37/54 Report of the Independent Expert on the effects of foreign debt and other related international financial obligations of States on the full enjoyment of all human rights, particularly economic, social and cultural rights
Document Type: Final Report
Date: 2017 Dec
Session: 37th Regular Session (2018 Feb)
Agenda Item: Item3: Promotion and protection of all human rights, civil, political, economic, social and cultural rights, including the right to development
GE.17-22925(E)
Human Rights Council Thirty-seventh session
26 February–23 March 2018
Agenda item 3
Promotion and protection of all human rights, civil,
political, economic, social and cultural rights,
including the right to development
Report of the Independent Expert on the effects of foreign debt and other related international financial obligations of States on the full enjoyment of all human rights, particularly economic, social and cultural rights
Development of guiding principles for assessing the human rights impact of economic reform policies
Note by the Secretariat
The Secretariat has the honour to transmit to the Human Rights Council the report of
the Independent Expert on the effects of foreign debt and other related international
financial obligations of States on the full enjoyment of all human rights, particularly
economic, social and cultural rights, Juan Pablo Bohoslavsky, prepared pursuant to Human
Rights Council resolution 34/3.
In the report, the Independent Expert discusses the development of guiding
principles for assessing the human rights impact of economic reform policies.
United Nations A/HRC/37/54
Report of the Independent Expert on the effects of foreign debt and other related international financial obligations of States on the full enjoyment of all human rights, particularly economic, social and cultural rights
Contents
Page
I. Introduction ................................................................................................................................... 3
II. Evolution in structural adjustment responses to financial crises and
mitigation of adverse social impact .............................................................................................. 5
III. Human rights impacts of austerity ................................................................................................ 6
IV. Why human rights should guide economic reform programmes .................................................. 8
A. Legal imperatives .................................................................................................................. 8
B. Economic imperatives........................................................................................................... 10
V. Using human rights impact assessments to strengthen policy responses to financial crises ......... 11
VI. Building on what exists already .................................................................................................... 12
A. Conceptual foundations and tools in existing approaches .................................................... 12
B. Particular challenges for developing and applying a human rights impact
assessment to potentially impermissible retrogressive measures .......................................... 14
VII. Designing a human rights impact assessment to assess potentially impermissible
retrogressive measures .................................................................................................................. 15
VIII. Conclusions and recommendations ............................................................................................... 18
A. Conclusions and way forward ............................................................................................... 18
B. Recommendations ................................................................................................................. 19
I. Introduction
1. The latest global financial crisis (2007–2008) is widely considered the worst of its
kind since the Great Depression. A decade later it continues to take a toll through fiscal
austerity that dampens recovery and reduces the scope for economic and social
transformation that is needed to generate more inclusive, rights-based societies with access
to decent work, social services and social protection for all.1
2. The contagion of the financial crisis that was ignited in the United States of America
was fuelled by what has been described as “hyperglobalization”, which brought both
benefits and increased vulnerability to societies around the world. It also opened the way
for financialization, a process that enabled financial institutions and markets to increase in
size and influence. The United Nations Conference on Trade and Development (UNCTAD)
concluded that the continuation of that process, along with deepening inequalities,
increased the likelihood of a financial crisis recurring.2
3. Financial crises can be caused by many different factors, including massive bailouts
of private financial institutions, unfair trade agreements, external economic shocks,
irresponsible lending and borrowing, weak resource mobilization and tax collection, tax
evasion and avoidance, corruption and bad economic policies that are not aligned to
inclusive social development and the realization of human rights. In addition, the absence
of a system for resolving debt distress situations in a timely, fair, predictable and human
rights-compliant manner has exacerbated problems. Irrespective of whether financial crises
are caused by external or internal factors or a combination of both, there is need to develop
frameworks for solving them which put respect for human rights at the centre.
4. Since the 1980s, there has been growing consensus that economic crises and many
structural adjustment policy packages that have been implemented to prevent or overcome
them can cause severe adverse human rights impacts. It is then not surprising that economic
reform policies have been increasingly associated with initiatives to mitigate adverse
impacts on the livelihoods of poor communities. Yet, for a number of reasons, these
initiatives have often been far from being considered successful. 3 While it has been
acknowledged that structural adjustment and fiscal consolidation policies can have massive
adverse impacts on persons in situation of vulnerability, most of those policies have not
been designed or implemented in a manner that would promote or safeguard human rights.4
Often the focus has been limited to mitigating the worst social impacts, rather than
implementing reforms that would prevent or dampen future crises. Reforms would also
protect and promote the realization of economic and social rights through investment in
people, thereby making them more sustainable over the medium term.
5. Countercyclical responses that invest in social development are both feasible and
associated with a more equitable and sustainable economic recovery. However many States
and international financial institutions do not seem to have learned those lessons; austerity
has been the predominant response to the recent financial crisis, and fiscal consolidation
policies have largely remained human rights blind, with their principal focus on ensuring
balanced public budgets at all costs.5 International and regional human rights mechanisms
have pointed out that budget cuts in various countries have affected the rights to health,
education, food, housing, work, social security, water, as well as political and civil rights,
such as access to justice, the right to participation, the freedoms of expression, assembly
1 See Isabel Ortiz and others, “The decade of adjustment: a review of austerity trends 2010–2020 in
187 countries”, Extension of Social Security Working Paper No. 53 (Geneva, International Labour
Office (ILO), 2015); also United Nations Conference on Trade and Development (UNCTAD),
Beyond Austerity: Towards A Global New Deal, Trade and Development Report 2017.
2 See UNCTAD, Beyond Austerity.
3 For more details, see A/71/305 and A/HRC/23/37.
4 See, for example, E/2013/82 and A/HRC/17/34.
5 See Juan Pablo Bohoslavsky and Kunibert Raffer (eds.), Sovereign Debt Crises: What Have We
Learned? (Cambridge, United Kingdom, Cambridge University Press, 2017).
and association. They have also resulted in worsening detention and prison conditions. The
right to life and personal integrity has not been spared; economic crises further entrenched
by austerity policies have triggered an increase in suicides in some countries, resulted in the
exclusion of individuals from life-saving public health care and weakened public health-
care systems to such extent that they have been ill-equipped to respond to epidemics.6
6. Women, persons with disabilities, children in single-parent families, migrants and
refugees and other social groups at risk of marginalization have often been
disproportionately affected. For example, the reduction in public services, including
childcare facilities, disproportionately affect women. Women are also often the first to be
laid off when labour legislation is made more “flexible”.7
7. Austerity policies are often justified by an overly simplified or misleading diagnosis
— in particular, blaming excessive public expenditure 8 for fiscal crises without even
considering other relevant factors, such as external shocks, insufficient revenue streams,
financial deregulation, widening inequalities, depressed wages among low- and middle-
income households or other failures owing to globalization.9 Policy decisions are frequently
taken without sufficient consideration of less harmful policy options and reliable analysis of
foreseeable outcomes. The information is often not publicly accessible in any meaningful
way nor subject to meaningful participation by groups in society that may be adversely
affected. Those who typically shoulder a disproportionate part of the cost of adjustments
are the most disadvantaged groups who have marginal voice and political power, which
makes their situation and the impact on their rights invisible. To date, there is no general
framework or methodology for adequately assessing the human right impact of economic
reform policies. That makes it extremely difficult to assess the real and often cumulative
effects of austerity policies on the entire population and, in particular, the most
marginalized segments.
8. In the light of such experiences, in March 2017, the Human Rights Council, in its
resolution 34/3, requested the Independent Expert to develop guiding principles for
assessing the human rights impact of economic reform policies, in consultation with States,
international financial institutions and other relevant stakeholders. To that end, the
Independent Expert solicited input from a wide range of stakeholders to inform the
development of the guiding principles.10 He would like to thank them for their responses.
9. To complement those efforts, the Independent Expert, with the support of the Office
of the United Nations High Commissioner for Human Rights (OHCHR) undertook a
mapping of the social and human rights impact assessment tools used by States,
international organizations and non-State actors. Their responses are available on the
website of the Independent Expert.11 On 9 November 2017, the Independent Expert, in
collaboration with OHCHR, organized an expert workshop in Geneva to inform the present
report, take stock, share experiences and initiate discussion on the scope and content of the
guiding principles. It is expected that developing guiding principles that build on the
extensive groundwork laid by United Nations experts with regard to the impact of the
6 See Center for Economic and Social Rights, “Assessing austerity: monitoring the impact of fiscal
consolidation”, annex A (forthcoming) for a summary of adverse human rights impacts of adjustment
measures identified by human rights bodies, organizations and scholars.
7 See A/HRC/34/57. A more comprehensive discussion of these issues will be included in the
forthcoming report of the Independent Expert to the General Assembly, which will focus on how
austerity impacts human rights from a gender perspective.
8 See Robert Boyer, “The four fallacies of contemporary austerity policies: the lost Keynesian legacy”,
Cambridge Journal of Economics, vol. 36, No. 1 (2012), pp. 283–312.
9 See Suzanne Konzelmann and others, “Assessing austerity”, Cambridge Journal of Economics, vol.
38, No. 4 (2016).
10 Submissions can be found at www.ohchr.org/EN/Issues/Development/IEDebt/Pages/
DebtAndimpactassessments.aspx.
11 The Independent Expert would like to thank Margaret Wachenfeld and Eva Jespersen and his support
team at the Office of the High Commissioner for Human Rights (OHCHR) for their research
assistance.
financial crisis12 and the methodology of human rights impact assessments will contribute
to the design of more sustainable responses to financial crises over the short and long term.
10. Through conducting human rights impact assessments, States will be prompted to
consider and analyse alternatives that would increase the likelihood of realizing human
rights as part of their broader aim of achieving macroeconomic stability and growth.
Human rights obligations suggest social investments that can serve as countercyclical tools
to address economic downturns. They require a departure from policies that focus solely on
achieving short-term macroeconomic targets regardless of the human rights impacts, or
which only try to mitigate the most extreme social impacts. Such specific guidance has not
yet been adequately developed, but the present report demonstrates the existence of relevant
tools, experience and research on which guiding principles for assessing the human rights
impact of economic reform policies could be built.
11. In the present report, the Independent Expert describes the evolution in structural
adjustment responses to financial crises and the mitigation of adverse social impacts up to
the 2007–2008 financial crisis and explains how structural adjustment programmes affect
human rights. He argues that, for both economic and legal reasons, economic reform
programmes must be inclusive and advance human rights. He identifies the main challenges
of developing guiding principles for assessing human rights impacts, including their basis,
scope, content, issues related to timing, and some reflections on how to proceed. He
concludes with some preliminary recommendations for discussion on the content and
format of the guiding principles and proposes the next steps towards developing them.
II. Evolution in structural adjustment responses to financial crises and mitigation of adverse social impact
12. While the 2007–2008 international financial crisis was the worst in decades, the
origin of the debt crises in Latin America in the 1980s, which had spread globally, was also
tied to domestic policy concerns in the United States of America and other developed
countries. Following the Latin American crises, advanced economies sought to tackle their
high levels of inflation and attract investments by increasing interest rates, which escalated
interest payments for borrowers in the developing world. Debtor countries turned to the
International Monetary Fund (IMF) to bridge finance and for advice on how to deal with
the financial impacts of the crises. The structural adjustment policy package that came to be
characterized as the “Washington Consensus” became the dominant remedy. As a condition
for accessing IMF financing, the reduction or reform of public spending and the
liberalization of markets by removing controls and barriers, including on the movement of
capital, were proposed.
13. By the mid-1980s, governments, researchers and an emerging international civil
society community had begun to voice their concerns about the severe, adverse impact of
such policy prescriptions on the ability of countries to promote inclusive growth, develop
human capabilities and strengthen fair opportunities for all members of society. The United
Nations Children’s Fund (UNICEF) gave those concerns an official voice with the 1987
publication, Adjustment with a Human Face: Protecting the Vulnerable and Promoting
Growth.13
14. For its part, the Committee on Economic, Social and Cultural Rights had already
expressed concern, in 1990, about the adverse impact of the debt burden and of the relevant
adjustment measures on the enjoyment of economic, social and cultural rights in many
countries. The Committee recognized that adjustment programmes would often be
12 For a comprehensive summary of concluding observations, general comments and recommendations
of United Nations human rights treaty bodies and mechanisms on the impacts on human rights, see
OHCHR, “Promoting a rights-based approach to economic stabilization, recovery and growth”,
background paper, annex II (April 2013), pp. 16–62.
13 See Giovanni Andrea Cornia and others (eds.), Adjustment with a Human Face: Protecting the
Vulnerable and Promoting Growth (Oxford, Oxford University Press, 1987).
unavoidable and that they would frequently involve a major element of austerity. However,
it noted that, under such circumstances, endeavours to protect the most basic economic,
social and cultural rights became more, rather than less, urgent. 14 Since 1990 also, the
Human Development Reports of the United Nations Development Programme (UNDP)
have been emphasizing the need for people-centred approaches to advance sustainable
human development.
15. Nonetheless, the traditional macroeconomic policy recommendations of market
liberalization and structural adjustment continued to dominate, while a number of initiatives
were developed in parallel to mitigate their adverse social impacts. In the late 1980s, the
international financial institutions launched “social funds” as temporary social assistance or
social protection facilities. That initiative gave rise to the development of the early social
impact assessment tools. However, those mechanisms were often not sufficient and the
turnaround and resumption of inclusive growth often failed to materialize in the short and
medium term.
16. The debt crisis deepened, especially in many low-income countries. A coalition of
civil society organizations and some international agencies called for broad debt relief,
arguing that many governments had been enticed into taking loans that did not deliver as
promoted and the international economy did not evolve as anticipated. In 1996, the Heavily
Indebted Poor Countries Initiative became a reality, whereby governments would have to
prepare Poverty Reduction Strategy Papers, meet a number of economic management and
performance targets, undertake economic and social reforms, and may receive extensive
debt relief when they reached the completion point. Resources thus freed up could be
directed towards poverty-reducing spending.15 Following the United Nations Millennium
Summit in September 2000, Poverty Reduction Strategy Papers became the instruments
required by international financial institutions to support countries’ progress towards
achieving Millennium Development Goal 1 on poverty reduction.
17. With the new millennium, the international development community turned more
decisively to strengthening the agency of the actual beneficiaries beyond social service
delivery systems. Attention shifted to social protection as a means of securing livelihoods
for the elderly and people living with disabilities, facilitating access to nutrition, health and
education for children, as well as generating household incomes during adjustment and
transition periods. Social protection floors and conditional cash transfers became major
trends in social development cooperation in the early 2000s, favoured by a wide range of
governments. Conditional cash transfers have not been without some controversy given
their explicit conditionality in contrast to simple cash transfers as social assistance. The
distinction between the IMF’s support for means-tested cash transfers and strong targeting
of social protection benefits to meet fiscal targets and the Social Protection Floors Initiative
supported by the United Nations and the International Labour Organization, which
emphasizes universal coverage and the human right to social security is apparent.16 Yet, no
consistent and comprehensive rights-based framework for conducting human rights impact
assessments of economic reform programmes has emerged.
III. Human rights impacts of austerity
18. Today, more than two thirds of countries across the world are contracting their
public purses and limiting, rather than expanding, their fiscal space. 17 Countries are
14 See Committee on Economic, Social and Cultural Rights, general comment No. 2 (1990) on
international technical assistance measures, para. 9.
15 See International Monetary Fund (IMF) Survey: IMF Helping Countries on Health, Social Spending
Policies (2008) available at https://www.imf.org/en/News/Articles/2015/09/28/04/53/sopol072508a.
16 Thomas Stubbs and Alexander Kentikelenis, “Targeted social safeguards in the age of universal social
protection: the IMF and health systems of low-income countries”, Critical Public Health (June 2017).
17 See Isabel Ortiz and others, “Fiscal space for social protection and the SDGs: options to expand social
investments in 187 countries”, Extension of Social Security Working Paper No. 48 (Geneva, ILO,
2017).
struggling to protect hard-fought gains in improving social protection and coverage. Those
gains were the subject of extended advocacy over almost thirty years, but have become
increasingly at risk of being reversed.
19. A 2015 study18 indicated that austerity was expected to impact more than two thirds
of all countries during 2016 to 2020, affecting more than six billion people or nearly 80 per
cent of the global population by 2020 and that, contrary to public perception, austerity
measures were not limited to Europe; many of the principal adjustment measures featured
most prominently in developing countries.
20. Fiscal consolidation policies have varied from one country to another. Nevertheless,
seven of the most common fiscal consolidation measures are: (a) public expenditure cuts
affecting human rights-sensitive fields such as public health care, social security and
education; (b) regressive tax changes; (c) wage bill cuts and caps and reduction of positions
in the public sector; (d) pension reforms; (e) rationalization and further targeting of safety
nets; (f) privatization of public utilities and service providers and introduction of user fees;
and (g) reduction in food, energy and other subsidies affecting the prices of essential goods
and services such as food, heating and housing.19 Fiscal consolidation measures are often
accompanied by structural reforms, such as deregulation, labour market flexibilization,
reduction in labour rights and various administrative and legal reforms. While these
measures are ostensibly aimed at facilitating future economic growth, reducing
unemployment and increasing tax revenues, they have often directly affected the enjoyment
of human rights, including access to justice. 20
21. In some countries, only one or two of the above measures have been implemented.
Increasingly, those reforms have not been implemented in response to an acute financial
crisis, but rather in a preventive manner with the aim of reducing growing budget deficits or
increasing the financial sustainability of public health-care and social security systems.
However, in some countries, all of the above measures were introduced simultaneously.
22. Not all efforts to reduce public spending are harmful to human rights. Improving
access to essential medication by better medication management in the public health system
and replacing expensive medical products by similarly effective, but less expensive, generic
products can actually improve the accessibility and affordability of health care and thus
strengthen the realization of the right to health. Cutting public spending on unnecessary
military hardware can free up much needed revenue for human rights investments. 21
Furthermore, reforming pension systems by encouraging part-time work for retirees and
increasing the retirement age depending on job category, individual choice or personal
health may be ways to ensure the sustainability of pension systems and inter-generational
justice and guarantee the right to social security for current and future generations over
their entire, longer life cycle.
23. Numerous United Nations bodies and human rights mechanisms have concluded that
the financial crises have threatened government expenditure on a wide range of social
welfare services when and where they were most needed. 22 Austerity measures have
contributed to prolonging the economic crisis and compounded the threat to human rights
beyond that posed by the crisis alone.23
18 See Isabel Ortiz and others, “The decade of adjustment”.
19 Ibid. See also Center for Economic and Social Rights, “Assessing austerity”.
20 See Center for Economic and Social Rights, “Assessing austerity”.
21 Ibid.
22 See, for example, E/2013/82; A/HRC/17/34; A/HRC/28/59/Add.1; A/HRC/31/60/Add.2;
A/HRC/34/57/Add.1; A/HRC/25/54/Add.2; A/HRC/34/51/Add.2; E/C.12/GBR/CO/6; E/C.12/2016/1;
reports of the Council of Europe Commissioner for Human Rights, available at
https://www.coe.int/en/web/commissioner/thematic-work/economic-crisis; ILO World Social
Protection Report 2017–2019, pp. 181–184; and United Nations Children’s Fund, Children of
Austerity: Impact of the Great Recession on Child Poverty in Rich Countries (Oxford, Oxford
University Press 2017).
23 See OHCHR, “Promoting a rights-based approach to economic stabilization”, annex II; also
UNCTAD, Beyond Austerity.
24. Measures were very often characterized by horizontal, indiscriminate cuts across
policy areas in order to meet financial savings that were determined in advance, rather than
based on assessments of who would be impacted, whether and how the enjoyment of rights
would be affected and whether alternative measures were available. Short-term measures
have often been justified on the basis of their outcome in the long run, but there is a lack of
empirical evidence that austerity measures have contributed to improved enjoyment of
human rights for all in the long run. In fact, short-term measures that supposedly promise
future social benefits may harm individuals in an irreversible manner and affect their rights,
capabilities or health in a persistent manner. Austerity policies have contributed to
increased social exclusion, as evidenced by long-term unemployment, an increase in
homelessness and other manifestations for which there are no easy cures. Addressing such
consequences costs governments much more than investing in their prevention. It seems
obvious that understanding and monitoring the human rights impact of economic reform
policies are critical for preventing and mitigating short- and long-term impacts and for
building resilience to future crises.
IV. Why human rights should guide economic reform programmes
A. Legal imperatives
25. In the context of situations of financial stress, States’ obligations to promote the
realization of human rights can be broadly categorized as: (a) relating to policy measures at
the international, national and local levels to prevent financial crises; and (b) relating to
minimizing and mitigating the human rights impact of financial crises once a crisis occurs.
The two categories are related. The first category is likely to entail a far wider range of
measures — from specific measures to boost employment and social protection and reduce
inequality, so as to improve banking regulation and strengthen resilience and preparedness
for the next crisis, to more general measures such as addressing the underlying causes of
financial crises through changes in the international financial architecture. While the
present report focuses more on the second category, the two are interlinked and cannot be
completely separated.
26. Human rights do not dictate the specific policy measures that States should take in
response to crises or other financial stress. States have the discretion to select and adopt
policy measures according to their specific economic, social and political circumstances.
Yet, this discretion is not without bounds; fiscal adjustment must be designed in line with
specific substantive and procedural human rights obligations, which draw certain redlines
that should not be crossed.24
27. While States have the primary responsibility to comply with international human
rights treaties and standards, international financial institutions and other international
organizations are also bound to respect human rights. States and relevant United Nations
agencies should ensure that the protection of the most basic economic, social and cultural
rights is, to the maximum extent possible, built into programmes and policies aimed at
promoting adjustment.25 Like any other subject of international law, international financial
institutions are bound by the obligations incumbent upon them under the general rules of
international law, under their constitutions or under the international agreements to which
they are parties. They are therefore obligated to comply with the human rights set out in the
Universal Declaration of Human Rights and in international human rights treaties, which
24 See Center for Economic and Social Rights, “Assessing austerity”; and Aoife Nolan, “Not fit for
purpose? Human rights in times of financial and economic crisis”, European Human Rights Law
Review, vol. 4 (2015) pp. 360–371.
25 See Interpretation of the Agreement of 25 March 1951 between the WHO and Egypt, Advisory
Opinion, I.C.J. Reports 1980, p. 73, at p. 89, para. 37; E/C.12/2016/1, paras. 7–9; and Committee on
Economic, Social and Cultural Rights, general comment No. 2 (1990), para. 9.
have become part of customary international law and which reflect the general principles of
law.
28. While many human rights norms are subject to qualifications and limitations, fiscal
consolidation and economic reform measures should never violate the minimum core
content of economic, social and cultural rights, nor be directly or indirectly discriminatory
or result in the adoption of impermissible retrogressive measures in terms of the enjoyment
or implementation of economic, social and cultural rights. The prohibition of impermissible
retrogression in human rights law is the key economic, social and cultural rights standard
for assessing rights-harming fiscal consolidation and economic reform measures.
Retrogressive measures — that is, taking steps that would reduce the enjoyment of
economic, social and cultural rights — are only permissible under certain strict
circumstances (see below).
29. The onus is on governments to demonstrate that their proposed response measures
will meet their human rights obligations. States, and if applicable, international financial
institutions, must therefore exercise human rights due diligence before implementing far-
reaching economic reforms that have the potential to undermine the enjoyment of human
rights. There is growing international recognition, confirmed by decisions, general
comments, concluding observations and statements of human rights mechanisms and
academic literature, that potentially retrogressive measures could be regarded as acceptable
only if they are:
(a) Temporary, in that they remain in place only as long as they are necessary;
(b) Legitimate, with the ultimate aim of protecting the totality of human rights;
(c) Necessary, in that they must be justifiable after the most careful consideration
of all other less restrictive alternatives;
(d) Reasonable, in that the means chosen are the most suitable and capable of
achieving the legitimate aim;
(e) Proportionate, in the sense that, the adoption of any other policy or failure to
act would be more detrimental to the enjoyment of economic, social and cultural rights;
(f) Not discriminatory and can mitigate the inequalities that can emerge in times
of crisis; and they ensure that the rights of disadvantaged and marginalized individuals and
groups are not disproportionately affected;
(g) Protective of the minimum core content of economic, social and cultural
rights; based on transparency and genuine participation of affected groups in examining the
proposed measures and alternatives;
(h) Subject to meaningful review and accountability procedures.26
30. Non-discrimination is a core principle of international human rights law and is
embodied in all international human rights treaties. In human rights law, discrimination
constitutes any distinction, exclusion, restriction or preference or other differential
treatment that is based on any ground such as race, colour, sex, language, religion, political
or other opinion, national or social origin, property, birth or other status, and which has the
purpose or effect of nullifying or impairing the recognition, enjoyment on an equal footing
or exercise of all rights and freedoms by all persons. It also includes any action or omission
that, whether intended or not, disproportionately affects members of a particular group. In
order to eliminate de facto discrimination, States may be under an obligation to take special
, 26 See E/C.12/2016/1; Committee on Economic, Social and Cultural Rights, general comment No. 19
(2007) on the right to social security, para. 42; Letter dated 16 May 2012 addressed by the
Chairperson of the Committee on Economic, Social and Cultural Rights to States parties to the
International Covenant on Economic, Social and Cultural Rights; Aoife Nolan (ed.) Economic and
Social Rights After the Global Financial Crisis, (Cambridge, United Kingdom, Cambridge University
Press, 2014); and Center for Economic and Social Rights, “Assessing austerity”.
measures to reduce or eliminate discrimination,27 such as affirmative action. It is therefore
essential that the human rights impact of austerity measures and economic reform policies
on different groups in society is not only assessed, but those groups must also participate in
a meaningful manner in the assessment. That includes, in particular, groups at risk of
marginalization or vulnerably, such as women, children, the elderly, ethnic, national,
linguistic, religious or other minorities, migrants, persons with disabilities and others.
Based on context-specific circumstances, the human rights impact of economic reform
policies on other social groups at risk, such as indigenous peoples, refugees or internally
displayed persons, also needs to be assessed and the participation of those groups in the
assessment should be ensured. Particular attention must be given to intersecting patterns of
discrimination and inequality that compound each other.
31. States and international financial institutions have a duty to assess the impact of
proposed and implemented economic reform measures, in particular, when significant
adverse human rights impacts are expected.28 Both the Guiding principles on foreign debt
and human rights29 and the Guiding principles on extreme poverty and human rights 30
enjoin States and international financial institutions to carry out human rights impact
assessments in relation to their respective policies. Treaty bodies have underlined in their
general comments the obligation of States to undertake human rights impact assessments in
the context of budgeting, business activities, trade and investment agreements and
privatization of public services, including in relation to potential extraterritorial human
rights impacts.31
32. The guiding principles for assessing the human rights impact of economic reform
policies do not aim to create new international legal obligations, but rather highlight the
implications of existing international human rights norms and standards applicable to States
and international financial institutions in the context of economic reform measures. While
United Nations human rights bodies have already highlighted key human rights principles
and standards against which adjustment policies should be reviewed, there is need to
develop more practical guidance on how to design and implement a human rights impact
assessment in practice. That would enable the move from human rights on paper to human
rights in action. The guiding principles for assessing the human rights impact of economic
reform policies should assist States, international financial institutions and other
stakeholders in designing, implementing and monitoring economic reform programmes
with the aim of ensuring the protection of human rights. They should be useful to States for
designing economic reform measures aimed at preventing financial crises, but also in more
complex situations, such as when a country is already facing a financial crisis and is
dependent on international financial assistance from international financial institutions.
B. Economic imperatives
33. Respect for human rights and social inclusive economic growth are not necessarily
in opposition, as popular view holds, but can reinforce each other. Economic growth and
development are essential to progress in human development and the realization of human
rights, such as generating jobs and income opportunities as well as resources for investment
in social and economic infrastructure, among others. However, the quality and orientation
of economic growth matter as wide inequalities in and of themselves can dampen growth. It
27 See also Guiding Principles on human rights impact assessment for trade and investment agreements
(A/HRC/19/59/Add.5), appendix, para. 2.5. 28 See E/C.12/2016/1, paras. 4 and 11; also A/HRC/31/60/Add.2, paras. 81 (a) and 83 (b);
A/HRC/34/57/Add.1, para. 83; E/C.12/PRT/CO/4, para. 20; CRC/C/GRC/CO/2-3, para. 29;
CEDAW/C/GRC/CO/7, para. 40; E/C.12/GRC/CO/2, paras. 14, 24 and 32.
29 See A/HRC/20/23, annex.
30 See A/HRC/21/39.
31 See Committee on Economic, Social and Cultural Rights, general comment No. 24 (2017) on State
obligations under the International Covenant on Economic, Social and Cultural Rights in the context
of business activities, paras. 17 and 21–22; and Committee on the Rights of Children, general
comment No. 19 (2016) on public budgeting for the realization of children’s rights, para. 47.
has been argued that inequality causes underdevelopment.32 It has also been argued that,
since economic growth can strengthen human rights, explicit integration of a human rights
orientation into growth strategies is an “opportunity approach”33 that would enhance the
quality and equity of economic growth, including through equitably advancing the right to
education, health, food, water, housing and social protection, akin to a human development
approach.
34. Wealth and income inequalities had been widening within countries over the two to
three decades prior to the latest financial crisis, both in the developing world and among the
more developed economies. In a previous report, the Independent Expert found that
economic inequality was both a result of and a contributor to financial crises.34 In 2015, an
analysis by the Organization for Economic Cooperation and Development (OECD) showed
that income inequality had a negative and statistically significant impact on medium-term
growth. The analysis also indicated that a main factor behind inequality hurting growth is
failure to make adequate education opportunities available to poorer households. 35 The
authors of a related IMF study referred to a “tentative consensus … that inequality can
undermine progress in health and education, cause investment-reducing political and
economic instability, and undercut the social consensus required to adjust in the face of
shocks, and thus that it tends to reduce the pace and durability of growth”.36
35. Equally critical to economic recovery and human development is the expansion of
income and work opportunities for all. Poverty and exclusion from the labour market have
been described as a waste of human resources with adverse impact on economic growth
both through lack of their contribution to the economy and by their need for additional
protection. The right to work and the maintenance of a dynamic labour market are critical
to the health of a national economy. In that perspective, the United Nations Development
Programme 2015 Human Development Report on work recommended that targets for job
creation for women and men should be included among the indicators that finance
departments and central banks monitor regularly to ascertain economic prospects.37
V. Using human rights impact assessments to strengthen policy responses to financial crises
36. An impact assessment is a structured process for identifying, understanding,
assessing and addressing the potential or actual adverse effects of policies, laws,
programmes or projects. It can be carried out ex ante — to predict foreseeable impacts of
proposed policy changes — or ex post — that is, looking back to assess and address the
actual impact of policy change and implementation. While a human rights impact
assessment builds on other types of impact assessments, it focuses on human rights
standards, which offer a specific basis for assessing actions in the light of a State’s
international obligations, and provides the following specific added value.
37. A human rights impact assessment can support governments and international
financial institutions in complying with their international human rights obligations when
carrying out economic reforms by providing a specific framework and process for testing
how proposed policy responses and related budgetary adjustments measure up against those
32 William Easterly, “Inequality does cause underdevelopment: Insights from a new instrument”.
Journal of Development Economics, vol. 84, No. 2 (2007), pp. 755–776. 33 See Sigrid Alexander Koob and others, “Human rights and economic growth: an econometric analysis
of freedom and participation rights”, Matters of Concern: Human Rights Research Papers No. 2017/1,
Danish Institute for Human Rights. 34 See A/HRC/31/60.
35 See OECD (2015), www.oecd-ilibrary.org/employment/in-it-together-why-less-inequality-benefits-
all_9789264235120-en; and OECD (2014), www.oecd.org/newsroom/inequality-hurts-economic-
growth.htm, https://www.oecd.org/els/soc/Focus-Inequality-and-Growth-2014.pdf.
36 Jonathan D. Ostry and others, “Redistribution, inequality, and growth”, Staff Discussion Note
(SDN/14/02) (IMF, February 2014).
37 UNDP, Human Development Report 2015: Work for Human Development (2015).
obligations. Such an exercise contributes to evidence-based policymaking as it provides an
analytical basis for forecasting potential human rights impacts when choosing among policy
options. Just as the Basel Committee on Banking Supervision and European Central Bank
have developed financial stress tests to model how financial institutions may respond to
future financial stress, one could think of human rights impact assessments as social stress
tests that, on the basis of evidence-based policymaking, help to assess the ability of a
country’s social and economic infrastructure to respond to an economic crisis.38
38. A human rights impact assessment makes potential human rights impacts of policy
choices more visible and explicit to a wider population and their representatives, and makes
policy choices and their consequences more explicit for policymakers. A human rights-
based approach, unlike other more technocratic approaches, provides normative guidance to
policymakers about which choices they should make or avoid.
39. The human rights principles of interdependence and interrelatedness mean that the
human rights impact assessment should focus on the full range of harms resulting from
fiscal consolidation measures. It is most often the combination and accumulation of
individual government decisions that cause the most damage if the decisions fall, one on
top of the other, on the same population groups.39 A human rights-based approach can help
to identify how people confronting intersecting inequalities may be affected. Some of the
analyses carried out have incorporated an explicit rights-based approach.40
40. Fiscal policymaking is complex and technocratic and, even at the best of times, it is
often impenetrable to the general public unless governments make particular efforts to
explain and involve the public in policy changes. That would “transform the seemingly
technical arena of fiscal policy into a terrain of public scrutiny and democratic deliberation,
making the ultimate path taken more legitimate and sustainable”.41
41. Particular attention to accountability in the human rights framework provides greater
imperatives for the implementation of prevention, mitigation and redress measures than
traditional social impact assessments. The emphasis of the human rights framework on
access to remedy, both as a right in and of itself and as a component of accountability,
indicates the need for stronger focus on remedy in a human rights impact assessment than
what may be required or expected in other types of impact assessments.42
42. A human rights impact assessment could also serve as a tool for advocacy and
negotiation. While the most common approach for carrying out a human rights impact
assessment may be within or accompanying a regulatory impact assessment carried out by a
government, the process also makes the evidence available to those affected and their
representatives so that they engage with the government. If done in advance of negotiations
with international financial institutions or other debt renegotiation processes, the evidence
base can provide governments with a stronger and more objective analysis that could
strengthen its negotiations on areas that should be protected from reduction in government
spending.
38 See Center for Economic and Social Rights, “Assessing austerity”. 39 Howard Reed and Jonathan Portes, “Cumulative impact assessment: A research report by Landman
Economics and the National Institute of Economic and Social Research for the Equality and Human
Rights Commission”, Equality and Human Rights Commission Research Report 94 (United
Kingdom, 2014). For the most recent data see, United Kingdom, Equality and Human Rights
Commission, “Distributional results for the impact of tax and welfare reforms between 2010–17,
modelled in the 2021/22 tax year”, Interim findings (November 2017).
40 United Kingdom, Office of the Children’s Commissioner, An Adequate Standard of Living: A Child
Rights Based Quantitative Analysis of Budgetary Decisions 2010–13, Final report (June 2013).
41 See Center for Economic and Social Rights, “Assessing austerity”. 42 Danish Institute for Human Rights, “Human rights impact assessment guidance and toolbox” (2016).
VI. Building on what exists already
A. Conceptual foundations and tools in existing approaches
43. There is a wide range of impact assessment tools that have been developed since the
approach was first introduced in the 1970s to address environmental impacts. Human rights
impact assessments are among the newer tools, but the literature has already articulated the
value added of a human rights approach.
44. The specific purpose of a human rights impact assessment is to help policymakers
identify potential inconsistencies between pre-existing human rights obligations and
economic reform policies, irrespective of whether they are pursued exclusively, based on
their own merits, or in response to lending conditionalities imposed by international
financial institutions. The purpose of such an assessment is to ensure that they do not face
obstacles in realizing the human rights that they have made a commitment to guarantee as
States parties to international human rights treaties. Applying a human rights impact
assessment approach to situations of and in response to financial stress would be new in the
context of economic reform. A human rights impact assessment would provide a
framework and normative guidance that would prompt analysis of the deeper causes of a
crisis as well as serious consideration and analysis of alternative responses to crises that can
provide a more sustainable path to longer-term growth.43 Such an assessment would also
provide normative guidance for considering trade-offs and hard choices, strengthen the
legitimacy and local ownership of choices made through inclusive and accountable
decision-making that could contribute to reducing social conflict and supporting longer-
term stability.44
45. Several States have incorporated human rights aspects into their social or regulatory
impact assessment approaches. That demonstrates a general recognition that human rights
require attention as part of the policymaking process. The challenge is to ensure that a
human rights perspective becomes an integral part of economic policymaking.
46. The purpose of and steps for carrying out a human rights impact assessment based
on classic impact assessment approaches are well-established. They include (a) preparation
and screening of possible human rights impacts in consultation with affected groups; (b)
scoping; (c) evidence gathering and data collection using qualitative and quantitative
methods; (d) analysing impacts; (e) formulation of recommendations aimed at preventing
adverse human rights impacts or ensuring that they are mitigated; (f) reporting and
presentation of findings; and (g) ongoing evaluation and monitoring of actual impacts.
47. Important lessons can be learned from the reactions to the 2007–2008 financial crisis
over the past ten years. The impact — both direct and indirect — of economic policy
change on human rights is complex and multidimensional and policymakers could draw on
lessons learned from developing a multidimensional approach to poverty. The
communication of policy impacts to households via transmission channels captured in the
Poverty and Social Impact Analysis used by both the Asian Development Bank and the
World Bank also provide a potentially relevant analytical tool for understanding how
economic reform and fiscal consolidation measures could impact the enjoyment of human
rights. Such techniques could contribute to the introduction of a more rigorous analysis of
how policy impacts are transmitted and how they affect human rights, well beyond the
more traditional human rights analyses that consider only direct governmental violations.
48. Other tools used in Poverty and Social Impact Analyses and budget analyses include
distributive impact analysis, benefit incidence analysis, fiscal incidence analysis 45 and
similar impact analysis tools that can model who — in terms of socioeconomic groups,
43 See, for example, the comprehensive Outcomes, Policy Efforts, Resources and Assessment (OPERA)
framework developed by the Center for Economic and Social Rights.
44 See Center for Economic and Social Rights, “Assessing austerity”.
45 See Nore Lustig (ed.), Commitment to Equity (CEQ) Handbook: Estimating the impact of fiscal policy
on inequality and poverty (New Orleans, CEQ Institute, Tulane University, June 2017).
quintiles, regional areas — receive what benefit from State services; the impact of projected
cuts on poverty rates, consumption and income, among others; and potential adaptive
strategies.46 Those tools provide important quantitative analyses to support a human rights
impact assessment. They can also provide equally warranted assessments of burden-sharing
and fairness in relation to benefits. However, since not all human rights impacts can be
measured adequately by quantitative indicators, such as income, unemployment or poverty
rates, such quantitative analyses should be complemented by a qualitative analysis based on
the normative content of human rights.
49. A human rights impact assessment can very usefully incorporate or be accompanied
by a budget analysis. This may include rights-based budget audits. A number of
organizations have carried out more systematic analyses of budgets and benefit packages
from a human rights point of view. However, most governments do not appear to have
developed principles or tools that are specifically focused on the human rights implications
of fiscal consolidation measures.
50. A far wider range of organizations have prepared or commissioned one-off reports
analysing the impact of financial crises. For example, the former President of the Hellenic
Parliament established the Truth Committee on Public Debt to analyse the human rights
impact of the Greek debt crisis, and the Civil Liberties, Justice and Home Affairs
Committee of the European Parliament commissioned an extensive comparative analysis of
the impact of financial crises on the fundamental rights of individuals in several European
Union member States.47 Human rights agencies,48 international organizations49 and United
Nations human rights bodies 50 have also carried out such analyses. Their reports
significantly enrich the understanding of the types of impacts on human rights and how
those impacts are transmitted to the population to support future human rights impact
assessments. None, however, was specifically designed as a tool that could be replicated
and applied to future situations. Indeed, insofar as standard tools do exist or have been used
— such as in the case of the European Commission’s social impact analyses of the third
adjustment programme of Greece — they are not based on human rights standards.51
B. Particular challenges in developing and applying a human rights
impact assessment to potentially impermissible retrogressive measures
51. What was lacking until the 2007–2008 financial crisis was an analysis of the
multiple ways in which fiscal consolidation measures could impact human rights.
Policymakers need more detailed guidance that could help to combine that knowledge with
analytical approaches that would allow human rights impact assessments to be carried out
in a timely and solid manner and improve policy responses to financial crises by ensuring
that they prevent, minimize and mitigate adverse human rights impacts. Combining rigour
and comprehensiveness with usability will be a particular challenge in developing a human
rights impact assessment approach.
52. Ensuring participation is essential for human rights impact assessments. A key
challenge is how to identify, reach and understand the depth and breadth of impacts on
46 See http://wbi.worldbank.org/boost/tools-resources/topics/sector-analysis/benefit-incidence-analysis.
47 See Aleksandra Ivanoković Tamamović, “The impact of the crisis on fundamental rights across
member States of the EU: comparative analysis”, European Parliament Think Tank (2015), available
at www.europarl.europa.eu/thinktank/en/document.html?reference=IPOL_STU(2015)510021.
48 Notably, the European Union Agency for Fundamental Rights has published numerous reports on
different fundamental rights dimensions of the crisis. See, for example, “The European Union as a
Community of values: safeguarding fundamental rights in times of crisis” (2013), available at
http://fra.europa.eu/en/publication/2013/european-union-community-values-safeguarding-
fundamental-rights-times-crisis.
49 Council of Europe, “Safeguarding human rights in times of economic crisis,” Issue paper,
Commissioner for Human Rights (2013).
50 See, for example, A/HRC/34/57/Add.1; and A/HRC/31/60/Add.2.
51 See, for example, European Commission “Assessment of the social impact of the new Stability
Support Programme for Greece” (SWD(2015)162/F1) (2015).
different groups at risk of marginalization or vulnerability, such as women, children, the
elderly, persons with disability, national, ethnic, linguistic and religious minorities or other
groups that may be at risk in a given national context, such as indigenous peoples, refugees
or internally displaced persons.52
53. Reliable and disaggregated data are needed to strengthen modelling or at least
inform a more detailed analysis. The momentum to widen and strengthen the collection and
analysis of relevant and timely data that can be disaggregated to ascertain progress in the
reduction in inequality among societal groups has grown in the context of the 2030 Agenda
and the 17 Sustainable Development Goals. While the indicators of the Goals may not
necessarily be rights based and the resulting data may not provide a comprehensive
overview of all aspects of human rights, such data-collection processes could serve as a
useful information resource to those working in a human rights impact assessment context.
54. Once the analysis of potential impacts is done, a core part of a human rights impact
assessment is designing prevention, mitigation and compensation measures to counteract
adverse impacts. This is done by selecting alternative measures, modifying proposed
measures through compensating for impacts (e.g., providing cash payments to the poorest
to compensate for the removal of fuel subsidies). The experience of the application of
regulatory impact analyses by the OECD indicated the risk for overall outcomes of relying
on mitigation measures that must be adopted by another part of government that does not
have a mandate to compel the adoption of such measures. Offsetting negative impacts
through separate policy actions is likely to give rise to political difficulties in many cases,
as there may be limited confidence that the promised “policy offsets” will actually be
delivered by other parts of government.53 That points to the need to carry out a human
rights impact assessment on fiscal consolidation and/or economic reform packages at the
national level that would involve a whole-of-government approach.
55. Deciding whether to integrate a human rights impact assessment into a broader
government review, such as a regulatory impact assessment, or carry out a stand-alone
assessment is an important question that should draw on experiences from other areas. A
recent regulatory impact analysis review conducted for OECD considered the integration of
a specific focus — such as environmental or social issues — into a broader regulatory
impact analysis versus conducting a stand-alone impact assessment. The review of
literature found that, in sum, the majority of authors remarked on the relatively poor
performance of both impact assessment options — that is, the integrated regulatory impact
analysis, on the one hand, and separate environmental, social or regulatory impact analyses,
on the other — in ensuring that identified social and environmental impacts were taken into
account in determining policy outcomes. The literature on impact assessment has generally
advocated integration as a means of making policymaking more effective.54
56. Finally, it is important to acknowledge that any tool needs to be adaptable to
potentially different levels of data availability and overall capacity to carry out a human
rights impact assessment, so that the tool can be used in a wider range of circumstances.
VII. Designing a human rights impact assessment to assess potentially impermissible retrogressive measures
57. This section sets out key points that need to be addressed and considered in
designing a human rights impact assessment. The guiding principles for assessing the
human rights impact of economic reform policies would be a set of substantive human
rights principles and procedural guidance on how to conduct a human rights impact
assessment of potentially impermissible retrogressive measures.
52 See, for example, A/HRC/28/59/Add.1.
53 See Rex Deighton-Smith and others, “Promoting inclusive growth through better regulation: The role
of regulatory impact assessment”, OECD Regulatory Policy Working Papers, No. 3 (2016), p. 45.
54 Ibid.
58. Legal basis of the guiding principles: The guiding principles will be based on the
normative guidance as set out in human rights treaties and standards and their authoritative
interpretation by the treaty bodies and other human rights mechanisms. Given the
significant amount of analyses of the recent financial crisis (and subsequent responses)
there is an emerging set of principles developed by authoritative bodies that could be used
as the basis for assessing the human rights compliance of policy choices and proposed
measures.
59. Scope: A key issue to consider is what should trigger the application of the guiding
principles. The normative human rights framework indicates that a human rights impact
assessment should apply to economic reforms that may result in impermissible
retrogression of economic, social and cultural rights. As noted above, economic reforms are
not per se problematic under human rights law. Human rights law sets out standards to
evaluate whether the processes and substance of economic reform measures are aligned
with human rights.
60. Particularly where States implement a combination of measures, the human rights
impact assessment should review the potential cumulative impact of those measures, given
that it is their accumulation that often results in the most severe impacts. The accompanying
human rights impact assessment guidance should propose a set of modules applicable to the
different areas of reform so as to provide more specific information and criteria.
61. Timing: The guiding principles will focus on ex ante human rights impact
assessments, which should be started as early as possible in the policymaking process if
they are to be able to influence the analysis and choice of alternative policy options while
also highlighting the importance of regular, ex post reviews.
62. Addressing different situations: The guiding principles will need to provide
guidance on how the principles can be applied to the different and particular situations in
which potentially retrogressive economic reforms may unfold, for example: (a) acute crisis
situations in response to severe economic shocks, where the risk of adverse human rights
impacts is heightened and in which the economic and financial crisis requires an urgent
response. In such cases, a human rights impact assessment conducted within a short time
frame and addressing only the most significant impacts may be all that can be
accomplished; (b) medium-term reforms — as is currently experienced where austerity
measures stretch into multi-year processes; and (c) accompanying the systematic review of
budgets and their distributional assessments, such as those carried out by the Government
of the United Kingdom or the annual review of the economic policies of all the European
Union member States in the context of the European Semester.
63. In times of acute crisis and rapid policy responses, conducting a sufficiently rigorous
analysis requires a dose of realism and some balancing. Depending on the sophistication of
the process and the analytical tools chosen, a human rights impact assessment, together
with its participatory processes, may take some time to conduct. The guiding principles and
accompanying human rights impact assessment methodology would suggest ways in which
the assessment could be adjusted to meet tighter time schedules in order to respond in the
most acute circumstances. Even where consultation cannot be carried out, governments can
nonetheless apply human rights principles to guide basic choices that can be benchmarked
against longer-term planning that is supported by participatory processes, such as hearings
and committee work on national and sectoral development plans, and annual budget
allocations. Where governments have regulatory or social impact assessments in place as
part of the planning processes that are used to address fiscal and economic policy reforms,
adapting them to address human rights may be an effective short-term approach to ensuring
that human rights considerations are taken into account.
64. As governments move into medium-term planning to respond, a human rights
impact assessment can be used to both look back and evaluate the short-term measures
already taken and propose adjustments and provide evidence for medium- to longer-term
planning going forward.
65. For longer-term reforms and more regular reforms, a human rights impact
assessment can help governments to focus on building resilience so as to better address the
next crisis.
66. What should be covered: The human rights impact assessment should include: (a)
review of all the policy options for tackling a crisis, including countercyclical measures; (b)
analysis of how policy changes and proposed budget cuts and other adjustment measures
are likely to affect the population, in particular the most vulnerable groups — using a
variety of quantitative and qualitative tools; (c) analysis of the extent to which budget,
policy, legislative and other changes may contribute to fulfilling the State’s human rights
obligations or potentially undermine them; and (d) a (non-exhaustive) list of preventive or
mitigating measures to take to respond to the analysis that are in line with the government’s
human rights obligations.
67. Who should conduct the human rights impact assessment: Who carries out the
process will have important implications for the uptake of the results, the expertise brought
to bear, potential conflicts of interest, the depth of the consultations carried out, the degree
to which recommendations are challenged and justified, or whether the process simply
becomes a validation of decisions already taken.55 There is no one optimal solution for
conducting human rights impact assessments. Whether it is the government ministry or
ministries responsible for the reform, international financial institutions, bodies with human
rights expertise, such as a national human rights institution or a civil society organization,
all have trade-offs. The guiding principles would build on the criteria developed in the
Guiding principles for human rights impact assessments of trade and investment
agreements, 56 which set out specific criteria for the conduct of human rights impact
assessments, such as the independence of the body carrying out the assessment; appropriate
expertise and funding; and the status accorded to the assessment so that the results are
actually considered in the final decision-making processes.57
68. How data and information should be collected: The norms that underpin human
rights duties must be translated into more concrete, objective and measurable criteria for
assessing how policy choices impact rights fulfilment.58 The norms must then be further
“translated” into tests that can guide a meaningful analysis. A human rights impact
assessment to assess economic reform measures will often be complex as it involves both
quantitative and qualitative analyses to understand the implications of particular budget cuts
and changes in taxation and social security entitlements. On the quantitative analysis side,
there are well-developed approaches to modelling distributional impacts using income
quintiles. In order to ensure compliance with the human rights requirement of non-
discrimination and that due attention is paid to the situation of groups at risk of
marginalization or vulnerability, it is essential that those indicators provide information
disaggregated by gender, disability, age group, region, ethnicity and any other grounds
considered relevant, based on a contextual, country-level appreciation of groups at risk.
69. How the human rights impact assessment should be carried out: The guiding
principles for assessing human rights impacts should provide procedural guidance on how
to undertake such assessment. The methodology should draw from the experience of impact
assessment processes already in place. In general, it would include screening, scoping,
evidence-gathering, including data collection, analysing impacts, conclusions and
recommendations, including consideration of less harmful options, prevention, mitigation
and management.
70. The design and implementation of the procedure should be based on the principles
of transparency and inclusive participation. More specifically, active participation in
addressing fiscal consolidation measures requires, as a start, access to information.
Governments conducting a human rights impact assessment may have better access to
information, but they must, to the greatest extent possible, make information available to
the stakeholders in the human rights impact assessment process.59
55 See Center for Economic and Social Rights, “Assessing austerity”.
56 See A/HRC/19/59/Add.5, appendix.
57 The criteria also include transparency and inclusive participation, which will be addressed below.
58 See Center for Economic and Social Rights, “Assessing austerity”.
59 The Government of the Plurinational State of Bolivia has developed a set of human rights indicators
that enable the State and civil society to have official, updated and disaggregated statistical
71. A human rights impact assessment should ensure meaningful participation of all
stakeholders, including relevant government departments, business and trade union
representatives and, in particular, affected population groups and their representatives, such
as women, children, the elderly, persons with disabilities, minorities and other groups at
risk of marginalization in the national context, such as indigenous peoples. Active
participation in addressing fiscal consolidation measures also requires the appropriate time
frame for both authorities and those affected and their representatives to be able to prepare
and evaluate policy alternatives. Given the technical complexities of fiscal consolidation
measures, a certain level of expertise is needed for engaging in the actual evaluation. That
is where the role of civil society organizations, think tanks and academics is particularly
valuable as they can provide expert evaluation. They can play an important role in engaging
with affected groups to ensure that their experiences and concerns are incorporated in the
analysis and in “translating” the findings of the impact analysis to a wider audience.
VIII. Conclusions and recommendations
A. Conclusions and way forward
72. Neither the lessons learned from responses to earlier crises about the
importance of protecting social spending nor the increasing emphasis on the
instrumental role of human rights in improving development outcomes appear to have
played a sufficiently explicit role in the analyses or structuring of responses by
governments and international financial institutions to the recent financial crisis. The
conclusions drawn in 1990 by the Committee on Economic, Social and Cultural Rights
in response to earlier crises remain equally valid today. Although the severe human
rights impacts of the recent financial crisis have been widely and well documented,
policy responses to the crisis revealed a deep-seated structural neglect of human rights
in economic policy formulation, insufficient protection of the most vulnerable and a
lack of attention to participation, consultation, transparency and accountability.
73. That neglect is the driving force behind the development of guiding principles
for assessing the human rights impact of economic reform programmes and the
development of analytical and methodological tools to assess human rights impacts.
The guiding principles will help States and international financial institutions to
comply with their human rights obligations in periods of financial distress when
considering fiscal consolidation measures, countercyclical initiatives and alternative
economic choices. Although such human rights-specific guidance has not yet been
adequately developed, relevant tools, experience and research exist to inform the
efforts to do so.
74. The guiding principles should start from the premise that managing economic
and fiscal affairs is a core government function and responsibility. Fiscal consolidation
and wider economic reforms are not inherently incompatible with a State’s human
rights duties; indeed, such measures can comply with international standards if they
are designed and implemented with those standards in mind. The extent to which
budget cuts may undermine human rights depends on how such cuts are
implemented. For example, it makes a difference whether cuts worsen existing
inequalities or not and who is affected. Cost containment measures should be planned
in such a way that they do not undermine the accessibility, affordability and quality of
service delivery. The aim of reforms should be to strengthen, adjust and close gaps in
social protection systems, not dismantle or undermine them.
75. Timely and credible data that can be disaggregated as appropriate is critical to
analysing the impacts of fiscal consolidation in a robust, useful and credible manner
information, which allows more precise monitoring of the human rights situation and the impact of
public policies on the population. See the submission at http://sice.ine.gob.bo/HR2016/UN/index.
php?r=site/index.
for economic policymakers. The strengthening of national statistics for monitoring
progress towards the achievement of the Sustainable Development Goals may
facilitate efforts to monitor progress in some fields of human rights realization, but
may need to be accompanied by additional indicators covering particular rights.
76. While the guiding principles will focus on important policies and processes that
governments put in place in the immediate aftermath of a crisis, it is equally
important to consider the measures that governments take in the medium and longer
term to build transformative resilience, even during healthy economic times.
Experience has shown the importance of transformative policy responses through the
strengthening of institutions and policies to enable governments and people — in
particular the poor and vulnerable — to weather shocks and to recover swiftly
following a crisis.
77. The Independent Expert intends to circulate the draft guiding principles for
assessing the human rights impact of economic reform policies to States, international
financial institutions, national human rights institutions, civil society organizations
and other relevant stakeholders by August 2018 with a view to obtaining written
feedback in the form of comments from all stakeholders. The draft guiding principles
will also be published on his official web page. He also plans to convene during 2018 a
second expert meeting, circulate the revised draft based on feedback received, and
hold a public consultation with States and other stakeholders. The Independent
Expert would like to submit the final text of the guiding principles to the Human
Rights Council for its consideration at its fortieth session.
B. Recommendations
78. In order to advance the discussion on the development of the guiding principles
for assessing the human rights impact of economic reform policies, the Independent
Expert recommends that the guiding principles should:
(a) Recognize that managing economic and fiscal affairs is a core
government function, while underlining the obligations of States and international
financial institutions to ensure that their economic reform policies and conditionalities
on financial support respect human rights;
(b) Draw on existing human rights standards relating to economic, social,
cultural, civil and political rights at the international and regional levels, including
core international human rights treaties, their authoritative interpretation in general
comments, statements, decisions, guiding principles, concluding observations and
recommendations issued by international human rights mechanisms;
(c) Set out the normative framework that has emerged from the extensive
work carried out to date in relation to human rights and the financial crisis, and
provide specific guidance on how to apply the framework. That should include
specific guidance on assessing economic reform policies with a view to: (i) identifying
positive human rights impacts; (ii) preventing or mitigating adverse impacts on the
enjoyment of economic, social, cultural, civil and political rights; (iii) identifying and
preventing potential violations of the core minimum obligations relating to economic,
social and cultural rights; (iv) screening economic reform measures against
discriminatory impacts in law and in practice that are incompatible with international
human rights law; (v) identifying impermissible retrogression of economic, social and
cultural rights; and (vi) clarifying the circumstances in which certain retrogressive
measures may be justifiable, based on the principles of necessity, proportionality,
legitimacy and reasonableness;
(d) Be applicable to different circumstances in the context of acute financial
crises, in less challenging economic times, in developing countries and in highly
advanced economies;
(e) Ensure prompt consideration of various policy alternatives, beyond
austerity measures, in response to fiscal constraints;
(f) Complement debt sustainability analyses with a view to integrating
human rights impacts and social sustainability in the assessment;
(g) Provide guidance on and references to analytical approaches that could
make visible the potential impacts of reform measures and show how the burden of
adjustment is shared across different income quintiles, gender, age and different
social groups, including the most marginalized;
(h) Ensure that the assessment of human rights impacts is based on
qualitative and quantitative data, disaggregated by gender, disability, age group,
region, ethnicity and any other relevant grounds, based on a contextual, country-level
appreciation of groups at risk of marginalization;
(i) Provide specific guidance for carrying out cumulative, rights-based
impact assessments of various reforms measures that are often implemented in
parallel as part of fiscal consolidation packages, such as taxation and public
expenditure reform, so that the fuller impact on rights holders and particular groups
at risk can be assessed;
(j) Set out an international standard and framework for conducting human
rights impact assessments of economic reform policies that can be adjusted to the
particular needs of government departments, advisory bodies, parliamentary
committees, national human rights institutions, international financial institutions,
international human rights mechanisms, academic institutions or civil society
organizations;
(k) Include suggestions on how to integrate human rights impact
assessments into existing assessment methodologies that governments, international
financial institutions and other bodies may already be using;
(l) Consider the best way to carry out a human rights impact assessment in
order to ensure that the results can effectively inform policy decisions, while at the
same time address the independence and credibility of the assessment undertaken;
(m) Establish the criteria to be met by the assessment team;
(n) Provide guidance on how to ensure the meaningful participation of all
relevant stakeholders and affected individuals and groups, including women, children,
the elderly, persons with disability, migrants, minorities and other groups at risk of
vulnerability, such as indigenous peoples, refugees and internally displaced persons;
(o) Set out the standards for transparency and accountability when carrying
out the impact assessment and for the publication and reporting of information and
the assessment;
(p) Recommend that human rights impact assessments be instituted and
carried out regularly, before, during and after the implementation of economic
reforms that may have the potential to cause significant adverse human rights
impacts, and facilitate States’ reporting obligations to the Committee on Economic,
Social and Cultural Rights.