July 17, 2014

Can the emerging economic powerhouses of the so-called BRICS - Brazil, Russia, India, China, and South Africa – underwrite development in a way that doesn’t stamp on the rights of people who are supposed to benefit?

That’s the big question following an agreement struck at the end of the BRICS summit yesterday to establish the New Development Bank with an initial capital of US$ 100 billion. Headquartered in Shanghai with a rotating presidency, first held by India, the new bank’s stated objective is to mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging countries.

The world needs plenty of development capital and infrastructure investment is essential to fulfill the rights to water, sanitation, education, and healthcare – to name a few. But too often we see poor and marginalized communities displaced by infrastructure projects, inadequately compensated for the losses they endure, and pushed further into poverty. Or such projects may cause environmental damage which can have devastating impacts on communities’ access to water and food and people’s health. Communities in BRICS countries have themselves experienced the anguish of development projects gone wrong.

The BRICS governments have an opportunity to avoid the mistakes other development institutions have made by putting in place from the outset environmental and social rules that are the best in the business. With open and transparent processes, the new bank should invest in projects that communities actually want and have participated in the development of and ensure that its investments reach and benefit the most discriminated against and marginalized.

At a minimum, the bank’s rules should prohibit investment in activities that would cause, contribute to, or exacerbate human rights violations, require respect for human rights in all of its activities, and require staff to identify the human rights impacts of bank activities and avoid or mitigate adverse impacts. They should also include policies on indigenous peoples, involuntary resettlement, and labor standards that meet the norms provided for in international law, and prohibit discrimination on all grounds identified by international law.

The bank should build on the practice of the World Bank and other development institutions to create an independent accountability mechanism that accepts complaints and works to resolve them, assesses the bank’s compliance with its policies and international law, determines appropriate remedies for anyone harmed by the bank’s activities, and advises the bank as to how it can improve compliance institution-wide.

To call for such an approach might appear naive in light of the non rights-respecting behavior the governments involved are responsible for, but the BRICS have an opportunity to be global leaders on development by building a bank that advances rights-respecting development. If they do not, the new bank could do more damage than good.