The idea for an Asian Infrastructure and Investment Bank (AIIB) has been launched recently by China and has been welcomed and supported by countries such as India and South Korea. The idea is that this new organisation should become the counterpart of the ‘old’ Western dominated financial institutions which have made little progress in adapting their organisational structure and decision-making procedures to changing realities as a result of processes of economic globalisation and shifts in economic power positions. Recently a number of European states have decided to join this initiative and apply for membership, a decision which has been very much opposed by the US government. This will give these countries an opportunity to have a say in the development of the mandate of the new Bank and its organisational set-up. European countries, such as The Netherlands and the UK, have argued that it is better to support this new plan and get involved than to stay out and compete with a new powerful player when it comes to having access to financial resources for funding projects.

The establishment of the AIIB creates a welcome opportunity to include respect for human rights in the mandate of the new institution for which negotiations will start soon. It is well-known that huge infrastructural projects, such as the construction of a dam, and investments in mining may have negative effects on the enjoyment of human rights of people living in the areas where these are being carried out. One can think of displacements and evictions of indigenous groups, a lack of consultation of local people, poor compensation in case of expropriation of land, environmental effects and poor labour conditions for local workers. The World Bank, as a key player in this field, does not have a human rights mandate. This institution denies that it is bound by human rights law when it carries out its projects in developing countries. This may be correct from a strictly legal point of view.

However it is submitted that member states (including China) are bound by human rights treaties and ILO labour standards also when they act as members of decision-making bodies of international financial institutions, because they are State Parties to these human rights agreements. This line of reasoning may also be applied as justification for including an explicit reference to respect human rights in the new AIIB constitution. What is needed is a ex ante human rights impact assessment when proposals for new infrastructure or investment projects are discussed in the Executive Board of the AIIB. European states should take the initiative to propose a human rights mandate during the negotiations for the establishment of the AIIB. Such an approach by the AIIB would be in line with the notion that states also have human rights obligations beyond national borders as explained in the Maastricht Principles on the Extraterritorial Obligations of States in the Area of Economic, Social and Cultural Rights [2011] (See www.etoconsortium.org  ). A reference to respect human rights in the AIIB’s constitution may be opposed by states that do not have a good human rights record themselves, like China. However, protection and promotion of universal human rights are a legitimate topic for discussion and concern by the international community. This is the more so in an era characterized by economic globalisation.