Banks and human rights due diligence: A critical analysis of the Thun Group's discussion paper on the UN Guiding Principles on Business and Human Rights

Abstract

The Thun Group's discussion paper The Guiding Principles on Business and Human Rights: An Interpretation for Banks lays the foundations for the first ever comprehensive guide on how universal banks should move from corporate social responsibility to human rights due diligence. As the arguments offered by the Thun Group are likely to influence not only public and private financial institutions but also companies belonging to other sectors, this article offers a critical assessment of the document. Notwithstanding several positive features, the Thun Group relies on a faulty subsidiary approach, avoids fundamental issues like access to effective remedy, and downplays the importance of engagement with affected stakeholders.

Keywords:

• banks
• finance
• corporate social responsibility
• business
• human rights

Disclosure statement

No potential conflict of interest was reported by the author.

Acknowledgments

This article would not have been possible without invaluable guidance from Alessandro Costa, Roger McCormick, Antonella Sarro and Andrea Shemberg. I thank the anonymous reviewers for critical feedback. Earlier versions of the article were presented at several conferences organized by the Globalisation and Transnational Human Rights Obligations (GLOTHRO) network. My sincere gratitude goes to all participants, as well as to Andrea Baranes, Nadia Bernaz, Marta Bordignon, Ryan Brightwell, Maria Cristina Caracciolo, Estela Casajuana, Barry Herman, Johan Frijns, Giada Lepore, Ariel Meyerstein, Andreas Missbach and Paul Watchman, who significantly helped improve my thinking on banks and human rights. All errors are my own.

Notes on contributor

Damiano de Felice holds a PhD in International Relations from the London School of Economics and Political Science. He is the Strategic Adviser to the CEO of the Access to Medicine Foundation, the co-director of the Measuring Business and Human Rights project, and a member of the World Economic Forum Global Agenda Council on Human Rights. His recent publications include: ‘The Potential of National Action Plans to Implement Human Rights Norms: An Early Assessment with Respect to the UN Guiding Principles on Business and Human Rights', Journal of Human Rights Practice (2015, co-authored with Andreas Graf); ‘Challenges and Opportunities in the Production of Business and Human Rights Indicators to Measure the Corporate Responsibility to Respect', Human Rights Quarterly (2015).

ORCID

Damiano de Felice http://orcid.org/0000-0002-6243-8492

Notes

1. Human Rights Council, Guiding Principles on Business and Human Rights: Implementing the United Nations ‘Protect, Respect and Remedy' Framework (A/HRC/17/31, 21 March 2011). For a comprehensive account of Ruggie's mandate as SRSG, see John G. Ruggie, Just Business: Multinational Corporations and Human Rights (New York: W. W. Norton & Company, 2013).

2. The governance framework proposed by Ruggie rests on three pillars: (1) the state duty to protect against human rights abuses by third parties, including business; (2) the corporate responsibility to respect human rights; and (3) greater access by victims to effective remedy, both judicial and non-judicial. See Human Rights Council, Protect, Respect and Remedy: A Framework for Business and Human Rights (A/HRC/8/5, 7 April 2008).

3. Human Rights Council, Guiding Principles on Business and Human Rights, para. 13.

4. Ibid., para. 15. See also OHCHR, The Corporate Responsibility to Respect Human Rights: An Interpretive Guide (Geneva: United Nations, 2012), 3.

5. As far as governments are concerned, the major development has been the diffusion of National Action Plans on Business and Human Rights. See Damiano de Felice and Andreas Graf, ‘The Potential of National Action Plans to Implement Human Rights Norms: An Early Assessment with Respect to the UN Guiding Principles on Business and Human Rights’, Journal of Human Rights Practice 7, no. 1 (2015): 40–71.

6. See, for instance, Shift and Institute for Human Rights and Business, Oil and Gas Sector Guide on Implementing the UN Guiding Principles on Business and Human Rights (European Commission, 2012).

7. Global Network Initiative, ‘Principles on Freedom of Expression and Privacy', 2008, http://www.globalnetworkinitiative.org/principles/index.php

8. IPIECA, Human Rights Due Diligence Process: A Practical Guide to Implementation for Oil and Gas Companies, 2012.

9. Rae Lindsay and Antony Crockett, ‘Does Money Mind If We Say It's Evil?', International Financial Law Review 30, no. 6 (2011): 111–13. A new brief published by Clifford Chance in May 2014 confirms that the GPs ‘have acted as a catalyst for financial institutions to introduce or to expand policies and procedures around human rights due diligence although the sector is at an early stage of examining the full implications': Roger Leese, Rae Lindsay, and Steve Nickelsburg, Business and Human Rights: Emerging Issues for Financial Institutions (Clifford Chance, May 2014), 1.

10. Mary Dowell-Jones, ‘Financial Institutions and Human Rights', Human Rights Law Review 13, no. 3 (2013): 428.

11. Motoko Aizawa, ‘Cash, Crisis, Conscience: How Can the Financial Sector Ensure It Respects Human Rights?', Institute for Human Rights and Business, 18 July 2011, http://www.ihrb.org/commentary/guest/cash_crisis_conscience.html. Ruggie himself indicated that ‘more granular work would be required in order for governments, businesses and other stakeholders to turn the GPs into rules and tools for specific industry sectors and operating contexts, different scales of operations, various forms of financial intermediaries, and so on': John G. Ruggie, ‘Progress in Corporate Accountability', IHRB Commentary, 4 February 2013, http://www.ihrb.org/commentary/board/progress-in-corporate-accountability.html

12. BankTrack, Human Rights Responsibilities of Private Sector Banks, 2010, 2. See also Danish Institute for Human Rights, Values Added: The Challenge of Integrating Human Rights into the Financial Sector, 2010, 6. Gaia Ghirardi, head of Group Sustainability at UniCredit, recognises that the position of the financial sector relative to potential human rights abuses ‘deserves special attention': Gaia Ghirardi, ‘Understanding and Managing the Financial Sector's Responsibilities in Terms of Human Rights: The UniCredit Experience', Notizie Di Politeia 106 (2012): 67.

13. Center of Concern, Submission to the Working Group on Business and Human Rights in the Occasion of Working Group's Visit to United States, 29 April 2013, 1. The ‘shadow banking system', which comprises financial institutions that are outside the traditional banking regulatory structure but which engage in banking functions like granting credit, should also be taken into consideration. See The Economist, ‘An Ignominious History: Shadow Banking', 8 May 2014, http://www.economist.com/blogs/schumpeter/2014/05/special-report-shadow-banking

14. For a more general discussion, see David Kinley, An Awkward Intimacy: Why Finance and Human Rights Must Learn to Love Each Other (Forthcoming, 2014).

15. IFC, Sustainability Framework, 2012.

16. On the Equator Principles, see Paul Q. Watchman, Angela Delfino, and Juliette Addison, ‘EP 2: The Revised Equator Principles: Why Hard-Nosed Bankers Are Embracing Soft Law Principles', Law and Financial Markets Review 1 (2007): 85–103; John M. Conley and Cynthia A. Williams, ‘Global Banks as Global Sustainability Regulators? The Equator Principles', Law & Policy 33, no. 4 (2011): 542–75; Donald H. Schepers, ‘The Equator Principles: A Promise in Progress?', Corporate Governance 11, no. 1 (2011): 90–106; Christopher Wright, ‘Global Banks, the Environment, and Human Rights: The Impact of the Equator Principles on Lending Policies and Practices', Global Environmental Politics 12, no. 1 (2012): 56–77.

17. For a comprehensive introduction to the topic, see Sheldon Leader and David Ong, eds, Global Project Finance, Human Rights and Sustainable Development (Cambridge: Cambridge University Press, 2011).

18. Mary Dowell-Jones showed how, despite all the very visible, lengthy human rights controversies attached to Vedanta, this company was able to raise significant amounts of financing and easily circumvent the strictures of the human rights/finance initiatives described above: Dowell-Jones, ‘Financial Institutions and Human Rights', 460.

19. The UN Principles for Responsible Investment (PRI) is another initiative that aims to integrate environmental and social issues into financial activities. The PRI has just started specific work on human rights, through a collaborative engagement in the extractives with a focus on joint ventures (on file with the author).

20. The name of the group comes from the Swiss town where bank representatives met for the two initial workshops.

21. Thun Group, Statement on the ‘Guiding Principles for the Implementation of the United Nations “Protect, Respect and Remedy” Framework on Human Rights', 19 October 2011.

22. The relevance of the document derives not only from the important role played by global banks in the world economy. Banks are general businesses that include asset management units, insurance divisions, etc. As such, guidance for banks automatically provides guidance for institutional investors as well.

23. KOFF, Newsletter (Bern: Swiss Peace Foundation, March 2014), 10.

24. Human Rights Council, Summary of Discussions of the Forum on Business and Human Rights, 15 April 2014, para. 95.

25. Sudeep Chakravarti, ‘A Human Rights Code for Banks', 3 October 2013, http://www.livemint.com/Opinion/nGCMPDRc4WLG2C9UUkAt2J/A-human-rights-code-for-banks.html

26. Thun Group, Statement: ‘The Guiding Principles: An Interpretation for Banks', 2 October 2013.

27. For the sake of readability, references to specific pages of the Thun Group's discussion paper are along the text, between brackets.

28. Human Rights Council, Guiding Principles on Business and Human Rights: Implementing the United Nations ‘Protect, Respect and Remedy' Framework, Commentary to GP 16.

29. The importance of aligning remuneration structures with responsible decision-making was highlighted also by Rathbone Greenbank Investments and Ecumenical Council for Corporate Responsibility, The Banks and Society: Trust Rebuilt?, March 2014, 11.

30. Francis West, ‘Five Ways to Restore Public Trust in Big Business', Politics.co.uk, 9 April 2014, http://www.politics.co.uk/comment-analysis/2014/04/09/comment-five-ways-to-restore-the-public-s-trust-in-big-busin

31. MDG Gap Task Force, The Global Partnership for Development: Making Rhetoric a Reality (New York: United Nations, 2012), 61.

32. Human Rights Council, Guiding Principles on Business and Human Rights: Implementing the United Nations ‘Protect, Respect and Remedy' Framework, GP 16.

33. OHCHR, The Corporate Responsibility to Respect Human Rights, 27.

34. Human Rights Council, Guiding Principles on Business and Human Rights: Implementing the United Nations ‘Protect, Respect and Remedy' Framework, Commentary to GP 17.

35. For a useful primer on how banks could measure respect for human rights by their corporate clients, see Damiano de Felice, ‘Challenges and Opportunities in the Production of Business and Human Rights Indicators to Measure the Corporate Responsibility to Respect’, Human Rights Quarterly 37, no. 2 (2015): forthcoming.

36. Danish Institute for Human Rights, Values Added: The Challenge of Integrating Human Rights into the Financial Sector, 5. The Institute for Human Rights and Business also argues that different types of assets ‘will have different human rights impacts and opportunities associated with them. Developing tools to better understand the human rights impacts of types of assets, whether these are property, commodities or other resources, will help investors to be more precise in their analysis and engagement': Institute for Human Rights and Business, Investing the Rights Way: A Guide for Investors on Business and Human Rights, 2013, 57, http://www.ihrb.org/publications/reports/investing-the-rights-way.html

37. Human Rights Council, Guiding Principles on Business and Human Rights: Implementing the United Nations ‘Protect, Respect and Remedy' Framework, GP 21.

38. Collevecchio Declaration: The Role and Responsibility of Financial Institutions, 2003, http://www.evb.ch/es/p25001979.html

39. Swedish National Contact Point, Statement by the Swedish National Contact Point (NCP) for the OECD Guidelines for Multinational Enterprises – with the Full Support of Norway's NCP – in Connection with a Complaint from the Argentine Environmental Organisation CEDHA against Nordea, 1 January 2008, 2, http://oecdwatch.org/cases/Case_123

40. Andreas Missbach, ‘Without Map or Compass. Credit Suisse, UBS and Human Rights' (Berne Declaration, 2010), 16.

41. Further research confirms that financial institutions (FI) have a poor understanding of the core concepts of the GPs and the OECD Guidelines. The findings from a recent report by Sustainable Finance Advisory ‘indicate that some of the concerns expressed by FIs appear to, in part, reflect a misunderstanding of some of the main concepts from the OECD Guidelines and their implications (i.e. linkage and leverage). Thus, several panellists indicated that it will be very important to effectively communicate the expectations and definitions of these main concepts': OECD, Summary Report (OECD Global Forum on Responsible Business Conduct, 27 June 2013), 15.

42. Human Rights Council, Guiding Principles on Business and Human Rights: Implementing the United Nations ‘Protect, Respect and Remedy' Framework, GP 24.

43. OHCHR, The Corporate Responsibility to Respect Human Rights, 82.

44. Human Rights Council, Guiding Principles on Business and Human Rights: Implementing the United Nations ‘Protect, Respect and Remedy' Framework, Commentary to GP 19.

45. There are numerous examples of banks terminating their business relationships with abusive clients. RBS (and a few other European banks) stopped underwriting bonds of the Belarus government: ‘RBS Agrees to Cease Belarus Work', BBC News, 29 August 2011, http://www.bbc.co.uk/news/business-14706646. Santander suspended its funding for Brazil's hugely controversial Santo Antonio dam, citing environmental and social concerns: Survival International, ‘Santander Bank Reports Suspension of Funding for Controversial Brazilian Dam', 5 May 2011, http://www.survivalinternational.org/news/7255. The only exception to the schema outlined in the article is when the business relationship is deemed ‘crucial' to the company. However, the GPs define a crucial business relationship as one that ‘provides a product or service that is essential to the enterprise's business, and for which no reasonable alternative source exists': Human Rights Council, Guiding Principles on Business and Human Rights: Implementing the United Nations ‘Protect, Respect and Remedy' Framework, Commentary to GP19. It is difficult to imagine any financial activity which meets this requirement. The exception is therefore not relevant for the banking sector.

46. Berne Declaration, ‘“Groupe de Thoune”: Les Banques Reconnaissent Enfin L'importance Du Respect Des Droits Humains Dans Leurs Activités', 2 October 2013, http://www.evb.ch/fr/p25021647.html

47. BankTrack, BankTrack on the Thun Group Paper on Banks and Human Rights, December 2013, 5.

48. UNEP Finance Initiative, ‘CEO Briefing', June 2008, 4.

49. Dowell-Jones, ‘Financial Institutions and Human Rights', 423. A rare exception can be found in an interview with Mark Harding, former General Counsel of Barclays, who affirmed: ‘We focused on three areas of impact: our role as an employer, as a purchaser of goods and services, and as a provider of financial services to clients. We found that many of our policies and practices already took account of human rights issues without explicitly referencing human rights. We had sound policies and requirements covering aspects such as discrimination, diversity, bullying and harassment, health and safety, and a range of other human rights-relevant issues': Mark Harding, ‘Banking on Human Rights', The Business and Human Rights Review 1 (2012): 4. A recent report by KPMG is also laudable as it highlights three areas that hold the highest risk with regard to human rights: consumers' activities, employee management and supply chain management: KPMG, Human Rights in the Banking Sector, 2013, 14.

50. See also the way in which the document is introduced on the website of Credit Suisse: ‘[a]s the discussion paper explains, the majority of human rights impacts of banks result from the activities of their clients'. Credit Suisse, ‘Banks Helping to Respect Human Rights: Commitment', 2 October 2013, https://www.credit-suisse.com/ch/en/about-us/corporate-responsibility/news/commitment.article.html/article/pwp/news-and-expertise/2013/09/en/bank-helping-to-respect-human-rights.html. This view is surprising because in other contexts banks have recognised their direct impacts on employees and customers. Credit Suisse itself, in the same webpage of the previous statement, argues: ‘Credit Suisse's most direct link to human rights issues is in its working relationship with its employees and where we can exercise the greatest influence over such issues'. Gaia Ghirardi, head of Group Sustainability at UniCredit, recognises that ‘[o]f course banks are in a position to directly abuse the human rights of their employees and customers': Ghirardi, ‘Understanding and Managing the Financial Sector's Responsibilities in Terms of Human Rights’, 67.

51. OHCHR, The Corporate Responsibility to Respect Human Rights, 37.

52. Tom Sykes, ‘Did Bank of America Merrill Lynch Intern Moritz Erhardt Die of Stress?', The Daily Beast, 22 November 2013, http://www.thedailybeast.com/articles/2013/11/22/did-bank-of-american-merrill-lynch-intern-moritz-erhardt-die-of-stress.html; Shiv Malik, ‘Moritz Erhardt Intern Death Spurs Bank of America Merrill Lynch Review', The Guardian, 23 August 2013, sec. Business, http://www.theguardian.com/business/2013/aug/23/intern-death-bank-of-america-merrill-lynch

53. Julia Kollewe, ‘Banks' Macho Culture “Holds Women Back”,’ The Guardian, 12 March 2012, http://www.guardian.co.uk/business/2012/mar/12/women-management-ftse-100-firms. See also Elizabeth Rigby and George Parker, ‘City “Needs Women” to Fight Macho Culture', Financial Times, 5 September 2011.

54. Carter et al. v. Wells Fargo Advisors LLC et al., US District Court, District of Columbia, No. 09-01752.

55. Noreena Hertz, Women and Banks: Are Female Customers Facing Discrimination? (Institute for Public Policy Research, 10 November 2011).

56. Elizabeth Rigby, ‘Clegg Orders Review into How Banks Treat Women', Financial Times, 9 November 2011.

57. Charlie Savage, ‘Wells Fargo to Settle Mortgage Bias Charges', The New York Times, 12 July 2012, http://www.nytimes.com/2012/07/13/business/wells-fargo-to-settle-mortgage-discrimination-charges.html

58. Gerald A. Epstein, Financialization and the World Economy (Cheltenham, UK: Edward Elgar Publishing, 2005); Thomas I. Palley, Financialization: What It Is and Why It Matters (New York: The Levy Economics Institute, 2007).

59. Mary Dowell-Jones and David Kinley, ‘Minding the Gap: Global Finance and Human Rights', Ethics & International Affairs 25, no. 2 (2011): 183–210; Mary Dowell-Jones, ‘International Finance and Human Rights: Scope for a Mutually Beneficial Relationship', Global Policy 3, no. 4 (2012): 467–70.

60. ILO, Global Employment Trends 2011: The Challenge of a Jobs Recovery (Geneva: ILO, 2011), ix; World Bank, Global Monitoring Report 2010: The MDGs after the Crisis (Washington, DC: World Bank, 2010), 6.

61. John Richardson, Professor at the American University, founded the Initiative for Human Rights in Business to inform investors of the human rights risks associated with commodities speculation, to identify the investors and institutions involved in this speculative trading, and to address the failure of states to prevent these trading abuses and the resulting harm to populations in need: John Richardson, ‘Initiative for Human Rights in Business', 2013, http://ihrib.org/site/jupgrade/blog/

62. See World Development Movement, The Great Hunger Lottery – How Banking Speculation Causes Food Crises, July 2010, http://www.wdm.org.uk/food-speculation/great-hunger-lottery; Friends of the Earth Europe, ‘Farming Money: How European Banks and Private Finance Profit from Food Speculation and Land Grabs', January 2012, http://www.foeeurope.org/farming-money-Jan2012. Markus Henn collected more than 100 articles and reports demonstrating the adverse consequences of commodity speculation: Markus Henn, Evidence on the Negative Impact of Commodity Speculation by Academics, Analysts and Public Institutions (WEED, 14 June 2012). In January 2014 the European Parliament and the EU Presidency agreed on new regulations that would cap trading of some commodity derivatives (linked to wheat, corn, soybean and sugar), ban unregulated trading and establish tighter rules for high-frequency trading: Mark Tran, ‘EU Curb on Food Speculation Gets Qualified Welcome from Activists', The Guardian, 15 January 2014, http://www.theguardian.com/global-development/2014/jan/15/eu-curb-food-speculation-activists

63. Olivier De Schutter, Food Commodities Speculation and Food Price Crises. Regulation to Reduce the Risks of Price Volatility, Briefing Note by the Special Rapporteur on the Right to Food, (September 2010), 1.

64. The absence of the topic of food speculation is also surprising given that in February 2013 Barclays stopped speculative trading of agriculture commodities as part of an effort to scale back businesses that risk its reputation: Maria Kolesnikova and Isis Almeida, ‘Barclays Stops Speculative Agricultural Commodity Trading', Bloomberg, 12 February 2013, http://www.bloomberg.com/news/2013-02-12/barclays-stops-speculative-agricultural-commodity-trading-2-.html

65. Mary Dowell-Jones and David Kinley, ‘The Monster Under the Bed: Financial Services and the Ruggie Framework', in The Un Guiding Principles on Business and Human Rights: Foundations and Implementation, ed. Radu Mares (Leiden, the Netherlands: Martinus Nijhoff Publishers, 2011), 206.

66. Ibid., 207. Problems of collective action can also arise in other circumstances. According to Roger Leese, Rae Lindsay and Steve Nickelsburg, implementation of the GPs ‘is likely to be particularly challenging and complex where multiple parties are involved, such as in syndications': Leese, Lindsay, and Nickelsburg, Business and Human Rights, 2.

67. Mary Dowell-Jones and David Kinley, The UN Framework on Business and Human Rights: The Importance of Financial Institutions (Submission to the New UN Working Group on Human Rights and Transnational Corporations and Other Business Enterprises, 2011), 3.

68. Institute for Human Rights and Business, Investing the Rights Way, 58. Rae Lindsay agrees that there is ‘greater familiarity with these concepts around project finance…But trying to apply this across sectors, businesses, products and geographies is not necessarily straightforward and requires a lot more thought': Leese, Lindsay, and Nickelsburg, Business and Human Rights, 2.

69. Rathbone Greenbank Investments and Ecumenical Council for Corporate Responsibility, The Banks and Society, 32.

70. Barry Herman, Regulating Financial Sectors for Development and Social Justice (New York: Social Justice in Global Development and the New School, 24 April 2013), 4; SOMO, Taking Lobbying Public: The Transparency of Dutch Banks' Lobbying Activities, December 2013.

71. Herman, Regulating Financial Sectors for Development and Social Justice.

72. Global Witness, Rubber Barons: How Vietnamese Companies and International Financiers Are Driving a Land Grabbing Crisis in Cambodia and Laos, 2013.

73. Actionaid, Time to Clean up: How Barclays Promotes the Use of Tax Havens in Africa, November 2013.

74. Global Witness, International Thief Thief: How British Banks Are Complicity in Nigerian Corruption, 2010.

75. Christian Leitz, ‘Human Rights and the Financial Sector', The Business and Human Rights Review 3 (2013): 6.

76. Taking the example of UBS, the Retail & Corporate branch is responsible for about 23% of total net interest and trading income (CHF 2,485 million of total CHF 10,915 million). UBS also affirmed that Retail & Corporate ‘constitutes a central building block of UBS Switzerland's pre-eminent universal bank model', and announced that it ‘generates stable profits which contribute substantially to the overall financial performance of the Group'. As regards derivatives, it is important to note that a significant part of this business is not recognised on the balance sheet. Notwithstanding this limitation, UBS reported that, within the Investment Bank, Investor Client Services net interest and trading income increased by CHF 981 million, primarily due to higher derivatives revenues: UBS, Our Performance in 2013, Annual Report 2013 (Basel and Zurich: UBS, 14 March 2014), 9, 39, 78.

77. The Thun Group focuses on GPs from 16 to 21. The third pillar includes the GPs from 25 to 31.

78. Human Rights Council, Guiding Principles on Business and Human Rights: Implementing the United Nations ‘Protect, Respect and Remedy' Framework, GP 22.

79. Ibid., GP 29.

80. Ibid., para. 6.

81. Ibid., Commentary to GP 17.

82. See, for example, the controversy over the CAO report that strongly criticised the IFC for its $30 million loan to a Honduran palm oil project managed by Corporación Dinant: Human Rights Watch, ‘World Bank Group: Inadequate Response to Killings, Land Grabs', 10 January 2014, http://www.hrw.org/news/2014/01/10/world-bank-group-inadequate-response-killings-land-grabs; Bretton Woods Project, ‘IFC Fails to Act on Human Rights Abuses in Honduras', 23 January 2014, http://www.brettonwoodsproject.org/2014/01/ifc-fails-act-human-rights-abuses-honduras/; Joe Athialy, ‘The Weakest Link in Development Lending', Business Standard India, 17 April 2014. More, in general, on accountability mechanisms of development banks, see Benjamin M. Saper, ‘International Finance Corporation's Compliance Advisor/Ombudsman (CAO): An Examination of Accountability and Effectiveness from a Global Administrative Law Perspective', The New York University Journal of International Law and Politics 44 (2012 2011): 1279; Suresh Nanwani, ‘Directions in Reshaping Accountability Mechanisms in Multilateral Development Banks and Other Organizations', Global Policy, December 2013.

83. Human Rights Council, Guiding Principles on Business and Human Rights: Implementing the United Nations ‘Protect, Respect and Remedy' Framework, GP 30.

84. BankTrack, ‘New Equator Principles to Have Deeply Underwhelming Impact on People and Planet', 4 June 2013, http://www.banktrack.org/show/news/new_equator_principles_to_have_deeply_underwhelming_impact_on_people_and_planet

85. Ariel Meyerstein, ‘Are Big Banks Short-Selling Their Leverage over Human Rights?', The Guardian, 31 October 2013, http://www.theguardian.com/sustainable-business/banks-short-selling-leverage-human-rights. See also the argument by Leitz, ‘Human Rights and the Financial Sector', 7.

86. Human Rights Council, Guiding Principles on Business and Human Rights: Implementing the United Nations ‘Protect, Respect and Remedy' Framework, Commentary to GP 29.

87. Michael K. Addo, ‘The Reality of the United Nations Guiding Principles on Business and Human Rights', Human Rights Law Review 14, no. 1 (1 March 2014): 136. See also Susan Ariel Aaronson and Ian Higham, ‘“Re-Righting Business”: John Ruggie and the Struggle to Develop International Human Rights Standards for Transnational Firms', Human Rights Quarterly 35, no. 2 (2013): 333–64.

88. Professor Christine Kaufmann supported the group with expert input from the University of Zurich Competence Centre for Human Rights throughout the process. According to Bruno Bischoff, Sustainability Affairs at Credit Suisse, ‘the role as independent expert took essentially three different shapes during the process: Input provider, sounding board and facilitator': Credit Suisse, ‘Banks Helping to Respect Human Rights'.

89. Berne Declaration, ‘Groupe de Thoune'.

90. BankTrack, BankTrack on the Thun Group Paper on Banks and Human Rights, 2.

91. OHCHR, The Corporate Responsibility to Respect Human Rights, 62.

92. Ibid., 29.

93. Human Rights Council, Guiding Principles on Business and Human Rights: Implementing the United Nations ‘Protect, Respect and Remedy' Framework, GP 18.

94. OHCHR, The Corporate Responsibility to Respect Human Rights, 84.

95. Human Rights Council, Guiding Principles on Business and Human Rights: Implementing the United Nations ‘Protect, Respect and Remedy' Framework, GP 20.

96. OHCHR, The Corporate Responsibility to Respect Human Rights, 55.

97. Institute for Human Rights and Business, ‘Top Ten Business and Human Rights Issues 2014', 10 December 2013, http://www.ihrb.org/top10/business_human_rights_issues/2014.html. An item of the 2014 list is ‘Developing tools and approaches for the financial sector to understand and address human rights risks'. In 2013, the list included ‘Advancing uptake of the UN Guiding Principles in key enabling sectors including finance, ICT and infrastructure'.

98. See, for example, Global Witness, Undue Diligence: How Banks Do Business with Corrupt Regimes, 2009; Facing Finance, Dirty Profits II, December 2013; ICAN and IKV Pax Christi, Don't Bank on the Bomb, 2013; Oxfam Australia, Banking on Shaky Ground: Australia's Big Four Banks and Land Grabs, 2014; Horacio Verbitsky and Juan Pablo Bohoslavsky, Cuentas Pendientes: Los Cómplices Económicos de La Dictadura (Siglo Veintiuno Editores, 2013). Some organisations, like Profundo, have specialised in providing in-depth research on which banks are involved with the financing of companies who cause harm to humans and/or the environment and what they do to avoid involvement.

99. ‘Fair Bank Guide', 2013, http://www.eerlijkebankwijzer.nl/english/; BankTrack, Banking with Principles? Benchmarking Banks against the UN Guiding Principles on Business and Human Rights, 2014.

100. Berne Declaration and Greenpeace, ‘Public Eye Awards', http://publiceye.ch/ (accessed 7 May 2014). For instance, Goldman Sachs won the Jury Award in 2013. Barclays won it in 2012.

101. See, for instance, Alessandro Costa, ed., Banks and Human Rights: Pathways to Compliance (Rome: Lulu, 2013); Rolf H. Weber, ‘Human Rights Due Diligence as New Policy in Banks' (Hong Kong University, Asian Institute of International Financial Law, 14 December 2013), http://www.law.hku.hk/aiifl/events/documents/RolfWeberppt.pdf; Juan Pablo Bohoslavsky and Jernej Letnar Cernic, eds, Making Sovereign Financing and Human Rights Work (Oxford: Hart Publishing, 2014).

102. Anita Ramasastry, ‘Secrets and Lies? Swiss Banks and International Human Rights', Vanderbilt Journal of Transnational Law 31 (1998): 325–456; Sabine Michalowski, ‘No Complicity Liability for Funding Gross Human Rights Violations', Berkeley Journal of International Law 30 (2012): 451–521; Juan Pablo Bohoslavsky and Veerle Opgenhaffen, ‘Past and Present of Corporate Complicity: Financing the Argentinean Dictatorship', The Harvard Human Rights Journal 23 (2009): 157–211; Juan Pablo Bohoslavsky and Mariana Rulli, ‘Corporate Complicity and Finance as a “Killing Agent”: The Relevance of the Chilean Case', Journal of International Criminal Justice 8, no. 3 (2010): 829–50. Recent cases in Argentina and at the Special Court for Sierra Leone seem to follow these proposals: Ibañez Manuel Leandro y otros casos/Diligencia Preliminar Contra Instituciones Financieras No Determinadas, No. 95.019/2009, Buenos Aires; Prosecutor v. Taylor, Case No.SCSL-03-01-A, Judgment (Spec. Ct. for Sierra Leone 26 September 2013), para. 392.

103. OECD, ‘Global Forum on Responsible Business Conduct', 2014, http://mneguidelines.oecd.org/globalforumonresponsiblebusinessconduct/

104. UN Working Group on Business and Human Rights, ‘Statement at the End of Visit to the United States UN Working Group on Business and Human Rights', 1 May 2013, http://www.ohchr.org/EN/NewsEvents/Pages/DisplayNews.aspx?NewsID=13284&LangID=E

105. Sustainable Finance Advisory, Environmental and Social Risk Due Diligence in the Financial Sector: Current Approaches and Practices (Brussels: OECD Working Party on Responsible Business Conduct, May 2013), 76.

106. Ethan B. Kapstein and René Kim, The Social and Economic Impact of Standard Chartered in Ghana (Standard Chartered, 2011); Ethan B. Kapstein and René Kim, The Social and Economic Impact of Standard Chartered in Indonesia (Standard Chartered, 2011).

107. Enodo Rights, Human Rights Due Diligence for Banks: Implementing the Thun Group Recommendations, 2014.

108. Human Rights Council, Guiding Principles on Business and Human Rights: Implementing the United Nations ‘Protect, Respect and Remedy' Framework, GP 13.

109. Ibid., GP 22.

110. The Dutch National Contact Point, the Office for the High Commissioner on Human Rights and the UN Working Group on Business and Human Rights have expressed their views on some of these ‘definitional' issues: Netherlands National Contact Point, Final Statement on the Specific Instance Notified by Lok Shakti Abhiyan, KTNC Watch, Fair Green and Global Alliance and Forum for Environment and Development Concerning an Alleged Breach of the OECD Guidelines for Multinational Enterprises by the Dutch Pension Fund ABP and Its Pension Administrator APG, 18 September 2013; OHCHR, Request from the Chair of the OECD Working Party on Responsible Business Conduct, 27 November 2013; UN Working Group on Business and Human Rights, Request for Guidance on Specific Aspects the Guiding Principles and Their Meaning in the Context of Financial Transactions and Institutions, 3 December 2013. The UN Working Group clarified that universal banks are considered to ‘contribute to' human rights abuses when the governments and companies with which they have business relationships directly produce adverse human rights impacts. Instead, a bank is considered to be ‘directly linked' to human rights abuses when it supports a company producing adverse human rights impacts further down its supply chain (such as in the example of a food and beverage company that buys products from farms using child labour). UNEP FI and Foley Hoag are currently working on developing a report on ‘banking and human rights' with the aim of bringing more clarity around situations where banks, through their lending or investment activities, can be judged to cause, contribute to, or be linked through their products and services to negative human right impacts. The OECD Working Party on Responsible Business Conduct is also taking into consideration the opportunity to refer this issue to a multi-stakeholder Advisory Group.

111. Center of Concern, Submission to the Working Group on Business and Human Rights in the Occasion of Working Group's Visit to United States, 1.

112. BankTrack, BankTrack on the Thun Group Paper on Banks and Human Rights, 2.

113. Lindsay and Crockett, ‘Does Money Mind If We Say It's Evil?'

114. For an example that seems to limit the validity of ‘client confidentiality' arguments, see Rupert Jones, ‘Triodos Bank: Where Transparency Is the Best Policy', The Guardian, 3 October 2009, http://www.theguardian.com/money/2009/oct/03/triodos-bank-transparency

115. OHCHR, The Corporate Responsibility to Respect Human Rights, 79.

116. BankTrack, BankTrack on the Thun Group Paper on Banks and Human Rights, 6.