CORE signs letter to Thun Group of Banks on human rights impacts

CORE has signed a joint letter coordinated by international NGO Bank Track calling on the Thun Group of Banks to withdraw a paper which calls into question banks’ responsibilities for human rights impacts linked to finance. The Thun Group of Banks is an informal network of banks that discuss the application of the UN’s “Protect, Respect and Remedy” Framework” and the Guiding Principles to their banking activities.

The paper, published in January, claims that banks should generally not be considered to be causing or contributing to adverse human rights impacts arising from their clients’ operations because the impact is not occurring as part of the bank’s own activities, and that as banks do not generally contribute to human rights impacts through their finance, they are not responsible for remediating those impacts.

This contradicts advice from the UN Office of the High Commission for Human Rights published in November 2013. It has also been strongly criticised by former UN Special Representative for Business and Human Rights, Professor John Ruggie. In his response, Ruggie expresses concerns that the central elements of the UNGPs have been misconstrued and suggests this may hamper progress by individual banks.

The Thun group has said it is seeking to develop a conceptual framework for considering Principle 13 of the UN Guiding Principles on Business and Human Rights (UNGPs) in a corporate and investment banking context. This Principle describes how the corporate responsibility to respect human rights requires that business enterprise avoid causing or contributing to adverse human rights impacts. And they should seek to prevent or mitigate adverse impacts that are linked to their operations, products or services by their business relationships, even if they have not contributed to those impacts.

The paper’s executive summary and conclusion state that, when a bank is directly linked to a human rights impact caused or contributed to by a client, “access to remedy, as considered by the UNGPs, does not apply”. This appears to confuse the right of individuals to seek remedy with the responsibility of business to provide remedy.

31 international NGOs including Oxfam, GREENPEACE and SOMO, signed the letter and have called on the Thun Group to respond by 24 February.