non-governmental originations (NGO) claim the WBG does not recognize due diligence on the matter of human rights. Both NGOs state that the WBG is accountable for human rights violations committed through the WBG’s funded projects. In their recommendations, the NGOs stated the WBG needs to ensure human rights through its policies and try to take all measures to safeguard these rights. This also means that the WBG needs to make sure human rights are respected when it is working together with private actors. Both NGOs claim that these wrongful acts can be attributed to the WBG under international law. However, does the WBG have the obligation to take human rights into account?
Responsibility under international law means a wrongful act that can be attributed to the international organization, in this case the WBG. However, a wrongful act implies duties and obligations under international law. However, the WBG is not part of any human rights treaties, so the obligations resulting from the treaties do not bind it. Therefore, these
1 D. Kapur, J. P. Lewis, ‘The World Bank: its first half century’, Washington DC: Brookings Institution Press
1997, p. 71, 83-84, 136.
2IDA History, website:http://ida.worldbank.org/about/history, History,World Bank Group, website:
http://www.worldbank.org/en/about/archives/history
3 Submission to the World Bank Safeguards Policies Review and update, Amnesty International April 2013,
Abuse-Free Development How the World Bank Should Safeguard Against Human Rights Violations, Human Rights Watch, 2013.
obligations must arise from other sources, like customary law or peremptory norms (jus
cogens).4 Another part of responsibility is attribution. Can the wrongful act to be attributed to the WBG? Can it also be attributed if the states, not the WBG, implements the projects? To better understand this problem, the functioning of the WBG should be explained. The WBG is linked with five independent international organizations within the WBG: International Bank for Reconstruction and Development (IBRD), International Development Agency (IDA), The International Finance Corporation, The Multilateral Investment Guarantee Agency, and The International Centre for Settlement of Investment Disputes.5 This research will only focus on the IDA and the IBRD. The IDA provides loans to low income countries while the IBRD provides loans to middle income countries. Thus, can the WBG be held responsible even if it does not implement the projects? Furthermore, is the WBG competent to take human rights into account according its articles of agreement?
Methodology
The research will be based on the following research method. In the second chapter, the research will be conducted from an internal perspective. For this type of paradigm, the study consists of the description of the existing law concerning a particular topic. To be responsible for a wrongful act, the wrongful act needs to be attributed. What is a wrongful act? What obligations does an international organization have under international law? To answer these questions, I must examine the normative meaning of the WBG’s duties, rights, and powers within the international legal system. Does the WBG have obligations under international law to respect human rights, and where do these obligations come from? The research does adopt a standpoint of interpretation with regard to the meaning of the law. Is the WBG bound by human rights and does the IDA and IBRD articles of agreement leave room to implement these obligations? Thus, the research will examine to the sources of human rights that bind the WBG.
Furthermore, the research will explain the competence of the articles of agreement through the WBG’s point of view and through several legal authors, as well as how the articles of agreement could be interpreted differently and whether the interpretation leaves room for human rights. Thus, the research will prescribe which interpretation of a legal regulation is preferable and whether the articles of agreement allow the WBG to implement the projects
4 J. Wouters, ‘Accountability for human rights violations by international organisations’, Antwerpem: Intersentia
2010. p. 177.
5 M. Ruffer, C Walter, ‘Institutionalized international law’, Baden-Baden: Nomos Verlagsgesellschaft: 2015. p.
with consideration of human rights. This part of the research will be completed from the descriptive perspective.
The third chapter will be also normative in the internal perspective. In this chapter, the second requirement of responsible will be handled. When will the human rights violation be
attributed to the WBG? What are the requirements for attribution under international law and what are the sources of attribution? To answer these questions, the research needs to
investigate whether the WBG has the information and the power to act on this information. The research will closely examine at the policies of providing a loan and the country amount of available discretion. This will determine the attribution
Chapter 2
Human rights obligations under international law for the World Bank Group and whether the articles of agreement leave room to comply with these obligations In this chapter, the research will closely examine a wrongful act of an international organization under international law, and in particular, the research will focus on the WBG. What are the obligations or duties of the WBG under international law? In Chapter 2, the research will discuss the attribution to the WBG.
2.1. Draft articles on the responsibility of international organizations
What is the law on responsibility of international organization? The law on this matter was, for a long time, ambiguous. However, in 2011, the International Law Commission finished the Draft Articles on the Responsibility of International Organizations (DARIO), these rules are not binding and only provide more significant rules applying to international organizations.6 DARIO article 3 entails the following:
Every internationally wrongful act of an international organization entails the international responsibility of that organization.
According to article 4(a), a wrongful act needs to be attributable to the organization under international law and constitutes a breach of an international obligation of the organization.
Article 4 Drafts Articles on the Responsibility of International Organization (Dario)
There is an internationally wrongful act of an international organization when conduct consisting of an action or omission
(a) Is attributable to that organization under international law; an
(b) Constitutes a breach of an international obligation of that international organization.
68 M. Molder, ‘Responsibility of International Organization- Introducing the ILC’s DARIO’ Max Plan Yearbook
In this chapter, the research will more closely examine article 4(b) and the international obligations and duties of the WBG, and in the next chapter, the research will more closely examine attribution 4(a).
2.2. When does an international organization have obligations under international law? To have obligations and responsibilities under international law, the actor, in this case the WBG, needs to have a legal personality. To have legal personality, the law needs to recognize the actor as legal person and the entity needs to have the capacity to maintain certain rights7. In the International Court of Justice (ICJ) advisory opinion reparation for injuries, the Court ruled:
Accordingly, the court has come to conclusion that the organization is an international person. That is not the same thing as saying that it is a state, which it certainly is not, or that its legal personality and rights and duties are the same as those of a state’’, whatever that expression may mean. It does not even imply that all its rights and duties are the same as those of a state. Still less is it same thing as saying as saying that it is ‘’a super-state’’, whatever that expression may mean. It does not even imply that all its rights and duties must be upon the international plane, any more than all the rights and duties must be upon that plane. What it does mean is that it is a subject of international law and capable of possessing international rights and duties, and that it has capacity to maintain its rights by bringing international claims8
In the advisory opinion, the ICJ recognized that an international organization. like the WBG. can have legal personality. Legal personality implies obligations under international law but is limited in comparison to states that possess a general competence. International organizations are governed with the powers created and entrusted by the state. Moreover, the international organization has a distinct will from that of its Member States. These powers limit the function of an international organization as a legal personality. The powers are expressed in their founding treaty or may be created from the founding treaty through interpretation methods, for instance implied powers.9 However, does an obligation also entail
7 M. N. Shaw, ‘International Law’, Cambridge: Cambridge University Press seventh edition 2014, p. 142-150.
R. Portmann, ‘Legal personality in international law’, Cambridge: Cambridge University Press 2010, p. 39-42.
8 International Court of Justice Advisory Opinion, 11 April 1949, (Reparation for injuries suffered in the service
of the United Unions).
9International Court of Justice Advisory Opinion, 8 July 1996, (legality of the threat or use of nuclear weapons),
that an international organization can be held responsible for an international wrongful act? In the advisory opinion of the ICJ, the court has noted:
International organizations are subjects of international law and, as such, are bound by any obligations incumbent upon them under general rules of international law, under their constitutions or under international agreements to which they are parties.10
Therefore, the international organization has obligations from several sources, which will be discussed in the next sections.
2.3. Obligations for the World Bank Group and its sources
The obligations of international law for the WBG can come from several sources: constitutive instruments, treaties, other agreements, and customary law. In this section, the sources of the obligations will be explained, as well as what the obligations consist of.
2.3.1. Treaties and other agreements
There is no doubt that an international organization with legal personality can be bound by treaties it enters with states or other international organizations. Obligations can also come from agreements the international organization closed with other entities, such as a headquarters agreement or relationship agreement. In the case of the WBG, duties and obligations of a loan are set out in the legal agreement.
One source of human rights is the United Nations (UN) charter. The WBG is a specialized agency of the UN. One of these obligations of human rights, according to authors, is article 103 UN Charter, which binds the WBG:
In the event of a conflict between the obligations of the Members of the United
Nations under the present Charter and their obligations under any other international agreement, their obligations under the present Charter shall prevail.
The UN charter only provides obligations for states. However, through the case law of the ICJ, the charter is also applicable to international organizations. Because article 103 UN
10 International Court of Justice Advisory Opinion 8 July 1996, (legality of the threat or use of nuclear weapons),
Charter uses the term international agreement, judge Jessup in the case ICJ South West-Africa concluded that an international treaty convention like the Bretton Wood conference is not excluded from article 103 UN Charter, which later in the ICJ Nicaragua was confirmed. 11 Article 1(3) UN charter states the following:
All regional, bilateral, and even multilateral, arrangements that the Parties to this case may have made [. . .] must be made always subject to the provisions of Article 103 UN charter12
When states create a new international organization, that organization will be bound by article 103 of the UN charter because the states are subject to these rights, and these rights will be passed onto the international organization. Thus, the international organization is bound by the same rights. Therefore, the obligations of article 103 of the UN charter also cover the articles of agreement of the WBG and should have a direct influence on the policies of the WBG toward human rights. 13 This means the articles of agreement need to be applied in a manner that respects the UN charter. Additionally, a member of the ILC stated, “article 103 of the UN charter is hierarchically superior to those of any other treaty, whether earlier or later”. This means the UN charter has the direct power to influence the articles of agreement when human rights come into play in terms of WBG’s policies because the aim of the UN is to promote maintenance of peace and security, and promotion and protection of human rights countries should give effect to UN charter. Through article 1(3) of the UN charter, the UN shall promote the Universal Declaration of Human Rights (UDHR), the International Covenant on Civil and Political Rights (ICCPR), and the International Covenant on Economic Social and Cultural Rights (ICESCR
).
Therefore, the articles of agreement should be applied in a matter that respects human rights and refrains from undermining the human rights in the WBGs financed projects.14 However, some writers disagree with this viewpoint, stating the relationship agreement between the UN and the WBG. In this agreement, article IV paragraph 3 states that the UN will refrain from making recommendations from particular loans;11 International court of Justice South West –Africa 1962. (Ethiopia, vs. South Africa, Liberia vs. South Africa)
Dissenting opinion judge Jessup.
12 Military and Paramilitary Activities in and against Nicaragua (Nicaragua v USA) (Jurisdiction and
Admissibility) [1984] ICJ Rep 392, para 107, M. Ssenyonjo, ‘Economic, social and cultural rights in international law’, Portland: Hart Publishing 2009, p. 131.
13 M. Ssenyonjo 2009, p. 131. International Court of Justice Military and Paramilitary Activities in and against Nicaragua 27 june 1987, (Nicaragua v. United States of America)
moreover, if a decision is against the articles of agreement of the IBDR and IDA, the WBG will refrain from implementing the resolution.15
A second obligation from the UN charter is article 48(2). According to Article 48(2) UN charter, a resolution by the Security Council for the maintenance of international peace and security, stating member states, including international agencies, shall take appropriate actions. However, this is not binding for the WBG16 because a decision of the Security Council often will be against the articles of agreement for the highly political part of the resolution of the Security Council. The WBG is not allowed to make decision influenced by the political character of a member state.17 Furthermore, according to the relationship agreement between the UN and WBG, any Security Council decision against the articles of agreement will not be taken into consideration. However, seeing that the WBG board of executive directors consists of three out of five permanent members of the Security Council, it would be highly unrealistic a loan would be granted were sanctions opposed by the Security Council.18
2.3.2. Relationship agreement
The UN and the WBG closed a relationship agreement to bring duties and responsibilities for international organizations within the framework of the UN. The WBG is a specialized agency of the UN and has entered into a relationship agreement with the UN economic and social council (ECOSOC), which defined the terms on which the WBG shall be brought into the relationship with the UN (article 63 UN Charter).19 This relationship agreement describes the relationship between the ECOSOC and the WBG. In the relationship agreement, agreements were made about consultations, business considerations, and exchange of information concerning economic and social rights. However, the relationship agreement only
15
16S. A. Bleicher, ‘UN v. IBRD: A Dilemma of Functionalism’, University of Wisconsin Press Vol. 24, No. 1
1970, p. 31-47.
17 Article II, paragraphs 2 and 3,‘ relationship agreement’, International Organization, Vol. 2, No. i, p. I99.
S.A.Bleicher 1970, p. 31-47.
18 M. Darrow, ‘Between light and shadow: the World Bank, the International Monetary Fund and international
human rights law’, Oxford: 2003, p. 120-128.
19 W. van Genugten, ‘The World Bank Group, The IMF and Human Rights. A Contextualised Way Forward’,
provided a framework for co-operation between the WBG and ECOSOC, not binding rules for protection of social and economic rights.
2.3.3. Customary Law
International organizations cannot be bound by human rights treaties their member states are party to unless the international organization is itself party to the treaty. However, several human rights became customary law, which is binding for every actor in the international community. However, which human rights have become customary law? For a rule to become customary law, there are two basic elements: the actual behavior of states and the subjective belief that such behavior is law (opinio juris).20 However, which rights have become customary law is highly debated. Some scholars claim that the universal declaration of human rights is customary law.21 However, other scholars disagree and claim only the prohibition of genocide, slavery, and the principle of non-discrimination are customary law, which are the only jus cogens rights. Furthermore, these rights have the status of erga omnes, which means every country has jurisdiction over these committed crimes.22
Moreover, customary law is an evolving process. Certain human rights treaties established supervising bodies in the domain of human rights. Some of these bodies, like the Committee on Economic, Social and Cultural rights, provide general comments, but other supervising bodies create case law that establishes an authoritative view on the interpretation of human rights. Even if these general comments are not binding, the interpretations give rise to normative consensus on the meaning and scope of a particular human right. This means that the obligations coming from the human rights can grow through the years because of new interpretations, or new obligations can be created based on the present-day treaty interpretation.23 Additionally, the WBG is bound to the principles of international human rights law, which obliges the organization to make reparation of a wrongful act and the principle of due diligence. These principles do not yet have sufficient practice to become customary law, but the principle derives from common rules drawn from legal systems around
20 M N. Shaw 2014, p. 53, C.F. Amerasinghe , ‘Principles of the instutional law of international organization’
Cambridge: Cambridge University Press 2nd copy 2005, p. 390-395.
21 A. Clapham, ‘Human rights obligations of non-state actors’, Oxford 2006, p. 85-88. 22 M. N. Shaw, 2014, p. 201.
the world and which can be applied in the international community. The WBG is bound to respect these principles and can be held responsible if it does not.24
What happens if one of these laws is breached? Article 30 of the Convention on the Law of Treaties has codified the law on treaties between international organizations and states that any provision incompatible with jus cogens is void.25
2.3.4. Due Diligence
With human rights comes due diligence. The WBG must actively perform measures to reduce or eliminate violations within its projects. Due diligence for international organizations is ambiguous and not as well developed as the due diligence for states. Human rights do not only consist of respecting these rights but also of the duty to protect and an obligation to fulfill. To protect means a duty for the WBG to take measures to prevent human rights violations under its authority or interfering with human rights. This consists of positive obligations for the WBG to take measure and regulations to prevent these violations. Furthermore, if a violation occurs, the WBG needs to take measure to prevent, punish, or investigate that violation within its powers granted by the articles of agreement.
The obligation to fulfill means the WBG needs to take measure to promote and ensure the goal of full realization of human rights. The right to fulfill can be subdivided in obligations to facilitate, promote, and provide. Thus, the WBG needs to take positive measures to promote human rights in the projects, as well as to maintain and restore those rights.26
2.4 Constitutive instruments
The WBG provides loans to countries to fund projects. WBG powers to provide these loans are based on the IDA and IBRD articles of agreement. Those articles create obligations, duties, and limitation to the powers of an international organization. However, the obligations, duties, and limitations can be interpreted in different ways with different methods. When the articles are applied in particular circumstances, disagreement on the interpretation may occur because the meaning of the text can be unclear. This can happen because the intention of the founding
24 Moshe Hirsh, ‘The responsibility of international organizations towards third parties: some basic principles’,
Dordrecht: Martinus Nijhoff Publishers 1995, p. 37.
25, P. N Bimal ‘Responsibility of international organizations towards other international organizations: law and
practise of the United states, The World Bank, The European Union and the international atomic energy agency’, Cambridge: Eastern Book Company Lucknow 2013, p. 143-145.
fathers and purpose of the text is unclear. Thus, the meaning of a text can appear subjective. Therefore, the constitutive instruments are the way to help with the true meaning of the articles of agreement.
The articles of agreement should be read by examining the meaning of the texts. According to article 31 of the Vienna Convention on the Law of the Treaties (VCLT), the articles should be read in accordance with the intention and purpose of the treaty and the meaning may be modified with preparatory work of conventions.
Article 32 of the VCLT gives supplementary means of treaty interpretation. Article 31 VCLT leaves the meaning ambiguous or obscure or the result is manifestly absurd or unreasonable.27
Partly based on the convention, several ways of interpretation have evolved over time. Teleological interpretation is based on Article 31 VCLT and the treaty text must read in the object and the purpose together with the context in giving the text a natural and ordinary meaning.28 The research will look at different writers’ interpretations of the IDA and IBRD articles.
2.4.1 Interpretation of the IDA and the IBRD articles of agreement
The WBG always has been criticized by NGOs and scholars for the lack of human rights policies in its loans.29 The projects considerably impact the lives of people in the world, which also can result in human rights violation. The criticism over the decades did not change the WBG’s view on the topic of human rights, unlike the environmental record, which led to implementation of several of environmental policies within the WBG policies. One reason why the WBG never implemented human rights is because human rights are beyond its mandate. In the IBRD and IDA articles of agreement, the following is stated:
IBRD Articles of Agreement, Article IV, Section 10, Political Activity Prohibited:
The Bank and its officers shall not interfere in the political affairs of any member; nor shall they be influenced in their decisions by the political character of the member or members concerned. Only economic considerations shall be relevant to their
27 C.F. Amerarisnghe 2005, p.30-5.0
28 C.F. Amerarisnghe 2005, p. 44, 1960 ICJ, p.195.
29 Submission to the World Bank Safeguards Policies Review and update, Amnesty International April 2013,
Abuse-Free Development How the World Bank Should Safeguard Against Human Rights Violations, Human Rights watch, 2013
decisions, and these considerations shall be weighed impartially in order to achieve the purposes stated in Article I.
IDA Articles of Agreement, Article V section 6, Political Activity Prohibited:
The Association and its officers shall not interfere in the political affairs of any member; nor shall they be influenced in their decisions by the political character of the member or members concerned. Only economic considerations shall be relevant to their decisions, and these considerations shall be weighed impartially in order to achieve the purposes stated in this Agreement.
2.4.2. Interpretation of the IDA and IBRD articles by the World Bank Group
To grant a loan for a project the WBG can only use economic considerations. The words economic and political are not further defined in the articles of agreement.30 Thus, the meaning of the words economic and political was left open for interpretation. The WBG maintained its position over the years that it is not able to consider human rights; however, the interpretation was not static and evolved over time.31 The WBG interpreted human rights as political, which are outside the mandate of the IBRD and IDA articles of agreement. For example, in the sixties, the General Assembly took several resolutions and appealed to the WBG to cease lending money to Portugal and South Africa because of the gross human rights violations in these two countries.32 The president of the WBG, George Woods, responded with a statement that these loans would be treated like every other loan, and the WBG could not take into account human rights because these rights were outside its mandate.33 However, in the nineties, the WBG slightly changed its view. The Senior Vice President and General Counsel of the WBG, Ibrahim Shihata, explained that the WBG will take human rights into account if these rights have direct economic effects.34 However, the WBG still claimed that defined human rights are not possible with development. Human rights would frustrate the development in the projects and undermine efficiency. However, the WBG claims that reducing poverty and improving the economy of a country will contribute to promoting social
30G. Bordnig, ‘The World Bank and Human Rights: Mission Impossible,’ Praxis the Fletcher Journal of
Development Studies Volume XVII 2002, p. 1-5.
31 S. Fujita, ‘The challenges of mainstreaming human rights in the World Bank’, The International Journal of
Human Rights Volume 15 issue 3 2011, p 376-378
32 M. Ssenyonjo 2009, p. 129
33 See Statement of IBRD President Woods to Executive Directors on Mar. 29, 1966, in Statement of IBRD
General Counsel to U.N. Fourth Committee, 21 U.N., J.D. Ciorciari 2000, p.352
rights.35 Thus, the WBG became a little more open to human rights, and this development continued in the new century. Moreover, the WBG started working more closely with human rights bodies and other human rights institutions. The WBG participated with the IMF in an official meeting with the Committee on Economic, Social and Cultural Rights, making several statements concerning human rights in relation to the development.36 Furthermore, representatives of the WBG participated in meetings with human rights academics at the University of New York. Mr. Ingram, the Bank's representative, spoke to the UN Working Group on the Right to Development in 2004, saying the WBG strived to position human rights as a significant consideration in its formulation assistance programs and strategies. WBG showed it was more open to human rights than in the beginning of its foundation. This development continued when Danino, a former General Counsel and Vice President of the WBG, established a working group on human rights in 2003. The workgroup needed to analyze the legal framework and the implementations of human rights and published a report:
Development and Human Rights: the Role of the World Bank Group.37 However, the human rights were only connected with the development and the economic advantage they could provide. Moreover, the WBG provides projects benefiting social, economic, and cultural rights but does not promote the rights though its projects, which is not the same. The downside of this point of view is that it could neglect the human rights that do not have economic obligations.38 Overall, the WBG stresses that borrower countries are responsible of their human rights obligations and implementing the project according to their obligations. In Danino’s opinion, the WBG is designed to support member states to fulfill their obligations.39
2.4.3. Interpretation against human rights in aid development
In the sixties and seventies, researchers agreed that a premature move to democracy and human rights could harm development.40 Eric Posner still finds human rights problematic within the context of aid development. According to Posner, human rights are too ambiguous,
35 H. Korinna, ‘Rhetoric and reality, Human rights and World Bank’, p. 228.
36 P. Hunt, ‘Relations Between the UN Committee on Economic, Social and Cultural Rights and International
Financial Institutions in World Bank, IMF and Human Rights’, Nijmegen: Wolf Legal Publishers 2003, p. 139 – 155. S.Fujita, ‘The challenges of mainstreaming human rights in the World Bank’, The International Journal of Human Rights Volume 15 issue 3 2011, p. 377.
37Development and Human Rights: The Role of the World Bank, The International Bank for Reconstruction and
Development/ The World Bank September1998. S. Fujita 2011, p. 374-396.
38S. Fujita 2011, p. 374-396.
39 Danino, ‘Legal Aspect of the World Bank on Human Rights’, The International Lawyer Vol. 41 No. 1 2007, p.
contested, and politically charged to be used as guidance. 41 Human rights are numerous and covering all aspects of life. This is magnified by the fact that there are various international institutions covering the treaties with different interpretation on human rights. Furthermore, the borrower government can be corrupt and violent. Corrupt government official resort easily to violence when problems occur, and the WBG would find itself implicated in human rights violations. The project would be blocked for this reason to protect the people from the possibly occurring violations. However, the neediest people for aid would be blocked out. This is especially true for the poorest countries, which almost always have corrupt governments. Furthermore, because of the diversity of the countries, it is hard to determine whether the human rights violations can be controlled and whether these violations will occur. Posner expresses again that this makes implementing of human rights even harder because of the ambiguous meaning of these rights.
Several scholars did calculate with extensive models whether human rights, like political rights, had a positive influence on development.42 The authors considered several facts: a larger number of people can effectively influence the decision making and the decrease of government discretionary powers. The authors acknowledged that democracies enhance the political stability and improve the quality of governance. Also, the government is more aware of the population’s needs contrary to the dictatorial regimes. For the model, the writers studied the period between 1970 and 1989. In this period, more countries became democracies than in other periods. Overall, the writers determined democracy has a negative impact on the development. The democracy increases the human capital accumulation and decreases physical investment rates. Furthermore, less robust democracy makes the income equality larger. It seems that there is tradeoff between measurable economic costs and social benefits.
According to the authors, democracy, including human rights and social rights, will not always benefits the development of a country. Further, human rights are ambiguous and are difficult to implement in a project since the WBG cannot foresee the human rights issues because of the diversity of cultures and countries. The authors agree with the WBG’s point of view.
2.4.4. Interpret the IDA and IBDR articles taking into account human rights
40 J. Isham, D. Kaufmann, L. H. Pritchett, ‘Civil Liberties, Democracy, and the Performance of Government
Projects’, World Bank Economic Review 1997, p. 219-242.
41 E. A. Posner, ‘Should Human Rights Law Play a Role in Development?’, The World Bank Economic Review, 42J. Tavares, R.Wacziarg, ‘How Democracy Effects Growth,’, Los Angeles: University of California 2000,
The question arises whether the WBG acts outside its mandate if it implements human rights in its policies and activities. In other words, are the human rights issues political and thus cannot be taken into consideration? Except for “raising conditions of labor” and “maintenance of high levels of employment,” there is no mention of human rights in the articles of agreement. Does this mean that human rights can be implemented in WBG policies and activities?43 The research will more closely examine several arguments why human rights can be implemented in the activities and policies of the WBG without exceeding the mandate.
Article 1 IBRD states:
To assist in the reconstruction and development of territories of members by facilitating the investment of capital for productive purposes, including the restoration of economies destroyed or disrupted by war, the reconversion of productive facilities to peacetime needs and the encouragement of the development of productive facilities and resources in less developed countries.
Article 1 IDA states:
The purposes of the Association are to promote economic development, increase productivity and thus raise standards of living in the less-developed areas of the world included within the Association's membership, in particular by providing finance to meet their important developmental requirements on terms which are more flexible and bear less heavily on the balance of payments than those of conventional loans, thereby furthering the developmental objectives of the International Bank for Reconstruction and Development and supplementing its activities.
When the IBRD articles of agreement were established in Bretton Woods in 1944, the drafters could not foresee how international law would evolve. The view of the concept of economic development has changed since the treaty was adopted to help reconstruct Europe after WW II. Therefore, many scholars believe that the WBG need the interpreted the IDA and IRBD in a dynamic way. This makes a strong case for the integration of human rights in the IDA and IBRD articles of agreement. Because of the evolution of international law in the last 60 years, human rights can fit inside the scope and purpose of the articles of agreement.44
43M. Ssenyonjo 2009, p. 131. 44G. Bordnig, 2002, p. 6
As with the words economic and political, development is not defined in the treaty. Can human rights be taken into account if they are an economic consideration for development? According to several scholars, human rights are necessary for development. 45 Amartya Sen claims denying the freedom to allow people to live the lives they value could have a negative impact on a country’s development. In his view, there are five instrumental freedoms that would benefit development: political freedoms, economic facilities, social opportunities, transparency guarantees, and protective security. These freedoms would mean, for example, good health, literacy, education, participation through associations, and freedom of expression.46 There is a direct link between these rights and economic development. With these freedoms, the population has the means to draw attention to their general needs and forcefully demand action when the resources are insufficient. Because of these rights, the government could act on matters discussed in the public debate, which could prevent disasters. In Amartya Sen’s opinion, economics needs open public debates and discussions, which could prevent economic disaster. This view that economic development and human rights go hand in hand is also acknowledged in the international community. The preamble of the declaration of the development, which was adopted by the General Assembly in 1986, states:
bearing in mind the purposes and principles of the Charter of the United Nations relating to the achievement of international co-operation in solving international problems of an economic, social, cultural or humanitarian nature, and in promoting and encouraging respect for human rights and fundamental freedoms for all without distinction as to race, sex, language or religion.47
Moreover, several international organizations, like UNICEF and the European Union (EU), adopted regulations to protect and respect human rights as non-state actors.48 For example, the EU adopted the charter of fundamental rights and adopted human rights in its development policies. Through the Cotonou Agreement, the EU shall promote human rights in the economic, social, and cultural development of the African, Caribbean, and Pacific States.49 Within the United Nations (UN) framework, UNICEF adopted several human rights based on
45 S. Amartya 2011, Chapter 7
46S. Amartya, 2011, Chapter 3
47 A/RES/41/128 4 December 97th plenary meeting general assembly UN 48G. Bordnig, 2002, p. 6.
the Convention on the Rights of the Child (CRC) and the Convention on the Elimination of All Forms of Discrimination against Women (CEDAW).50
According to the author S. Amartya, the vision on development of the last years’ fundamental rights and civil and political rights became an essential part of development. Furthermore, the international community is slowly accepting that human rights are a part of economic development.
In another essay, “Civil Liberties, Democracy, and the Performance of Government Projects”, the writers calculate the empirical link between civil liberties and the performance of government projects.51 The calculation suggested that countries with better civil rights have positively influenced the projects. According to the writers, this is due to the citizens’ ability to influence the projects. The influence often comes in the form of riots, protest demonstrations, and strikes, which lead to civil unrest but contribute to better project decision making. The civil rights give citizens a way to hold the government accountable. These rights give citizens a voice and increase public accountability, which increases the efficiency of government actions. The calculations even suggest that liberties are positive for the development and not the opposite, like many critics say. With absent civil rights, citizens’ participation is suppressed, which negatively influences the government performance.
50 G. Bordnig, 2002, p. 7.
Another writer criticized the way the WBG distributed development aid.The WBG reasoned that through its programs, the economy will benefit and this will slowly improve the standards of living, which will benefit the citizens’ civil liberties. However, Korinna Horta disagrees with this view. 52 In her opinion, the WBG’s projects do the opposite and do not contribute to improving citizens’ rights o. Like Sen Amartya, Horta concluded political rights are necessary to identify the economic needs of a group or country. Moreover, in her opinion, money is not the answer to problems but is often the foundation of problems and strengthens the
authoritarian regimes. Furthermore, the WBG forces the regimes to make policy changes that influence and even change the political dynamic of the country and economic governance. In addition to strengthening the regimes, the WBG also influences the private financial institution establishing co-financing arrangements, which enforce these regimes further. Horta uses the example of the Democratic Republic of Congo. Congo has many natural recourses, such as diamonds, gold, colton, and cobalt. Its neighboring countries, Uganda and Rwanda, show an increase in exports of these recourses, even passing their own domestic production levels.53 Several reports show that the two countries implemented a system of control
established by the Rwandan patriotic army and Uganda military commanders. This behavior also contributed to the instability of the region. Although these facts were confirmed by several international organizations like the UN and several NGOs, the WBG praised the governments for their economic performances, and the countries received long term loans. Moreover, the two countries were debt released and are no longer considered highly indebted, poor countries. This example shows a contradiction between promoting within the governments to make governance reforms to reduce poverty and the lack of consideration for the political situation contributing to aggravate the poverty in a neighboring country. Therefore, although the WBG is not allowed, by the articles of agreement, to make decisions based on political motivation, the WBG influences the same politics with its loans and policies. Horta concludes that, without civil rights, aid development is not efficient at reducing poverty. Moreover, even the WBG is not allowed to make political decisions. However, with its loans, the WBG often forces the governments to make policy changes, which can negatively influence the WBG’s goal of reducing poverty. If human rights are taken into account, the goal could be better achieved, limiting the negative impact of policy changes.
52 K. Horta, ‘Rhetoric and Reality: Human Rights and the World Bank Boundaries in the Field of Human Rights’
Harvard Human Rights Journal Volume 15 2002, p.227-243.
53K. Horta 2002, p. 227-243. Final report of the Panel of Experts on the Illegal Exploitation of Natural Resources
However, the WBG cannot interpret the articles of agreement however it wants. It does not have the freedom to do this. When the WBG interprets the IDA and IBRD articles of agreement too widely, the interpretation can become ultra vires. This mean the international organization surpassed its power. Ultra vires is claimed by a member state or an organ of the international organization that disagrees with how the powers are used. Often the dispute settlement organ is competent to deal with this subject, as in the case of the WBG inspection panel. Ultra vires can result from surpassing acts or resolutions from the executive directors or president, powers derived from IBRD or IDA articles or subsidiary legislation, or duties and obligations coming from other sources, like the customary law or the general principles of law.54
2.6. Conclusion
The WBG has human rights obligations under international law. The obligations can come from several sources: constitutive instruments, treaties, other agreements, and customary law. Furthermore, the WBG can bind itself to human rights through treaties and agreements. In addition, article 103 UN charter cannot bind the WBG to human rights because the IDA and IBRD articles of agreement, which forbid decisions about loans to be influenced by politics and the resolution of the Security Council. Additionally, article 103 UN charter cannot be binding considering its high political value, which is confirmed by the relationship agreement between the UN and WBG. Another source of human rights is customary law. Even if the limited amount of rights is considered customary law, customary law is an obligation to all actors in the international law, so even to an international organization like the WBG. Due diligence creates positive obligations for the WBG. The WBG needs to create measures to prevent violations in its projects. Furthermore, any provision in violation of customary law will be void according to article 31 VCLT. Another source of duties and obligations is the IDA and IBRD articles of agreement. The articles of agreement give the WBG the power to provide loans for projects. Articles of agreement also consist of limitations, for instance, the WBG decision cannot be influenced by politics. What does the word exactly mean? According to the WBG, human rights is a political topic the WBG cannot consider when approving a loan. However, several writers claim the contrary and that it is possible for the human rights to be read in the word: development. Nevertheless, human rights are ambiguous and difficult to implement in every project. In addition, every country needs take a different
approach, and it can be hard to foresee whether there is a human rights violation. Furthermore, does the WBG deprive the poorest countries of loans for a human right violation? This decision can deprive the poorest people of improving the country.
Chapter 3
Attribution of a wrongful act under international law
To have obligations under international law does not mean the WBG is also responsible when a violation occurs. To be responsible for a human right violation, that violation needs to be attributed to the international organization. In this chapter, the research will examine under which case a human rights violation can be attributed to the WBG. Is attribution possible even if the WBG never implement the loans? Is the WBG also responsible if it grants loans to countries with poor human rights histories, which could allow the WBG to foresee these violations? Ultimately, can the violations in these projects also be attributed to the WBG for granting a loan?
3.1. The international practice of attribution
Important for attribution is effective control because this determines the organization’s power to prevent the violation. The WBG needs to exercise effective control over an individual, organization, or state that commits the wrongful act.55 These rules are used in the context of state responsibility but are also applicable for international organizations based on the practice in the international community. However, joint responsibility of the international organization and the member state is possible as well if both shared the command and control. This practice is partly derived from the United Nations forces’ experience. The member states contribute troops to the UN. The status of these troops can be found in the agreements between the member states and the UN. The troops come, for the duration of the mission, under the authority of the UN. The supreme power of decision in operational and external matters relating to the force lies within the UN. Furthermore, the UN is independent of the policies and control of any nations. The practice of the UN military missions is the basis for the practice on the matter of attribution of international organizations. Thus, for the WBG, the crucial factor is whether, in a project, there is certain discretion of implementation left to the state. If a state does not have this discretion, the human right violation can be attributed to the international organization. However, if a state has this discretion, the state will be responsible according to the rules of Responsibility of States for Internationally Wrongful Acts. Additionally, the last method of attribution is when the WBG authorizes a member state to adopt a measure toward third parties that contributed to a human rights violation. Therefore,
the main factor of responsibility is the control exercised over the act. This control determines whether the act can be attributed to state.56 Thus, there is a direct link between the decision and the outcomes, which results in human rights violations.
3.2. DARIO
The framework of attribution in the DARIO will be explained. Attribution is explained in articles 6-9 DARIO. Article 6 DARIO lays down the basic rule for attribution:
Article 6 Conduct of organs or agents of an international organization
1. the conduct of an organ or agent of an international organization in the performance of functions of that organ or agent shall be considered an act of that organization under international law, whatever position the organ or agent holds in respect of the organization.
2. The rules of the organization apply in the determination of the functions of its organs and agents.
Thus, attribution is only possible within the official conduct of the WBG through agents and/or organs within the framework of their official capacity and within the overall functions of the organization. Even if the agent or organ exceeds its overall capacity and contrives its instruction, the act will be considered an act of the organization (article 8 DARIO). Furthermore, an act can be attributed if the WBG controls the state that commits human rights violations.
However, in the case of the WBG, human rights violations will not occur when the international organization acts on its own. Most human right violations will occur when the borrowers/state implements the project and the WBG only provided aid or assistance to the borrower. In the DARIO, aid and assistance is covered in the articles 14-16:
Article 14
Aid or assistance in the commission of an internationally wrongful act An international organization which aids or assists a State or another international organization in the commission of an internationally wrongful act by the State or the latter organization is internationally responsible for doing so if:
(a) the former organization does so with knowledge of the circumstances of the internationally wrongful act; and
(b) the act would be internationally wrongful if committed by that organization.
Aid or assistance can also mean loans, like the IDA and IBRD loans. Furthermore, require assistance at a significant level of contribution. However, seeing that the approval of an IDA or IBRD loan often triggers financial aid of a private actor, it can trigger responsibility even if the loans contributes just a small portion of the total amount. However, the second requirement, that the WBG needs to assist knowledge of the circumstance of the international wrongful act, according to the commentary, the articles need to be read as intended to commit a wrongful act, which may, for most cases, eliminate the WBG’s responsibility. In addition, the scope of responsibility becomes narrower with the third requirement. The WBG is not part of any human rights treaties so is only bound to the human rights mentioned in Chapter 1. This means that states can commit a human rights violation that is not an obligation for the WBG.57
3.3. Attribution
To determine whether a human right violation can be attributed to WBG, one must examine the monitoring bodies of the WBG and their powers, as well as the powers of the WBG organs over the projects. Does the WBG has the necessary information to make appropriate decisions, and do these bodies have the power to adjust the projects, making binding decisions, or does this power lie only with the state?
A WBG project has several stages: post-implementation evolution, country assistant strategy, identification, preparation, appraisal, negotiations and board (after this stage, a loan
57 August Reinisch, ‘Aid or Assistance and Direction and Control between states and International Organizations
in the Commission of Internationally Wrongful Acts’, International Law Review vol. 7 2010, p. 66-73. Draft articles on the responsibility of international organizations, with commentaries, International Law Commission 2011, p. 37.
agreement is signed) implementation and supervision, and implementation and complication.58
3.3.1. Monitoring bodies
The internal audit will monitor through the whole cycle and report to several organs in the WBG: the department of internal auditing. This body has a mandate the assists the WBG in overseeing its finance, accounting, risk management, and internal controls. The body reports to the president of the WBG and operates under the audit committee, which assists the board and oversees the external auditors. The body has broad monitoring powers and even includes reports about efficiency/effectiveness of operations and how to improve the project when violations that could endanger the reputation of the WBG occur. However, the department only monitors and does not have any powers to make changes to the projects. That power lies with the president and the Board of Executive Directors. 59
Another monitoring body is the Independent Evaluation Group (IEG), which does not fall within the WBG organization. The IEG reports directly to the Board of Executive Directors and has access to all reports and bank staff. The IEG evaluates the projects several times a year with its Project Performance Assessment Reports (PPARs). The evaluation primarily focuses on the economic aspects of the projects and the goals the projects intended to reach. For this report, the IEG visits the location to assess the performance and results. However, this body cannot make decisions in the project; that is yet again the responsibility of the Board of Executive Directors. The IEG’s only task is to inform the WBG.60
The last body that monitors the projects from identification to end is the Quality Assurance Group (QAG). This body monitors the projects closely and reports to the managing director of operations. The managing director of operations falls under the supervision of the borrower, which carries out the project. The QAG evaluates the policies, program, and procedure while they are in progress and while changes can be made. This body was made after reports showed that most of the IDA and IBRD projects would not achieve their objectives. To change this alarming situation, the President, J.D. Wolfensohn, created the QAG to counter
58 Focus on sustainability, World Bank Group 2004, Chapter 3
59 Annual report internal audit vice presidency, World Bank Group 2010
60 Independent evolution group, World Bank Group, http://ieg.worldbankgroup.org/evaluations, Monitoring
and evaluation frameworks and the performance and governance of international funds, African Development Bank August 2011, p. 75-82.
this development.61 These are the bodies monitoring throughout the whole cycle; however, there are other monitoring bodies that only partly monitor the projects.
These are not the only bodies that evaluate and monitor the projects of the WBG. Department of Institutional Integrity investigates fraud and corruption, which will not be discussed in the research because it out of scope. Furthermore, the inspection panel creates an independent platform for victims or private citizens who believe that their interests could be harm by the WBG, but this is a matter of accountability, which also lies beyond the scope of the research.62 Furthermore, a country needs to create a national Monitoring and Evaluation Unit that coordinates national monitoring and evaluation activities. This body will establish regional bodies and supervise them. In addition, the national unit needs to create guidelines to collect and analyze data. This way, the WBG creates a system to allow the state can recognize the problems and allow adjustments to the program while it is still being implemented. Thus, the WBG does not focus on the human rights; however, the monitoring systems do provide a way to respect human rights obligations provided by human rights treaties, which the borrower/country is bound to.63
In addition, local NGOs are allowed to evaluate and monitor the projects. The NGOs will put pressure on the WBG to act if there is a violation in a project, but their capabilities are limited.
The research shows that the monitoring bodies report to the Board of Executive Directors. Thus, what is in the board’s capabilities to make the borrower make adjustments and force that borrower to respects its obligations? The IDA articles of agreement article VII section 5(a) and IBRD article VI Section 5 gives the Association the power to permanently suspend its operations by a majority vote from the Governors. However, under which circumstances can these powers be used? In the next section, the powers of the organs will be explained.
3.3.2 The products of the World Bank Group
61I. Bencheikhn, A.Greard, S.Rinaldi L. von Trapp, ‘A parliamentarians’ guide to the World Bank’, April 2005. 62 Focus on sustainability, World Bank Group 2004, Chapter 3.
63 Focus on sustainability, World Bank Group 2004, Chapter 3, BP 10.00 Investment Project Financing Bank
Several bodies have decision power over the WBG financing products. The products where human rights violations can occur are Investment Project Financing and the Development Policy Financing,which are part of the IBRD and IDA. These two instruments are divided into several programs. For example, the Investment Project Financing has several programs aimed at different goals: specific investment loans, sector investment and maintenance loans, adaptable program loans, and learning and innovation loans. The products of the Investment
Project Financing have all focus on long-term projects of five to ten years. This loan is used for different aims: capital-intensive investments, agricultural development, service delivery, credit and grant delivery, community-based development, and institution building. In these loans, the PPAR and IEG both report to the Board of Executive Directors.64 In the Bank Procedures policies of the Investment Project Financing, the project participant(s) is responsible for meeting its contractual obligations set out in the legal agreements. The role of the WBG in the project is to periodically assess the project and review the monitoring, by the borrower or project participant(s), of results and risks. The WBG can take appropriate measures, regulated in the legal agreement, if needed. In the legal agreements, several policies are designed to protect people who could be harmed by the projects. These policies were created from past experiences in which the WBG encountered problems.65
3.3.3. The WBG powers to influence the projects
According to the Investment Project Financing bank procedures, the WBG can take several measures: cancellation of bank loan amounts; bank loan disbursements; suspension of disbursements; and suspension, cancellation, and termination of bank guarantees. These actions are based on the legal agreement. In this agreement, the WBG and the participant agree on the amount of loan or credit and under which terms and conditions the loan is provided.
3.3.4. Investment Project Financing
64Products and services, financing instruments ,The World Bank, website:
http://www.worldbank.org/en/projects-operations/products-and-services
65 O.P 10.00 Investment Project Financing Operational Policies, revised July 1 2016, The World Bank
For the future borrower to be granted a loan, the country needs to pass the preparation stage.
The preparation stage includes identification, assessment and appraisal of the project, various interim processing, decision steps, and approval. In the identification stage, the participant needs report these needs and include several points mentioned under point 5 of the Bank Procedures.
Point 5(e) states:
as appropriate, an environmental assessment category for the Project and indicates any other potentially applicable requirements under the Bank’s social, environmental and other policies.66
The participant needs to take these policies into account and implement them in its project. These policies issue a set of guidelines linking the participant’s activities to some human rights. Thus, the WBG tries to ensure sustainable development and not just economic growth. This is acknowledged by policies that make the participant consider the environmental and social issues, including poverty, inequality, and protection of indigenous people.67
In the preparation, the participant needs to take these policies into account, and the policies will be assessed by the WBG. In the procurement policies annex VII 1.1, the borrower must comply with the sustainable procurement, which includes the mentioned documents.68 Furthermore, sustainability is an integrated part of the loan, according to the introduction of this document. What this includes is further elaborated in several policies. For example, with regard to indigenous people, the WBG will determine whether there are indigenous people in the area, and the participant is obliged to consult these groups. The participant needs to respect the culture, traditions, and the land as much as possible. This will be set up in an indigenous people plan and reviewed by the WBG, which will decide whether measures that ought to be taken are enough to protect the rights of the indigenous people.69 These policies are created on the bases off past negative experiences, which negatively influenced the projects. This report will be balanced against the risk and results, which consider the social and economic impact and balance it with the results.
66 BP 10.00 Investment Project Financing Bank Procedures, April 2013, Revised July 2016, The World Bank
Operations Manual
67 M.Ssenyonjo 2009, p. 132-133.
68 The World Bank Procurement Regulations for IPF Borrowers, July 2016
In the operational manual, regarding indigenous people, the involuntary resettlement task team has more powers. Throughout the project, the task team supervises compliance with the legal instruments and reports to the borrower and to the regional management for prompt corrective action. The regional management is part of the WBG. The task team reviews project resettlement planning and implementation during the early stages of the project implementation, and when problems occur, the task team will take appropriate measures.70 During the implementation process, the WBG staff helps the borrower provide information on how to comply with the policies, and the staff helps with providing information relating to the borrowers situation. The WBG staff receives its information from different sources and from the borrower’s past experiences with the WBG. In the preparation stage, the WBG only has a supportive role to deliver the documents according to the WBG rules; the borrower will have the leading role. This preparation work will result in negations when the WBG wants to continue with the project. The negotiations are to formalize the agreed understandings on the use of WBG financing, as discussed during project preparation. After the negotiations, the documents will be sent to the bank management for approval and, in some cases, will be transmitted to the board.71
After the project is adopted, the WBG can still take measures. If the WBG decides in the Procurement plan that a post review is necessary, the bank will monitor the risks, and if necessary, the WBG may be required to revise the prior and/or post review requirements in the procurement plan. Furthermore, if the borrower does not comply with the procurement plan, the WBG may exercise legal remedies set out in the legal agreement, including declaring misprocurement.72 Other measures are also set out in the general conditions of the IDA and IBRD, which the state needs to comply with to obtain a loan from the WBG. In Article VII of the IBRD, general conditions and the rights of cancellation, suspension, and acceleration are covered, but they cover only financial matters and do not give powers to act when a human rights issue is at stake; this is also true for IDA.73
3.3.5. Development Policy Financing
70 BP 4.12 Operational Manual The World bank Group, Investment Project Financing Involuntary Resettlement,
April 2013, 14-16
71 Investment Project Financing Project Preparation Guidance, Word Bank Group 2013
72 Procurement Regulations for IPF Borrowers, Procurement in investment project Financing. Goods, Works,
Non-Consulting and Consulting Service, The World Bank Group July 2016,
In these loans, the borrower tries to create sustainable development through programs and sustainable actions.74 The Development Policy Financing takes a similar path as the Investment Project Financing. In this program, the WBG determines whether the policies have significant poverty and social consequences, especially on poor people and vulnerable groups. If there are shortcomings, the WBG will address this before the implementation. The borrower is yet again responsible for the implantation and shortcomings that can appear in the project.75 Furthermore, the borrower needs to create a monitoring body for the project. Nonetheless, the IEG and QAG will report to the board.76 When the borrower does not comply with the legal agreement, the WBG can suspend of disbursements, cancelling unwithdrawn amounts of the Bank Loan.77
3.4. Due Diligence
The WBG has a couple of human rights in its policies but it is limited and scattered throughout its policies. However, the policies do not cover every customary human right. The WBG has the positive obligation to take measures. In the procurement plan, customary rights should be included through policies like the indigenous people policy. Human rights would be then included in the plan and adjustments would be made if a human right is violated. When the borrower starts to implement the project the WBG should monitor and act when a human right violation occurs. This can be made possible by creating consequences in the legal agreement when a human right violation occurs. However, this is now not the case. If a human right violation occurs the WBG did not fulfill its positive obligation and would violate the human right if it was in the power to act. Although, in case that the WBG made the measure it still can violate the positive obligation if it did not enough to prevent the violation. This will depend from case to case. But in the present regulation the WBG does not fulfill the positive obligation of customary law.78
3.5. Conclusion
Human rights are only a small part of the preparation and are scattered throughout several policies. Nonetheless, the borrower country needs to implement these policies in the
74 Products and services, World Bank Groups,
website:http://www.worldbank.org/en/projects-operations/products-and-services
75 OP 8.60 The World Bank Group, Development Policy Financing Operational policies, July 2014 76 OP 13.60 The World Bank Group Monitoring and Evaluation, June 2007
77OP 8.60 The World Bank Group Development Policy Financing Operational policies, July 2014 78 M. Ssenyonjo 2009, p.23-3, 110-120
