Creating the Asian Infrastructure and Investment Bank: a chance for Human Rights?

by: in Law
blog Creating the Asian Infrastructure and Investment Bank: a chance for Human Rights?

Last week Dutch Prime Minister Mark Rutte went on an economic mission to China, accompanied by a delegation of business people representing Dutch corporations. China’s presence as an economic and political power is increasing steadily. Its economic and financial potential is huge, not only in China itself, but also in other parts of Asia and in Africa. However, its role in multilateral fora is still rather limited. This applies especially to international organisations for development and finance, such as the World Bank and IMF, which are still dominated by Western powers, such as the USA and a number of European states. The position of developing countries and strong emerging economies in the South in the current international economic and financial institutions is rather weak. Therefore it is no big surprise that China has taken the lead to establish a new international bank for financing projects which aim at fostering economic growth and development in the South.

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  ). 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.

  • A.P.M. Coomans

    Prof Fons Coomans holds the UNESCO Chair in Human Rights and Peace at the Department of International and European Law at the Faculty of Law, Maastricht University. He is the Director of the Maastricht Centre for Human Rights, and a member of the Netherlands Network for Human Rights Research.

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