Banks and Human Rights


Mark Wielga, Director, Nomogaia[1]
John Richardson, Adjunct Professorial Lecturer
American University School of International Service


Banking is essential to business. As a source of capital and operating funds, guarantees and assurances, banks share in business risks and rewards and often make crucial decisions about the direction and management of business enterprises. They influence business decisions and business behavior. Banks have a dual role: they are businesses themselves and they empower the businesses that use their credit. Because of their critical position in the commercial world, banks have a special, and particularly important, role in business and human rights. However, there is sharp disagreement on the nature and contours of that role. In fact, the responsibilities of banks under the UN Guiding Principles (UNGPs)[2] is currently being debated. Meanwhile, banks are, and have long been, subject to intense criticism for funding corporate actions and projects that are claimed to violate human rights. In those cases, the protests are against both the borrowing company and its banks, with the banks considered responsible for human rights abuses committed by the companies they fund.

This note is intended to provide teachers with an overview of the place banks have in the business and human rights space. It is intended to cover the private and public financial institutions whose function is to provide credit to businesses. This Teaching Note does not address the important role investors play holding companies accountable for their human rights impacts. Those investments come in a variety of forms, some of which are similar to the banking transactions discussed below. While these two topics overlap, they are distinct. Investing and Human Rights will be treated in a separate Teaching Note.

Banks, Credit Agencies and Financial Instruments

Different kinds of banks have different relationships to human rights. Commercial banks are for-profit businesses. They include some of the largest and most important corporations in the world. Many are transnational corporations with a home office and operating subsidiaries in multiple countries and are publicly traded on stock markets. Examples include JP Morgan Chase (USA), The Industrial & Commercial Bank of China, BNP Paribas (France), and UBS (Switzerland).

Development banks were created to provide credit to governments and businesses in low income countries. They often give low-interest loans, zero to low-interest credits, and grants to developing countries. Development Banks owned or controlled by multiple countries are called Multilateral Development Banks. The International Bank for Reconstruction and Development (the World Bank, one entity in the World Bank Group), the European Investment Bank, the Asian Development Bank, the Inter-American Development Bank, and the New Development Bank (China) are some of the largest of development banks. In addition to the multilateral institutions, there are development banks supported by a single country, such as the Dutch development bank (FMO) and the U.S. Overseas Private Investment Corporation (OPIC). Many Development Banks also lend to private business with the goal of promoting development. The largest such bank lending only to private businesses is the multilateral International Finance Corporation (the IFC, an entity in the World Bank Group).

Export Credit Agencies are government-created, and, often, government-owned, institutions that lend money to support national companies’ export and investment. Examples include the U.S. Import/Export Bank, Japan Bank for International Cooperation, Germany’s KfW and Export Development Canada. Export credit agencies are often lenders of last resort supplying credit to companies based in the home country to pursue business overseas.

There are a variety of ways in which a bank can fund or support a company or a company’s business activitites. Important financial products provided by banks include:

  • A bank can supply debt financing as a loan to a company to be repaid by that company. This is the typical corporate loan. The debt may be secured by the company’s assets or be based only on the company’s general credit.
  • In project finance, a bank can lend to fund a company’s specific project and be repaid solely from the proceeds of that activity, with no, or limited, recourse to the company itself. For example, the bank can lend to build an oil pipeline and the loan is made to an entity created to run the pipeline, with the proceeds of the pipeline the only source of funds to repay the loan. In project finance the bank takes the risk of the project’s failure and so is usually closely engaged with the project’s operation.
  • A bank can also supply equity, becoming a co-investor and co-owner in a corporation.
  • Mezzanine lending is a sort of debt-equity hybrid that includes the possibility of converting loans to equity.
  • Banks can provide guarantees to a company’s debt to other parties or otherwise provide enhancements to a company’s credit.
  • Many commercial and development banks sell financial products covering political and market risks. These are forms of business insurance.

Each kind of financing puts the bank and client corporation in different relations of power, oversight and influence. These relationships are important when considering a bank’s human rights responsibilities.

Banks and the UN Guiding Principles

The UN Guiding Principles on Business and Human Rights (UNGPs) (see Introducing the UN Guiding Principles on Business and Human Rights) is the leading standard on businesses’ human rights responsibilities. The OECD Guidelines for Multinational Enterprises,[3] which applies to most large, international banks, also formally establishes the corporate responsibility to respect human rights, a key pillar of the UNGPs.

Banks raise two fundamental issues under the UNGPs. The first issue is one of status. Development banks and export credit agencies are hybrid entities operating in part as commercial businesses and in part as government agents. The UNGPs distinguish between the duties of governments (the “Duty to Protect” Principles 1—10, or Pillar I) and the responsibilities of businesses (the “Responsibility to Respect” Principles 11-24, or Pillar II). The hybrid financial institutions have both sets of responsibilities, one as governments and the other as businesses. Guiding Principle 4 goes so far as to call out these entities and specifically provides that “businesses enterprises that are owned or controlled by the State or that receive substantial support and services from State agencies, such as export credit agencies and official investment insurance or guarantee agencies” are subject to additional steps to protect against human rights abuses. (emphasis added)

In addition, all commercial banks have two distinct roles. The first is as a business enterprise in its own right, with employees, shareholders, governance, etc. As such, banks have the responsibilities mandated by the UNGPs for all businesses. For example, there can be discrimination issues with consumer lending or bank employee hiring, and occasionally other human rights issues.

The second role of banks is as financier as they supply credit to other businesses. As such, banks empower businesses to act. They can decide which business to fund and often have some say in the way that the credit can be used and even how the business should be run. This role depends on the kind of credit provided. Some forms of financing tie banks so closely to their borrowers that the banks can be considered responsible the for their borrowers’ human rights violations. From a human rights perspective, this second role is, usually, by far the most important.

The UNGPs set up three categories of potential connection between businesses and adverse human rights impacts: 1) cause, 2) contribute or 3) directly linked by its operations, products or services.[4] If the relationship is one of “cause” or “contribute,” then there is a broad duty to remediate and mitigate. If the relation is “directly linked” there is a weaker requirement to address the impacts. How does banking fit into this regime? If financing is only “linked” (and has not “caused” or “contributed”) to the human rights impact, then banks’ responsibilities are modest. But if the financing is considered to “contribute” to the human rights infringement, then the bank is directly responsible and must take significant action. These are not mere verbal distinctions, but go to the heart of how banks impact human rights.

Thun Group Debate

There has been a recent high-level dispute over this very issue. In 2017, the Thun Group, an informal association of major transnational commercial banks, published a White Paper[5] stating their position on how the UNGPs should apply to banks. The Thun Group had been a leading voice of the banking sector with respect to business and human rights, and its two previous papers[6] had been considered cutting edge.

The question addressed in the Thun Group’s 2017 White Paper is: Where does bank financing fit in the UNGPs’ “cause, contribute or linked” scheme? The White Paper admits that a bank can cause or contribute to human rights impacts within its own banking operations, for example with respect to its own employees. Otherwise, the White Paper states that UNGP 13a would generally not apply: “Under UNGP 13, a bank would generally not be considered to be causing or contributing to adverse human rights impacts arising from its clients’ operations because the impact is not occurring as part of the bank’s own activities.”[7] As a result, the Thun Group White Paper concludes that “access to remedy, as considered by the UNGPs, does not apply” to banking.

In an unprecedented move, the Thun Group position in its White Paper was definitively rejected by the UN Working Group on Business and Human Rights,[8] the UN Commission on Human Rights[9] and by Prof. John Ruggie (the former Special Representative on the issue of human rights and transnational corporations who drafted the UNGPs),[10] along with many others.[11] These opponents answered that the banks can contribute to adverse human rights impacts by funding corporate activities. This higher level of connection makes the banks responsible to conduct human rights due diligence, which includes, investigation, remediation, mitigation and monitoring for the human rights impacts of their borrowers. (See Human Rights Due Diligence) It also means the banks are subject to the UNGP’s requirement to provide human rightsholders access to remedy for human rights violations. In other words, the proposition that banks can only cause or contribute to human rights abuses to their own employees within their own offices is rejected. The opponents’ position greatly expands bank’s responsibilities under the UNGPs. The Thun Group has indicated that it will reconsider its position on this topic.[12]

While the Thun Group position is still being clarified, the clear and united position of the major business and human rights institutions creates a firm basis for interpretation of the UNGPs with respect to banks: bank financing can contribute to human rights violations. Banks have major human rights responsibilities under the UNGPs.

The actual uptake of the UNGPs by commercial banks is a subject of dispute. While most large transnational banks have made public statements appearing to support the UNGPs, there are many claims that action is lacking. A 2014 study found that self-reported uptake of the main elements of the UNGPs in company policy was low even among the members of the Thun Group.[13] The beginning of a longitudinal survey by BankTrack reported in 2014 and 2016[14] finds wide support in the form of policy statement, but little actual human rights due diligence and virtually no efforts to provide access to remedy. One conclusion of the 2016 study was that: “Several requirements from the UN Guiding Principles are not being met by even ‘front runner’ banks. These are: including meaningful consultation with potentially affected people in due diligence; ensuring reporting on specific human rights impacts is good enough to evaluate the bank’s response; and establishing grievance mechanisms that meet the effectiveness criteria of the Guiding Principles. On these three counts, all banks are failing to meet their responsibilities.”[15] This conclusion is consistent with the positions taken by the Thun Group discussed above. Banks continue to make self-serving statements and human rights advocates continue to criticize them.

Development Banks and Human Rights

“Development” is a concept that inherently intersects and overlaps with “human rights.” Development banks have a special place in the business and human rights field. The World Bank Group and its member the International Finance Corporation frequently present themselves as champions of the poor and underprivileged, while both organizations are consistently criticized by many human rights defenders. Massive infrastructure construction and large business operations funded by the World Bank are seen by some as benefiting low income countries and fundamentally improving people’s lives, and by others as land grabs devastating marginalized people, aiding tyrannical or brutal regimes and increasing inequality. (See Land Rights) The United Nations Special Rapporteur on extreme poverty and human rights, Philip Alston, has called the World Bank “a human rights-free zone. In its operational policies, in particular, it treats human rights more like an infectious disease than universal values and obligations.”[16] In accordance with its charter’s mandate not to interfere with barrower nations’ internal affairs, the World Bank has been reluctant to squarely align its development goal with human rights. The World Bank attempts to operate above politics, yet many human rights address fundamental political issues. The World Bank has been accused throughout its history of making loans to repressive and corrupt regimes that violate human rights.[17] Human Rights Watch reacted to the World Bank’s updated environment and social framework with the statement: “In refusing to acknowledge its rights obligations once again, the World Bank anticipates it will be able to violate human rights without consequence.”[18]

Development banks other than the World Bank, have varying positions on human rights, but generally follow the World Banks’ “lead.” None of the multilateral development banks have clear policies requiring “human rights” compliance, and, at best, they refer to human rights in aspirational terms. The exception is the European Investment Bank, which is required to act in accordance with the Charter of Fundamental Rights of the European Union.[19] All of the major regional development banks have some kind of grievance or complaint system that may include or overlap with human rights issues, such as labor rights or community health.[20]

The World Bank has set standards that have become norms both for other development banks and some commercial banks. The IFC Performance Standards were adopted in 2006 and have become one of the most widespread and influential soft law standards.[21] They are organized under eight topics and lay out required actions and rules of behavior with which IFC borrowers must comply. The Performance Standards include environmental management (for example, an Environment Impact Assessment is required for high risk projects) and recognize labor rights (parts of the International Labor Organization’s labor standards become IFC’s requirements for its borrowers). The IFC also mandates that borrowers planning investments affecting indigenous people’s lands and resources obtain the free, prior, informed consent (FPIC) of those indigenous populations. When the Performance Standards were updated in 2012, there was hope in the business and human rights community that the update would embrace the recently endorsed UNGPs. In 2011, John Ruggie had personally sent a letter to then World Bank President Robert Zoellick lobbying for this result.[22] The 2012 update of the Performance Standards disappointed human rights advocates. The update neither explicitly embraced and encompassed the internationally recognized human rights nor adopted the UNGPs. The Performance Standards do not refer to the UNGPs themselves, but mention the possibility of conducting human rights due diligence in one footnote.[23] The question as to whether, under their own terms, the UNGPs applies to an entity such as the World Bank is not settled.[24] Other development banks, however, are not limiting themselves to the World Banks’ position on human rights. For example, in 2017, FMO, the Dutch development bank, formally adopted a policy embracing the UNGPs and requiring interim human rights due diligence that go beyond the Performance Standards.[25]

Voluntary Initiatives

Some commercial banks also require their borrowers to follow the IFC Performance Standards. A group of such banks (as well as export credit agencies and development banks) have formed an association to support the Equator Principles.[26] The Equator Principles include a pledge to adopt the IFC Performance Standards (as well as the World Bank Group’s Environmental, Health and Safety Guidelines) in higher risk contexts. However, they go beyond the Performance Standards in formally recognizing the banks’ responsibility to respect human rights and recognizing the UNGPs.[27] In addition, the Equator Principles include provisions on transparency, grievance mechanisms, stakeholder engagement, and consideration of alternatives that would produce less greenhouse gases. The Equator Principles started as primarily covering project finance, but it has since expanded to include other potentially high risks forms of lending, such as project related corporate loans and bridge loans. There are now over ninety Equator Principle Association member financial institutions headquartered in 37 countries, covering over 70% of international project finance in emerging markets.

The Thun Group mentioned above, is an informal and changing group of about ten mostly European banks which have tried to be a leading voice in the business and human rights space. They produced position statements in the past, including a 2013 Paper on UNGPs 16-21[28] and their implications for banks. It is not clear what the status or positions of the Thun Group will be after the authoritative rebuttal to their 2017 White Paper.

In accordance with its ambitious National Action Plan on Business and Human Rights,[29] the government of the Netherlands has created a unique process in which it gathers national industry groups into a formal agreement with it to carry out the UNGPs.[30] Signed in 2016, the Dutch Sector Banking Agreement on International Responsible Business Conduct Regarding Human Rights is a formal contract among the Dutch Ministries of Finance and Foreign Affairs, the Dutch Banking Association, unions and human rights NGOs.[31] It has put in a place a number of formal processes and initiatives that are intended to give specific guidance to banks on how to carry out the UNGPs. These include sharing best practices on human rights due diligence, the creation of a publicly assessable data base on human rights information and assessment tool, joint value chain human rights mapping exercises in high risk sectors, and human rights reporting. The first public report on the status of this effort is expected in the second half of 2017. It is possible that the Dutch Banking Section outputs will be a model for banks globally.

Export Credit Agencies

Export Credit Agencies are a large and important component of international finance, and particularly in the risky investments in underdeveloped countries that attract the most attention in the business and human rights field. As mentioned above, they have an unusual position with respect to the UNGPs because, being owned or controlled by nation states, they are subject to Pillar I of the UNGPs and, being engaged in business, they are also subject to Pillars II and III. The leading instrument applying the UNGPs to Export Credit Agencies is the OECD Common Approaches, [32] adopted in 2016. The Common Approaches are intended to promote policy coherence on export credit among the countries that adhere to OECD guidance. The policies include topics such as the environment, climate change and human rights. For example, the Common Approaches require that export credit agencies use the IFC Performance Standards and World Bank Safeguards as benchmarks. With respect to human rights, the Common Approaches point out that human rights due diligence may be needed in high risk cases. The OECD adherent countries are also subject to the National Contact Point (“NCP”) system for disputes. (See Complaints and Criticism below, and OECD National Contact Point Complaints [HYPERLINK].) The Common Approaches are soft law recommendations to governments, and the governments, in turn, are supposed to ensure that their export credit agencies conform to them.

The extent to which the Common Approaches are changing export credit agencies human rights processes and actions is not known. There are no publicly available studies of export credit agencies’ actual compliance with UNGPs. BankTrack includes some Export Credit Agencies in its surveys of banks’ UNGPs uptake, and the results are generally poor. Some Export Credit Agencies are also members of the Equator Principles Association and so report on their lending as part of that group.


As noted above, there is a long-held and persistent view that large projects financed by development banks often violate human rights. These same criticisms apply to commercial banks funding business operations in weak governance contexts. The violations can occur in the land acquisition phase, when competing land users may be squeezed out (see Land Rights); in the construction or operations phases, when there may be environmental impacts on surrounding communities; or even in the choice of partners and backers, which may include corrupt or repressive government officials or violent warlords.

There are many examples of such complaints. (See, for example, the ones provided in the Teaching Resources.) Here are a few iconic complaints:

  • Peruvian Mercury Spill. In 2000, an accidental spill of elemental mercury from a truck leaving the Yanacocha Mine in Peru poisoned hundreds of inhabitants of three towns. The mine was owned by the US based Newmont Mining and a Peruvian partner. The IFC had an equity interest in the company operating the mine and faced fierce protests demanding that it divest. This would normally have been a regulatory and litigation issue for the mining company, but the outrage extended to the IFC as financier as well.
  • Dakota Access Pipeline (USA). In 2016, a planned oil and gas pipeline under the Missouri River provoked massive Native American protests. Large, lengthy demonstrations at the site spread to protests against the banks funding the pipeline. This included high profile protests against Wells Fargo in the US and ING in the Netherlands. Claims included violations of indigenous rights that could not have happened but for the banks support of the project.[33]
  • Agua Zarca Hydro-electric Project (Honduras). A relatively small, run-of-river hydroelectric power generation project turned deadly in 2016, when opposition leader and Goldman Award Winner Berta Caceras was murdered. There were credible claims that the killers had connections to companies involved in the project. After a formal review, two of the lenders, national development banks FMO and FinnFund withdrew financing from the unfinished project.

Complaint and Grievance Mechanisms

A number of complaint mechanisms have been developed to respond to allegations of human rights violations against banks. They vary in effectiveness and it is possible that none may be considered full “access to remedy” as required by the UNGPs.

The World Bank and IFC created the Compliance Advisor Ombudsman (“CAO”) in 2000.[34] The CAO is an independent function within the World Bank Group to address complaints. Complaints are made through a formal process and must necessarily be submitted directly by affected populations (not third-party NGOs). If the complaint is accepted, the CAO’s investigation and findings are made public. The ultimate goal of the CAO is to determine whether the bank followed its own policies. Because these can include the Performance Standards described above, they can specifically address some human rights issues. The results are not clearly effective, with borrowers sometimes ignoring the CAO’s findings as the CAO has no direct enforcement capability.

The major multilateral development banks all have some form of ombudsman or complaint mechanism.[35] Perhaps the most sophisticated bank complaint system belongs to Dutch development bank FMO.[36] It includes, when appropriate, hiring of a panel of international expert investigators who produce a detailed and fully transparent report. A public response is made to it by FMO. The process appears competent and transparent, and the published findings can be critical of the bank.

The OECD has a system for bringing claims (called “Particular Instances”) against banks and companies. This system, coordinated through the OECD before the National Contact Points (“NCPs”) created under the OECD Guidelines for Multinational Enterprises has been gaining momentum.[37] For a more detailed description of the NCP system see OECD National Contact Point Complaints. Export Credit Agencies are explicitly subject to this avenue of complaint. The NCP’s complaint mechanism is directed towards mediated solutions, rather than fact-finding. As a negotiation-oriented function, it does not require action on the part of companies to provide remedies. Currently, it is reported that 11% of these complaints have been directed at financial and insurance activities, making it the third most active sector.[38]

Teaching Approaches

The role of banks is best left to latter parts of a business and human rights course, after the basic concepts are introduced. Finance adds a layer of complexity, so it is important to have already covered the fundamentals. However, the addition of banks as a topic can be rich and rewarding in that it allows a reexamination of the business and government roles in the context of these additional parties. Banks can provide financing with strings attached. Making loans subject to requirements such as the IFC Performance Standards put the banks in position to act essentially as self-interested regulators. When banks take their human rights duties seriously, they can have real practical power over corporations to police and enforce human rights responsibilities. In fact, this is often in a bank’s best interest, reducing its own risk by reducing its borrower’s risks. On the other hand, banks acting badly can empower irresponsible corporate actors and exacerbate human rights violations. In those cases, banks can turn into defenders of, and apologists for, human rights violations. These are all valuable concepts to consider and test with students.

Banking can be the subject of an entire section of a course on business and human rights. Alternatively, it is also effective to use specific course modules on bank-related issues, as described below. For either approach, the topic or modules can be organized around the general question: What does the responsibility to respect human rights mean for a bank? Intertwined in the topic is the persistent issue of how a bank relates to the borrower corporation. Understanding that power relationship necessarily involves the crucial differences in the different kinds of financial products banks provide, each of which affect the leverage a bank has over a borrower. Different kinds of financing also determine the types of remedies that are, or should be, available to victims of human rights violations. If the instructor wants to keep it simple, she can focus on the general credit loan, because it is the easiest to explain. However, the closest connection between the bank and borrower occurs with the project finance loan, and so that form of finance often has the clearest human rights challenges for the banks.

A banks and human rights section of a course could cover all of the topics in this Overview. The section could also be shortened by leaving out the more specific topics of Voluntary Initiatives and Export Credit Agencies.

Here are some bank-related course modules that can stand on their own in a business and human rights course that does not have a section devoted to banking and human rights. (Of course, they could be part of a banking and human rights section as well.):

  • Development banks and human rights. This is a rich theoretical area in which questions of the meaning and import of development and human rights can be examined. It is a topic particularly valuable to policy schools. How the IFC Performance Standards map on to internationally recognized human rights is an important practical question for development banks, and it can be a teaching exercise, a basis for discussion, or a paper topic. Unless sufficient time is available, it is usually best to use only select Performance Standards, as examining them all can make the project overwhelming. Another useful exercise is to allow students to critique the efficacy and completeness of the human rights elements of standards used by the banks.
  • Voluntary initiatives. This module would fit in either as an expansion of a section on banks and human rights or as a banking subsection, which can be added to a section on Voluntary Initiatives or Industry Groups. There is also an ongoing evolution of benchmarked standards and voluntary initiatives: the Equator Principles, the Thun Group and the Dutch Banking Section Initiative, for example, continue to change and evolve. This module may be particularly interesting to business or policy students.
  • Grievances and access to remedy. This module could be part of the banking and human rights section or an addition to a section on “access to remedy.” Considering banks and their borrowers makes remedy more complicated, because there are more parties involved. This can benefit the complainant, because a bank may be sympathetic to complaints that a borrowing corporation may not be. Conversely, it can create confusion for complainants who are presented with grievance mechanisms at the operations, company and financing levels, none of which may be legitimacy or responsive. Relevant mechanisms to consider for discussion include: the NCP, the ombudsman and complaint mechanisms instituted by development banks, corporate grievance mechanisms and hotlines, and others. This module would be relevant and of interest to students in all disciplines.
  • Case studies. The banking sector has some of the best-documented case studies covering complaints of corporate human rights violations. They can be used within a section on banks and human rights, but they are also useful in a general human rights course. The documented case studies can be used for intense analysis, paper topics or as the basis for role-play exercises. There are usually a variety of YouTube videos available which cover live news reports, attack summaries from project opponents and defensive pieces by project supporters. The videos can be used to introduce a claim, provide further background and to give a feel for the situation on the ground. For some of these cases, background documentation is publicly available and can be used to consider risks prospectively. For example, the students can be shown actual examples of Environmental and Social Impact Assessments and asked to consider what risks exposed in them subject the banks involved to human rights obligations. They are relevant for students in all disciplines.

Banking and human rights particularly lends itself to role-play exercises. The reason for this is the banks add another layer and “player” to the rightsholder-company-government interaction. Banks can have enormous, even dispositive, influence over how companies interact with human rights. In some places and for some purposes, banks play a more important regulatory role than the government regulators.

The recent debate between the Thun Group and its detractors on the role of banks and human rights, for example, can be performed as a debate between teams taking each side. This would be done to illuminate the issues involved. It can also show how important and necessary interpretation of the UNGPs is. The text of the UNGPs is often ambiguous or open ended, and students can benefit from applying them in real cases, usually taken from examples of complaints. Debating interpretations in this context can be a starting point to discuss other critical interpretations of the language of business and human rights.

Learning objectives for students may include:

  • Understanding how the UNGPs apply to banks.
  • Using the case of banks to better understand the application of the UNGPs to the various corporate and financial entities involved in a business activity.
  • Understanding the importance of banking in transnational business and why banks are the subject of so much human rights criticism.
  • Appreciating the depth and significance of the division between “development” (including the institutions devoted to it) and “human rights.”
  • Getting insight into the real-world case studies afforded by formally documented human rights complaints against banks.
  • Seeing the variety of grievance mechanisms applied by human rights advocates against banks and weigh their effectiveness and value. Considering how they could be improved and the difficulties involved.
  • Getting insight into the role of government-owned and controlled banks operating internationally and their intersection with human rights.
Key Questions


  • What does it mean for a bank to respect human rights?
  • How does a bank respect human rights in its own operations, separate from the acts of its borrowers?
  • What are a bank’s responsibilities to ensure that its borrowers respect human rights?
  • If a bank makes a loan, do its human rights responsibilities require the bank to monitor how the borrower uses the loan?
  • When do banks’ actions “cause or contribute to” human rights violations?
  • If a bank’s actions, loans or investments cause or contribute to human rights violations, what are the bank’s responsibilities under the UNGPs?
  • When are a bank’s actions “directly linked” to human rights violations that the bank has neither caused nor contributed to? What are a bank’s required actions in such cases?
  • In what circumstances does the borrower have a right to privacy or confidentiality against its bank that conflicts with, or limits, the bank’s responsibility to conduct human rights due diligence?
  • How can a bank be transparent about its human rights due diligence, when publication conflicts with the legitimate confidentiality of its borrower?
  • Are human rights responsibilities different for development banks and commercial banks? How about for state-sponsored or controlled banks?

For law students

  • In cases in which a bank is not liable for the actions of its borrower, why and how do the borrower’s actions create human rights responsibilities for its bank?
  • When can a bank’s human rights policies and procedures create liability for it? For its borrower?
  • Can a bank draft loan agreements that place the responsibility to respect human rights entirely on the borrower?
  • How does a bank’s human rights duties differ when the financing is 1) a general corporate loan, 2) a project finance loan, and 3) an equity investment?
  • When a bank takes an equity interest in a client as a form of financing, is the bank’s responsibility to respect human rights any different from that of a non-bank, equity owner?
  • When a bank takes an equity interest in a single-operation business entity, is the bank’s responsibility to respect human rights any different from that of a general corporate lender to that entity?
  • If a bank provides project finance lending, what are its human rights responsibilities and how do they differ from the responsibilities of the operating company?

For business students

  • What can a bank do to avoid human rights risks created by borrowers?
  • How should a bank monitor the human rights risks of a borrower? Does this differ if it is a general corporate credit as opposed to project finance?
  • What terms can be negotiated in a general corporate loan agreement to reduce the lender’s human rights responsibilities?
  • What terms can be negotiated in a general corporate loan agreement to reduce the borrower’s human rights responsibilities?
  • What can a borrower do to influence its bank’s determination of human rights risks in its underwriting process?
  • How can a borrower use corporate human rights responsibilities to obtain more advantageous deal terms when negotiating a financing with a bank?
  • Can the cost-effectiveness of a bank’s human rights due diligence affect its borrower’s responsibility to perform human rights due diligence?

For policy students

  • What are the ideological and practical conflicts between development banks and the human rights movement?
  • How do these conflicts change when considering the business and human rights field, and especially the UNGPs?
  • What are the human rights due diligence responsibilities of export credit agencies under the UNGPs?
  • How do financial institutions’ duties under the OECD Common Approaches differ from their duties under the UNGPs?
  • How do NCP “specific instances” affect export credit agencies?
  • Are there currently means for aggrieved rightsholders to pursue effective non-judicial grievance mechanisms against banks? What are the advantages and disadvantages of each?
  • What are the attributes (location, industry, rights involved, types of claimants) of human rights claims against banks? What are the trends?
Teaching Resources

[*] This Teaching Note may be cited as:

Mark Wielga and John Richardson, “Teaching Note: Banks and Human Rights,” in Teaching Business and Human Rights Handbook (Teaching Business and Human Rights Forum, 2017),

The authors acknowledge the participants in the Teaching Business and Human Rights Workshop (May 2017) at Columbia University, who contributed ideas for this Note in a collaborative session on teaching finance and human rights topics.

[1] Nomogaia is a non-profit think-tank devoted to the field of business and human rights. Mr. Wielga has also taught business and human rights as an Adjunct Professor at the University of Colorado Law School.

[2] Guiding Principles on Business and Human Rights: Implementing the United Nations ‘Protect, Respect and Remedy’ Framework, Report of the Special Representative of the Secretary-General on the issue of human rights and transnational corporations and other business enterprises, UN doc. A/HRC/17/31 (21 March 2011), available at (“UN Guiding Principles”).

[3] OECD, OECD Guidelines for Multinational Enterprises (OECD Publishing, 2011), available at

[4] UN Guiding Principles, Text of, and Commentary to, Principles 19 and 22.

[5] Thun Group of Banks, Discussion Paper on the Implications of UN Guiding Principles 13 & 17 in a Corporate Investment Banking Context. (“2017 Thun Group Paper”), available at

[6] 2013 Thun Group Discussion Paper, available at; 2011 Statement by the Thun Group of banks on the “Guiding principles for the implementation of the United Nations ‘protect, respect and remedy ‘ framework” on human rights, available at

[7] 2017 Thun Group Paper, p. 6.

[8] Letter from Michael Addo, Chairperson, Working Group on the issue of human rights and transnational corporations and other business enterprises, to the Members of the Thun Group of Banks, dated February 23, 2017, available at

[9] OHCHR response to request from BankTrack for advice regarding the application of the UN Guiding Principles on Business and Human Rights in the context of the banking sector, available at

[10] John Ruggie, John R. Kennedy School of Government, Comments on the Thun Group of Banks Discussion Paper on the Implications of UN Guiding Principles 13 & 17 In a Corporate and Investment Banking Context (February 21, 2017), available at

[11] BankTrack letter to the Thun Group (March 14, 2017), available at; Civil Society Response to Thun Group: Significant Concerns Regarding Thun Group Discussion Paper (February 14, 2017), available at; David Kinley, Artful Dodgers: Banks and their Human Rights Responsibilities, Sydney Law School Research Paper No. 17/17 (March 1, 2017), available at SSRN:

[12] Conference Report of the Thun Group of Banks Annual Meeting on 19 June 2017, University of Zurich, Centre for Human Rights Studies, available at

[13] Kendyl Salcito, Chris Wielga & Burton H. Singer, Corporate human rights commitments and the psychology of business acceptance of human rights duties: a multi-industry analysis, The International Journal of Human Rights (Vol. 19, Issue 6, 2015), available at

[14] Banking with Principles? Benchmarking Banks against the UN Guiding Principles on Business and Human Rights (June 2016), available at; December 2014

[15] BankTrack, Banking with Principles? (2016), p. 3.

[16] Report of the Special Rapporteur on extreme poverty and human rights, A/70/274, United Nations, Seventieth session, Item 73(b) of the provisional agenda (4 August 2015), available at

[17] See, e.g. Galit Sarfaty, Values in Translation: Human Rights and the Culture of the World Bank (Stanford University Press, 2012).

[18] World Bank: Human Rights All But Absent in New Policy, Bank’s Management a Key Obstacle, July 21, 2016, available at

[19] See

[20] See, e.g., Asian Development Bank Accountability Mechanism,; European Investment Bank Complaints Mechanism,; African Development Bank Independent Review Mechanism,; Inter-American Development Bank Independent Consultation and Investigation Mechanism,,1752.html.

[21] IFC Performance Standards on Environmental and Social Sustainability, effective January 1, 2012, available at

[22] Letter from John Ruggie, Special Representative of the Secretary-General for Business and Human Rights to the Hon. Robert B. Zoellick, President, The World Bank Group, March 3, 2011, available at

[23] Footnote 11 on p. 8 of Performance Standard 1. The footnote states in its entirety: “In limited high risk circumstances, it may be appropriate for the client to complement its environmental and social risks and impacts identification process with specific human rights due diligence as relevant to the particular business.”

[24] Meghan Natenson, The World Bank Group’s Human Rights Obligations under the United Nations Guiding Principles on Business and Human Rights, 33 Berkeley J. Int’l Law 489 (2015), available at


[26] For the Equator Principles themselves, see For the Equator Principles website, see In November 2017, the Equator Principle Association announced that it was beginning the process of updating the Equator Principles to a fourth version.

[27] Equator Principles (June 2013), Preamble and footnote 1.

[28] UN Guiding Principles on Business and Human Rights Discussion Paper for Banks on Implications of Principles 16–21, The Thun Group of Banks, October 2013, available at

[29] See

[30] See Dutch Banking Sector Agreement, available at

[31] See

[32] Working Party on Export Credits and Credit Guarantees Recommendation of the Council on Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence (the “Common Approaches”), available at

[33] The pipeline proponents have filed an aggressive $300 million “SLAPP” suit, which includes a racketeering claim, against NGO opponents. BankTrack is a defendant and based on allegedly pressuring banks to withdraw funding from the project. See

[34] See Compliance Advisor Ombudsman (CAO),

[35] See, e.g., Asian Development Bank Accountability Mechanism (; the European Investment Bank Complaints Mechanism (; The Inter-American Development Bank’s Independent Consultation and Investigation Mechanism (MICI) (,1752.html); the African Development Bank’s Independent Review Mechanism (

[36] See FMO’s Independent Complaint Mechanism (

[37] See

[38] See OECD Database of specific instances,