38/48 Report of the Working Group on the issue of human rights and transnational corporations and other business enterprises
Document Type: Final Report
Date: 2018 May
Session: 38th Regular Session (2018 Jun)
Agenda Item: Item3: Promotion and protection of all human rights, civil, political, economic, social and cultural rights, including the right to development
GE.18-07001(E)
Human Rights Council Thirty-eighth session
18 June–6 July 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 Working Group on the issue of human rights and transnational corporations and other business enterprises
Note by the Secretariat
The present report, prepared pursuant to Council resolutions 17/4 and 35/7,
examines the duty of States to protect against human rights abuses by business enterprises
to whom they provide support for trade and investment promotion. It explores how States
can incentivize business respect for human rights in this context, including through
withdrawal of trade and investment support in situations where businesses fail to meet their
corporate responsibility to respect human rights.
United Nations A/HRC/38/48
Contents
Page
I. Introduction ................................................................................................................................... 3
A. Background, focus and rationale of the report ...................................................................... 3
B. Definition and objectives ...................................................................................................... 4
II. Trade and export promotion .......................................................................................................... 4
A. Respect for human rights as a requirement and condition of State support .......................... 4
B. Trade missions ...................................................................................................................... 5
C. Trade advocacy ..................................................................................................................... 6
D. Training and guidance for trade and embassy personnel and for businesses ........................ 7
III. Role of export credit agencies ....................................................................................................... 8
A. Examples of good practices among export credit agencies................................................... 13
B. Gaps in the OECD Common Approaches............................................................................. 14
C. Moving beyond the OECD export credit agencies ............................................................... 15
D. Export credit agencies and access to remedy ........................................................................ 16
E. Relationship between the human rights record of a company and future support
by the State ........................................................................................................................... 16
IV. Import and export restrictions to prevent trade in goods with links to human rights abuses ......... 17
V. Conclusions and recommendations ............................................................................................... 18
A. Conclusions .......................................................................................................................... 18
B. Recommendations ................................................................................................................. 19
I. Introduction
A. Background, focus and rationale of the report
1. The starting point for the present discussion is the Guiding Principles on Business
and Human Rights: Implementing the United Nations “Protect, Respect and Remedy”
Framework. Since their unanimous endorsement by the Human Rights Council in 2011, the
Guiding Principles have become the authoritative global reference for preventing and
addressing adverse human rights impacts arising from business-related activity.
2. In an earlier report, the Working Group examined how States — pursuant to pillar I
of the Guiding Principles, the State duty to protect — should lead by example as economic
actors by ensuring that State-owned enterprises respect human rights (A/HRC/32/45). The
present report focuses on another area where States play an important role as economic
actors: trade promotion, also referred to as economic or commercial diplomacy.
3. States act as gatekeepers when they provide much needed support to businesses by
providing trade finance and advisory services aimed at expanding export opportunities. As
gatekeepers, States can use their leverage to promote a race to the top by setting out clearly
the expectation that businesses respect human rights as a precondition for receiving
government support for export activities. States can also promote responsible imports by
restricting the flow of goods in supply chains that involve serious human rights abuses.
4. Why should States focus on human rights and the role of business in relation to
human rights in the context of trade and investment promotion? The short answer is that
global supply chains in cross-border trade present significant human rights risks and
challenges. In the export context, sellers of products in global markets need to ensure that
the products they are selling will not cause, contribute or be directly linked to adverse
human rights impacts. In the context of imports, a buyer of goods in the global marketplace
also needs to ensure that the goods it is purchasing were not produced or manufactured in a
way that caused, contributed to or was directly linked to adverse human rights impacts,
such as forced labour or human trafficking.
5. While there is a much larger connection between the global trading system and
adverse human rights impacts, the present report focuses solely on the role States play as
service providers and public financiers, insurers and guarantors to companies seeking
support for export/import transactions. The report does not address issues of global trade
rules or the role of trade treaties and multilateral trade organizations with respect to adverse
business-related human rights impacts.
6. In the present report, the Working Group unpacks Guiding Principle 4, which sets
forth the expectation that States should take additional steps to protect against human rights
abuses by business enterprises that receive substantial support and services from State
agencies including, where appropriate, by requiring human rights due diligence. The
commentary to Guiding Principle 4 indicates that if State agencies do not explicitly
consider the actual and potential adverse impacts on human rights of beneficiary
enterprises, they put themselves at risk and may add to the human rights challenges faced
by the recipient State.
7. Furthermore, in general comment No. 24 (2017) on State obligations under the
International Covenant on Economic, Social and Cultural Rights, the Committee on
Economic, Social and Cultural Rights calls on States to revise relevant tax codes, public
procurement contracts and export credits, and other forms of State support, privileges and
advantages in the case of human rights violations, thus aligning business incentives with
human rights responsibilities. In 2017, the leaders of the Group of 20 also recognized the
connection between human rights and trade when they referred to the Guiding Principles in
a call for more sustainable supply chains.1
1 See “G20 Leaders’ declaration: shaping an interconnected world” (July 2017).
8. For the present report, the Working Group solicited input from all stakeholders,
including States, and from the Export Credit Group of the Organization for Economic
Cooperation and Development (OECD) and its separate working group of environmental
and social practitioners, which includes representatives of non-OECD States as well.
Consultations also included an open consultation in Geneva in September 2017 and a
dedicated session at the 2017 Forum on Business and Human Rights.2
B. Definition and objectives
9. States provide a wide range of services for businesses engaged in trade and export.
Those services include selecting companies for participation in trade missions, export
promotion and marketing for companies through trade and commercial officers in
embassies overseas, advocacy by senior government officials of companies who are
bidding on major overseas projects, political risk insurance, guarantees and support at
major trade shows. The present report refers to such trade promotion activities by public
actors as “commercial” or “economic” diplomacy.
10. There are innovative models being deployed in some States, but the promise of
Guiding Principle 4 remains mostly unfulfilled. In the report, the Working Group explores
opportunities for States to take the lead and promote greater respect for human rights. As
noted in the report, in related areas such as combating corruption and business integrity,
models exist in trade and investment promotion that could be adapted to encompass
business respect for human rights. While anti-corruption commitments may be linked to
State commitments via international treaties (for example, the United Nations Convention
against Corruption), the principle is still a useful one: that by embedding a requirement into
a contract between trade promotion agencies and companies, if there is a breach of such an
agreement, that would be a basis for further action, such as the withdrawal of future trade
support or other government services.
11. The first objective of the report is to understand how States can use their leverage
with respect to trade and investment promotion and the export/import process to also
promote greater corporate respect for human rights. The second objective is to explore
where, pursuant to the State duty to protect against business-related human rights impacts,
there are opportunities for States to require businesses with whom they interact, to align
their activities with the Guiding Principles through the requirements of human rights due
diligence and addressing issues relating to access to effective remedy.
II. Trade and export promotion
A. Respect for human rights as a requirement and condition of State
support
12. Many States provide ongoing advisory services for companies seeking to export
their goods into foreign markets. Such services often reach small and medium-sized
enterprises, which may lack the in-house expertise and financial resources for individual
market research. To date, few States have asked businesses to demonstrate a commitment to
the Guiding Principles as a prerequisite for receiving services from State export promotion
entities. For those who have asked for human rights commitments, there have been no
studies to examine how well such commitments are monitored and implemented by States.
13. Canada has asked for specific commitments from the extractive sector. As part of
the country’s enhanced corporate social responsibility strategy, Canadian extractive
companies are expected to align their operations overseas with Canadian corporate social
responsibility guidelines and will be eligible for enhanced economic diplomacy only after
2 The following States responded to the Working Group’s survey: Costa Rica, Denmark, Finland,
France, Germany, Italy, Mexico, Mongolia, Namibia, Netherlands, Philippines, Portugal, Russian
Federation and United States of America.
doing so. Those commitments include adherence to the Guiding Principles and to the
OECD Guidelines for Multinational Enterprises.
14. Chile notes in its National Action Plan on business and human rights that it intends
to establish, if relevant, requirements about sustainability and respect for human rights, as
criteria to choose business enterprises to participate in programmes to promote exports and
corporate activities. 3 The Ministry of Commerce, Industry and Tourism in Colombia
intends to link access to trade and investment support to business commitments to respect
human rights.4 The Danish Ministry of Foreign Affairs requires Danish companies with
which it interacts to comply with a code of conduct. That includes requirements not to
practise discrimination, not to use child labour and to recognize workers’ rights.5
15. The South African Department of Trade and Industry has developed guidelines for
good business practice by South African companies operating in the rest of Africa, setting
out the expectation that companies will respect human rights and adhere to the principles of
the United Nations Global Compact.6 While the guidelines are voluntary, they demonstrate
how a State can tie responsible business conduct to an export promotion and trade agenda.
16. Asking companies to demonstrate a commitment to ethical standards is not new.
States have often required businesses to make anti-corruption pledges as a condition of
trade-related support. As part of the 2017 G20 process, the Business-20 (B20) issued a
policy paper on responsible business conduct and combating corruption, noting that: “An
adequate and robust compliance program should also be a requirement for officially
supported export credits and trade insurances.”7
17. For example, the Kenya Export Promotion Council has an anti-corruption policy
which includes enhanced due diligence of its potential local export partners.8 Austrade,
Australia’s trade promotion service requires companies to certify ethical business practices
as part of their terms of service: “Your organization must be committed to maintaining
business ethics and legal obligations including anti-bribery laws in Australia and
overseas.”9 Such processes could be expanded to require applicants to also demonstrate
commitments to the Guiding Principles and the OECD Guidelines alongside an anti-bribery
or business ethics pledge.
B. Trade missions
18. Trade missions are an important tool in export promotion and commercial
diplomacy. They allow potential exporters to learn how business is conducted in a foreign
market and to find potential overseas buyers. They are often facilitated by a State export
promotion agency or department and/or with the assistance of trade or commercial officers
located in embassies in the country that the delegation will visit. High-level government
officials may also head a trade mission delegation.
19. The Council of Europe recommendation on human rights and business discusses
trade missions. It notes that “Member States should, when business enterprises … are
represented in a trade mission to member States and third countries, address and discuss
3 See www.ohchr.org/EN/Issues/Business/Pages/NationalActionPlans.aspx.
4 See “National Action Plan on human rights and business”, available at www.ohchr.org/EN/Issues/Business/Pages/NationalActionPlans.aspx.
5 Danish submission in response to the call for stakeholder inputs.
6 See, for example, www.rmi.org.za/guidelines-for-good-business-practice-by-south-african-
companies-operating-in-the-rest-of-africa/.
7 See B20 Cross-thematic Group on Business Conduct and Anti-corruption, “Promoting integrity by
creating opportunities for responsible businesses”.
8 Kenya Export Promotion Council, “Revised anti-corruption policy” (2011).
9 See www.austrade.gov.au/Australian/How-Austrade-can-help/Trade-services/Opportunties-terms-
and-conditions.
possible adverse effects future operations might have on the human rights situation in those
countries and require participating companies to respect the UN Guiding Principles …”.10
20. Only a handful of States have sought to integrate human rights issues into official
trade missions. The United Kingdom of Great Britain and Northern Ireland did so in
relation to Myanmar. Finland involved human rights civil society organizations in a joint
trade mission led by its trade and development ministers to the United Republic of
Tanzania and Zambia.11 In its recent National Action Plan, Ireland committed to advising
companies who will participate in trade missions about human rights in destination
countries and providing information about its laws prohibiting foreign bribery.12 Belgium
will also ensure that the trade missions it organizes include awareness-raising regarding
respect for human rights.13
21. The Netherlands now has a routine requirement for all trade missions to brief
businesses on human rights issues. It takes one more step in selecting mission participants.
Dutch companies that wish to participate in government-sponsored trade missions must
demonstrate a commitment to the OECD Guidelines for Multinational Enterprises, with an
emphasis on human rights risk analysis. The Government verifies to what extent the
business is aware of the Guidelines and, shortly before departing on a trade mission, the
business is provided with training on standards of responsible business conduct.14
22. Trade missions provide unique opportunities for States to raise awareness of
business and human rights dilemmas related to the market they are visiting.15 For example,
in countries where attacks on human rights defenders are a significant risk, that should be
raised in the context of trade missions. Civil society organizations have suggested to the
Working Group that this may be a particularly useful avenue for addressing the risks faced
by defenders when there is a link to businesses receiving trade or investment support from
their home Government.16
23. States already vet companies that participate in foreign trade missions to ensure they
meet certain criteria. The United States of America, for example, screens applicants for
trade mission for bribery concerns and also asks them to sign a no-bribery pledge as a
precondition to participation. 17 States should consider developing similar procedures
whereby companies are asked to demonstrate a commitment to the Guiding Principles and
responsible business conduct as a precondition to participation in a mission. The Dutch
example appears to be the only model that uses vetting for human rights as a precondition
for mission selection.
C. Trade advocacy
24. Trade advocacy support is characterized as those activities for which embassy
personnel and high-ranking government officials will advocate on behalf of domestic
companies with foreign public officials. The purpose of such advocacy is to highlight the
strengths of a national company when it is competing against companies from other
countries for a government contract in a foreign market.
10 Council of Europe, “Human rights and business” (recommendation CM/Rec(2016)3 of the Council of
Ministers).
11 Institute for Human Rights and Business, “State of play. Human rights in the political economy of
States: avenues for application” (March 2014).
12 See “National Plan on business and human rights 2017–2020”, available from
https://globalnaps.org/country/ireland/.
13 Belgian National Action Plan available from https://globalnaps.org/country/belgium./
14 OECD, “Responsible business conduct and economic diplomacy tools” (June 2017).
15 Institute for Human Rights and Business, “State of play”.
16 See consultation summary note on scaling up initiatives to protect human rights defenders, (November 2017), available from www.ohchr.org/Documents/Issues/Business/
ScalingUpInitiativesProtectHRDefenders_30Nov2017.pdf.
17 See, for example, United States Government Publishing Office conditions for trade missions,
available from www.gpo.gov/fdsys/granule/FR-2017-08-01/2017-16082.
25. Having a senior minister advocate for a company is a substantial benefit. States
should only advocate for companies that respect human rights and screen requests to make
that determination.
26. The Working Group has not received any information about States requiring
companies for whom they advocate to demonstrate respect for human rights or further
adoption of the Guiding Principles. As noted above, what some States have done is to
require companies to make commitments focused on integrity and combating corruption.
27. In Canada trade advocacy may include providing support to a company in
interactions with foreign public officials and in certain circumstances in the public sphere
generally. This may also include making representations on behalf of the company to
foreign public officials, accompanying clients to meetings with foreign public officials, or
supporting and/or participating in, events tailored to a particular company. The Government
of Canada requires companies seeking such support from its Trade Commissioner Service
to sign an integrity declaration. A company must attest that it understands the ethical
expectations of Canada and has not been “charged, convicted or sanctioned for bribery or
corruption, and will not engage in such illegal activities”. 18 If a company has been
sanctioned for bribery, it must disclose past misconduct, which may affect the support it
receives from the Government of Canada.
28. The United States International Trade Administration also has an advocacy centre. A
company interested in receiving United States advocacy assistance must first file an
advocacy questionnaire and anti-bribery agreement with the advocacy centre. The anti-
bribery agreement requires a company to certify that neither the company nor its affiliates
will engage in bribery of foreign officials.19
D. Training and guidance for trade and embassy personnel and for
businesses
29. OECD has noted in relation to the promotion of responsible business conduct that
“for some countries, the NAPs have provided an impetus to step up specific training and
capacity building of diplomatic personnel”.20
30. There is still room for greater training and education of trade officers within national
export promotion agencies and of those officials working within embassies or missions in
host States.21 However, at present this need is not matched by relevant guidance.
31. Existing guidance (for example from the International Trade Centre) mentions the
need to train trade representatives on issues relating to combating corruption and fleetingly
mentions social compliance and corporate social responsibility as other issues of which
trade representatives should be aware, but does not elaborate further on the subject. A trade
promotion officer may not feel comfortable providing guidance to companies on human
rights risks. The language of risk mitigation in the Guiding Principles and the framework of
human rights due diligence therefore provide a useful framework for speaking about the
processes companies need to undertake to respect human rights.
32. Germany intends to provide training on its National Action Plan and the Guiding
Principles for trade officers in embassies and consulates. The training will enable trade
officers to provide support to German companies that wish to exercise human rights due
diligence in the respective host countries. Staff members of German export and investment
18 See http://tradecommissioner.gc.ca/how-tcs-can-help-comment-sdc-peut-aider.aspx?lang=eng.
19 See https://2016.export.gov/advocacy/eg_main_092202.asp.
20 See OECD, “Responsible business conduct and economic diplomacy tools.
21 International Trade Centre, Entering New Markets. A Guide for Foreign Trade Representatives”
(2013).
guarantee agencies are offered classroom training on the Plan and environmental and social
specialists act as a helpdesk.22
33. In addition to training trade officials, some States are providing tools for their
officials as well as for companies.
34. The Belgian National Action Plan briefly mentions that diplomats do not always
have the necessary tools or knowledge of human rights and business in particular, to inform
and guide companies to ensure that their extraterritorial activities take account of their
impact on human rights. As a result, Belgian trade representatives will receive a toolbox to
better inform companies that seek to export. The toolbox will include elements on
grievance mechanisms enabling the Belgian diplomatic network to better inform businesses
and victims of possible business-related abuses about access to remedy in Belgium. The
United Kingdom has developed a government business and human rights toolkit, which
aims to give guidance to political, economic, commercial and development officers in
embassies as to how to promote responsible business conduct by British companies
operating overseas.23
35. Some training for companies is done via partnerships between States. Sweden has
entered into memorandums of understanding with certain countries on corporate social
responsibility. For example, there are two memorandums between China and Sweden,
including an action plan establishing a centre for corporate social responsibility at the
Swedish Embassy in Beijing. Among other activities, the centre provides training for
companies. 24 Chile and Sweden signed a memorandum of understanding on corporate
social responsibility in 2012. India and China have a partnership agreement to promote
trade and investment, which includes a commitment to fostering stronger cooperation
between national chambers of commerce and encourages companies in both States to
include corporate social responsibility in their corporate development strategies.25
36. China has also focused on providing sectoral guidance to its companies. The 2014
guidelines for social responsibility in outbound mining investment produced by the China
Chamber of Commerce of Metals, Minerals and Chemical Importers and Exporters call for
Chinese mining companies undertaking outbound mining investments, cooperation and
trade to strictly observe the Guiding Principles during the entire life-cycle of the mining
project and to strengthen responsibility throughout the extractive industries value chain.
37. The increasing number of States that are including training and educational
resources on corporate social responsibility and on business and human rights for both trade
and embassy personnel and companies operating or trading abroad is a positive step.
Training and counselling help to raise awareness of key human rights issues in the private
sector. States need to consider how to move such training beyond theory into actual
practice. To that extent, training needs to include discussions of real-world dilemmas that
occur to enable trade officers to start thinking critically about the advisory role they play
with companies. At the same time, training and education is at most a partial step towards
States fulfilling their duty under Guiding Principle 4. Few States link providing trade
promotion services or benefits, such as participation in a trade mission, to requiring
businesses to demonstrate respect for human rights and use of the Guiding Principles.
III. Role of export credit agencies
38. Export credit is a tool used by Governments to provide trade finance to the private
sector. Under an export credit regime, States provide loans and other types of risk cover
(for example, insurance) for a domestic exporter’s international buyers. Providing financing
22 National Action Plan. Implementation of the UN Guiding Principles on Business and Human Rights
2016–2020, available from https://globalnaps.org/country/germany/.
23 See OECD, “Responsible business conduct and economic diplomacy tools”.
24 See, for example, http://csr2.mofcom.gov.cn/article/media/201709/20170902652354.shtml.
25 See Five-Year Development Program for Economic and Trade Cooperation between the People’s
Republic of China and the Republic of India (September 2014).
to potential buyers offers an incentive to foreign buyers to choose an exporter. Insurance
and guarantees reduce the risk to the domestic exporter of non-payment by the overseas
buyer.
39. In practical terms, export credit agencies provide three main instruments to support
domestic exporters (a) insurance, (b) short-, medium- and long-term export credits and (c)
guarantees, often coupled with advisory services (market information).26
40. There are various models of export credit agency including:
(a) Those which are State agencies or departments;
(b) Government-owned State corporations that are operated independently
but have government oversight;
(c) Consortiums of public/private companies that may be controlled by a
Government through funding or regulation.27
41. Export credit agencies fulfil the basic financial needs of exporters, including pre-
export working capital to short-term credit extended to importers; medium- to long-term
financing support to overseas importers; and project financing and/or special export
structures. Although their share of the overall financing of global trade remains small, they
play an increasingly important role. 28 In 2015 alone, export credit agencies in OECD
member nations provided $125 billion in credit, insurance, guarantees and interest
support.29 In the period 2012–2016, public export and investment insurance via export
credit agencies totalled between $920 billion and $1.031 trillion. 30 They are also a
significant source of public financial support for infrastructure projects in developing
countries. While their mandate and objectives are commercial, they may produce positive
impacts in developing countries, such as the creation of more and better jobs, or the
provision of capital and climate finance in or to developing countries.31
42. Although export credit agencies support domestic exporters, they do so typically by
providing financing for a project sponsor who is purchasing goods as part of a larger
infrastructure project or supply chain. A significant number of the projects supported by
export credit agencies, particularly large dams, oil pipelines, coal and nuclear power plants,
chemical facilities, mining projects and forestry and plantation projects, may lead to
adverse human rights impacts (A/66/271). Projects by export credit agencies have been
associated with the forced displacement of local populations, poor conditions of work,
suppression of the rights to freedom of expression and association and exposure to
environmental complaints, as well as the destruction of cultural sites. 32 Export credit
agencies have also been scrutinized by civil society for more systemic issues, such as the
nature of the projects and industries they finance (for example, the arms trade) or their
linkage to sovereign debt in developing countries.33
26 See Edna Shöne, Sustainable ECA business — an irreversible global trend, Global Policy Journal
blog (February 2015).
27 See Karyn Keenan, “Export credit agencies and the international law of human rights”, Halifax
Initiative (2008). Although export credit agencies take various organizational forms, they are usually
backed by a Government and operate in accordance with a government mandate.
28 Both Ends, “Balancing risks: what export credit agencies can do for sustainable development”
(January 2007).
29 See https://globalnaps.org/issue/export-credit/.
30 Berne Union aggregate statistics, 2016 year end, available from www.berneunion.org/DataReports.
31 See Trinomics, “Pilot study of private finance mobilised by Denmark for climate action in developing
countries” (2015).
32 See Jubilee Australia, “Risky business. Shining a light on Australia’s export credit agency”
(December 2009); ECA Watch, “Race to the bottom, take II” (September 2003); and Robert
McCorquodale and Penelope Simons, “Responsibility beyond borders: State responsibility for
extraterritorial violations by corporations of international human rights law”, Modern Law Review,
vol. 70, No. 4 (July 2007).
33 See European Network against Arms Trade, “European export credit agencies and the financing of
arms trade” (2007) and European Network on Debt and Development, “Exporting goods or exporting
debts? Export credit agencies and the roots of developing country debt” (December 2011).
43. Civil society groups have raised and continue to raise concerns about specific
projects financed by export credit agencies.34 The case of the Ilisu dam is often cited as an
example of a project which has had significant human rights impacts, such as population
resettlement and the destruction of cultural heritage. In 2005, a consortium applied for
export credit guarantees in Austria, Germany and Switzerland for the construction of a
hydroelectric dam. The respective export credit agencies offered their support based on 153
environmental and social commitments but the Governments of Austria, Germany and
Switzerland ultimately withdrew funding for the dam project. That followed independent
expert assessments, which concluded that the dam project was not meeting the agreed
standards, including in relation to social and environmental impacts. The lesson drawn from
the Ilisu project was that export credit agencies needed to put in place due diligence
processes and project monitoring. 35 More recently, in at least one instance, a national
contact point has noted that an agency may not have fully used its leverage or engaged in
the proper level of human rights due diligence as required under the OECD Guidelines.36
44. Other human rights impacts that arise outside of a traditional project finance context
may relate to the nature of goods being exported in a global supply chain. For example, in
information and communications technology an exporter may sell goods to a customer
(State or non-State) that will use the equipment for surveillance, leading to adverse impacts
on a person’s right to life, to arbitrary detention, torture and potential violations of other
civil and political rights.37
45. Given the connection between export credits and finance linked to adverse human
rights impacts, are there requirements in place that businesses who receive support in the
form of export credit respect human rights, conduct due diligence and align their operations
with the Guiding Principles? The answer is mixed, with only a subset of public or publicly
supervised/funded export credit agencies currently requiring some form of human rights
due diligence, and then only for a subset of transactions, typically with a term of two years
or longer.
46. One of the largest gaps in terms of export credit and alignment with the Guiding
Principles is that many public export credit agencies have no explicit focus on human rights
due diligence as part of their operations, either for their own decision-making or as a
requirement for their clients.
47. The largest export credit membership organization is the Berne Union, which is a
network of private and public entities. Its 85 members include government-backed export
credit agencies, private credit and political risk insurers and multilateral institutions which
provide insurance products, guarantees and, in some cases, direct financing in support of
cross-border trade. 38 The insurance products its members provide offer protection for
exporting companies, investors and financial institutions against losses as a result of buyer
default.
48. At present, the Berne Union has no explicit mandate to address human rights or
social impacts as part of its activities, although its operating principles do refer to
34 See Export Credit Watch list of reports focusing on human rights concerns surrounding projects
financed by public export credit agencies, available from www.eca-watch.org/ecas/export-credit-
agencies; Amnesty International, “A history of neglect: UK export finance and human rights” (June
2013); Halifax Initiative and others, “Export credit agencies and human rights: failure to protect”
(2015).
35 See Michael M. Cernea, “Population displacement and export credit”, Brookings Institution (December 2011). See also Christine Eberlein and others, “The Ilisu dam in Turkey and the role of
export credit agencies and NGO networks”, Water Alternatives, vol. 3, No. 2 (June 2010).
36 See www.oecdguidelines.nl/latest/news/2016/11/30/final-statement-both-ends-associacao-forum-
suape-vs-atradius-dutch-state-business.
37 Institute for Human Rights and Business, “Telecommunications and human rights: an export credit
perspective” (February 2017).
38 See www.berneunion.org/Members.
sustainable growth, respect for the environment and operation with high ethical values.39
Within the Union, there is a committee of export credit agencies from emerging markets
known as the Prague Club Committee. The majority of members are from smaller markets
in Eastern and Central Europe, the Middle East, Central Asia and Africa.
49. In 2012, the United States and China agreed to discuss a set of new global guidelines
on export credits through a new international working group on export credits. The
International Working Group is led by China, Brazil, the United States and the European
Union as rotating chairs. It currently has 18 participants, including South Africa and the
Russian Federation. India is an observer in the process.40 Neither environmental nor social
impacts of export credit agency activities are currently on the agenda of the Working
Group.
50. Brazil, China, India, the Russian Federation and South Africa currently meet to
discuss export credit policies in the BRICS Forum.41 The principles of the Forum include a
commitment to supporting sustainable development, strong, balanced and inclusive growth,
financial stability, and a balanced combination of measures ensuring social and economic
development and protection of the environment, providing an opening for a discussion of
human rights. At present, the priority areas of cooperation do not include social risks or
human rights.
51. OECD is currently the main organization that has incorporated human rights into
export credit decision-making. The OECD Working Party on Export Credits and Credit
Guarantees (Export Credit Group) was established in 1963 to carry forward the work of
OECD on export credits, including working out common guiding principles, such as on
environmental and social issues. OECD has developed recommendations for export credit
agencies with respect to environmental and social due diligence, which are intended to
guide the work of the official export credit agencies of member States.
52. The Export Credit Group currently has 33 Members. Chile and Iceland do not
participate in the work of the Group as they do not have official support programmes in
place. Non-members such as Brazil, Romania and the Russian Federation regularly attend
Group events as invitees.42 There is a separate export credit arrangement, whereby a group
of OECD member and non-member States meet to develop common practices focusing on
price and terms of credit to ensure a level playing field.43
53. The Export Credits Group has negotiated several successive OECD instruments (the
Common Approaches) designed to provide a framework for export credit agencies when
addressing the potential environmental and social impacts of projects. The two most
relevant documents are the 2012 and 2016 revisions of the Common Approaches.44 In
undertaking work on environmental and social issues, the Group has been assisted, since
2004, by its practitioners’ group, consisting of the environmental and/or social experts from
export credit agencies who are responsible for undertaking due diligence and monitoring of
projects. The practitioners meet separately from the Export Credits Group several times a
year to discuss implementation of the Common Approaches.
54. The 2012 recommendation was the first instrument to mention human rights
reflecting the adoption of the Guiding Principles, which were referenced in its preamble,
asserting that “social impacts” encompassed relevant adverse project-related human rights
impacts and that such impacts included forced labour, child labour and life-threatening
39 See Berne Union value statement, available at www.sid.si/sites/www.sid.si/files/documents/splosni-
dokumenti/berne_union_value_statement_2004.pdf. Berne Union members discuss environmental
and social issues but have no publicly available guidelines or programmes.
40 See http://capexil.org/background-note-iwg-on-export-credit/.
41 See brics.itamaraty.gov.br/images/pdf/BRICSMOU.doc
42 Information provided by the OECD Export Credit Group secretariat.
43 The Participants Group is not an OECD body and does not, therefore report to the OECD Council, however it meets under the auspices of OECD with support from the OECD export credits secretariat.
44 See OECD Council recommendation on common approaches for officially supported export credits
and environmental and social due diligence, adopted by the Council in June 2012 and the revision
adopted in April 2016.
occupational health and safety situations. In the 2012 recommendation members were
asked to consider the issue of human rights, with the aim of reviewing how project-related
human rights impacts might be further addressed in future. There were, however, no
specific recommendations on human rights due diligence.
55. In 2016, the OECD Council approved a revised version of the Common Approaches.
In that document, there is an explicit statement to the effect that export credit agencies
should now screen all applications covered by the Common Approaches, according to
whether or not there might be a strong likelihood of severe project-related human rights
impacts occurring.45 Participating export credit agencies should then assess the potential
environmental and/or social risks in applications relating to all existing operations for
which their share is equal to or above SDR 10 million and all existing operations and
projects, irrespective of their share, where screening has identified a strong likelihood of
severe project-related human rights impacts occurring.
56. In screening an application, export credit agencies will then place the project into
category A, B or C, which imply a requirement for varying levels of environmental and
social review, including environmental and social impact assessments. In addition, where
screening has identified a strong likelihood of severe project-related human rights impacts
occurring, the environmental and social review of a project may need to be complemented
by specific human rights due diligence.
57. A footnote to the 2016 recommendation provides examples of severe project-related
impacts. For example, impacts that are particularly grave in nature (threats to life, child or
forced labour and human trafficking), widespread in scope (large-scale resettlement and
working conditions across a sector), cannot be remediated (torture, loss of health and
destruction of the land of indigenous peoples) or are related to the operating context of the
project in question (conflict and post-conflict situations).
58. Specific methods for human rights due diligence are left to the discretion of
individual export credit agencies. Moreover, the due diligence approach described above is
only applicable to applications covered by the Common Approaches and therefore excludes
transactions, such as short-term credit under two years, working capital, support for bonds
and transactions that may be considered outside the current definition of “project”, such as
mobile equipment (for example, ships) and communications equipment. The 2016
recommendation allows for projects backed by an export credit agency to be benchmarked
against the World Bank environmental and social safeguard policies or the International
Finance Corporation (IFC) Environmental and Social Performance Standards, depending on
the financial structure of the transactions. Some export credit agencies have decided to
benchmark all projects against the IFC Performance Standards, but again practice is
variable.
59. For export credit agencies, the OECD Guidelines should also serve as a key tool
alongside the Guiding Principles. The Guidelines state that the ownership structure of a
multinational enterprise (whether public or private) does not change their applicability. The
Guidelines, which incorporate a human rights chapter aligned with the Guiding Principles,
require export credit agencies, which are business entities themselves, to engage in
appropriate human rights due diligence with respect to their business relationships and to
the extent that they are representatives of the State or public entities, to use their leverage to
require their business partners and clients to do the same.
60. A recent decision by the Dutch National Contact Point clarifies the status of export
credit agencies. In June 2015, the national contact point system received a complaint
alleging that Dutch export credit agency, Atradius DSB had failed to comply with the
OECD Guidelines in the context of its financing of a dredging project in north-eastern
Brazil, which had resulted in severe human rights and environmental impacts. The
complaint against Atradius stated that it had failed to ensure that the Guiding Principles and
the IFC Performance Standards had been effectively applied to the project. In its initial
assessment, accepting the complaint of 3 December 2015, the Dutch National Contact Point
45 Para. 6.
found that Atradius qualified as a multinational enterprise under the Guidelines and
concluded that the specific instance merited further consideration.46
A. Examples of good practices among export credit agencies
61. The environmental and social practitioners group associated with the OECD Export
Credit Group include representatives of countries which are not OECD members, such as
Brazil, Kazakhstan, the Russian Federation and others. The fact that a wide range of
publicly-backed export credit agencies from both member and non-member OECD
countries take part in the meetings of the group is a positive step in terms of peer learning
and development of good practice. It appears, however that even within the OECD group,
export credit agencies are still in the early phases of developing good practice. It is
important for them to share their good practices more widely, as evolving public
expectations continue to shine a spotlight on the critical role they play in the business and
human rights arena.47
62. The Norwegian Export Credit Guarantee Agency was one of the first to incorporate
human rights due diligence into their screening procedures. The Agency indicates that its
environmental and human rights due diligence procedure is based on the OECD Common
Approaches and the Guiding Principles.48 Although the Agency uses the IFC Performance
Standards, it states that in order to address any potential gaps in practice, its due diligence
process will take into consideration all internationally recognized human rights in a manner
that is consistent with the Guiding Principles.49 The Agency is also unique in describing
how it understands and intends to use its leverage to advance respect for human rights in its
clients’ operations.
63. In the Netherlands, Atradius goes beyond the Common Approaches in conducting
human rights due diligence if there is a risk of severe human rights impacts in smaller or
shorter-term transactions. It recognizes that the most severe risks to stakeholders may occur
in any transaction, unrelated to the duration of cover, the amount of a transaction, or the
fact that the policy covers a mobile asset. Atradius was also the first export credit agency to
make public a gap analysis, in which it examined its policies and procedures against the
Guiding Principles.
64. The Swedish export credit system has developed specific policies and portals that
address human rights impacts in the telecommunications sector and make reference to
freedom online in documents providing them with annual appropriations. 50 Swedish
policies regarding telecommunications provide an interesting model because they focus on
a series of impacts that may not be captured by the IFC Performance Standards, which
focus on large-scale projects. The development of sector specific guidance is a welcome
addition to the export credit area.
65. Even within the OECD Export Credit Group, good practice is still emerging. As a
point of comparison, a number of export credit agencies require companies seeking export
finance support to make anti-bribery commitments. This includes non-OECD agencies that
are parties to the OECD Convention on Combating Bribery of Foreign Public Officials in
International Business Transactions and have taken this step to implement the relevant
recommendation.
46 Relevant documents are available from https://www.oecdwatch.org/cases/Case_365.
47 See Chair of the OECD working party on responsible business conduct, Roel Nieuwenkamp, on the
role of export credit agencies, available from www.permanentrepresentations.nl/
latest/news/2015/01/12/blog---evolving-expectations-the-role-of-export-credit-agencies-in-
promoting-and-exemplifying-responsible-business-practices.
48 Environmental and human rights policy, available from www.giek.no/responsible-business-
conduct/sustainability-article1796-1075.html.
49 Ibid. 50 Institute for Human Rights and Business, “Telecommunications and human rights: an export credit
perspective”.
66. According to an OECD study, 44 export credit agencies require exporters and/or
applicants to provide an undertaking/declaration that neither they nor anyone acting on their
behalf, such as agents, have been engaged in or will engage in bribery in the course of the
transaction. They include the Russian Federation, which exceeds standard expectations by
using multiple channels of communication regarding the requirement for an anti-bribery
undertaking/declaration. The Russian export credit agency obtains an
undertaking/declaration through both the application forms and stand-alone documents.
Brazil similarly uses stand-alone documents submitted by the exporter or applicant.
B. Gaps in the OECD Common Approaches
67. As noted above, a large number of non-OECD States do coordinate on export credit
policies but have yet to do so on social issues and human rights. Thus the 2016
recommendation on Common Approaches is currently the key document, which sets out
good practice for export credit agencies. As noted above, some non-OECD States take part
in meetings of the environmental and social practitioners, with an eye to aligning their
processes with the Common Approaches.
68. As the Common Approaches only apply to exports for medium- and long-term
export credits with a repayment term of two years or more, a variety of export credit
financing, insurance and guarantees provided by export credit agencies are not subject to
their application. As noted above, there are examples of export credit agencies applying the
Common Approaches and hence human rights due diligence across all their product lines,
as in the case of the Dutch, but this is still an exception. A key issue is therefore how to
extend the role of human rights due diligence across a broader spectrum of products and
services.
69. A second issue is which criteria are applied when human rights due diligence is
conducted. The Common Approaches default to the IFC Performance Standards, which are
not identical to the Guiding Principles. Again, as noted above, some export credit agencies
have supplemented their due diligence processes when they needed to address other human
rights scenarios, as was the case with Sweden in the telecommunications sector.
70. The Dutch National Contact Point indicated that for Atradius there needed to be a
clearer explanation of the gaps in alignment between the Guiding Principles and the
Common Approaches. For example, the scope of human rights due diligence is not limited
under the Guiding Principles, whereas the Common Approaches apply only to transactions
longer than two years.51
71. Another area where improvement is needed relates to the transparency of decision-
making at export credit agencies. Civil society groups have been critical of them because
they do not share the results of their screening with civil society, affected communities and
other stakeholders. A recent study of seven Central and Eastern European export credit
agencies, also pointed out that greater transparency was needed.52
72. The Common Approaches address the disclosure of information. They include
recommendations for public information disclosure as follows: (a) limited project
information, including environmental and social impact information, in the case of category
A projects, to be made available as early as possible in the review process and at least 30
calendar days before a final commitment to grant official support and (b) environmental
51 See Both Ends, “Gaps between the Common Approaches and the OECD Guidelines” (June 2016) and CORE Coalition and Amnesty International UK joint submission to the United Nations Working
Group on Business and Human Rights.
52 Finance and Trade Watch and CEE Bankwatch Network “ECAs Go to Market. A Critical Review of Transparency and Sustainability at Seven Export Credit Agencies in Central and Eastern Europe”
(December 2017).
and social information on projects classified in categories A and B at least annually after a
final commitment to provide support.53
73. In exceptional cases, the Common Approaches allow for the information for
category A projects, referred to in paragraph 71, not to be disclosed. In those cases, export
credit agencies are only required to report to the OECD Export Credit Group. As category
A and B projects cover only a small part of the total portfolio of projects supported by
export credit agencies, civil society groups have criticized the Common Approaches for
lack of transparency across product lines.
74. Based on the mediation which took place between Atradius and two civil society
groups before the Dutch national Contact Point, Atradius agreed to change its information
disclosure policy in order to be more transparent, as required under the Guiding Principles.
The final statement of the National Contact Point indicates that Atradius and the Ministry
of Finance agreed to develop a more specific information disclosure policy that starts from
the assumption that relevant information should be public, unless specific clearly defined
considerations bar such disclosure (as in the case of confidential business information).
Atradius agreed to improve the ex-post publication of information on all project categories
(A, B, C, M and E), for example by disclosing the nature of the product for each relevant
transaction. For category A projects, including transactions with a repayment period of less
than two years, an adequate summary of the transaction and the framework of the
assessment will be published.54
75. Because of the national contact point decision, Atradius took the step of crafting a
new environmental and social policy, effective in 2018, that will presumably, among other
changes, make more information public, with limited exceptions. It asked Shift, a non-
profit organization, to review its prior policies and procedures. The review explored the
extent of the alignment of its policies and processes with the Guiding Principles and what
changes would be needed to create greater alignment. The report done by Shift recognizes
that Atradius goes beyond some of those requirements in practice, but that the Guiding
Principles expect even more when it comes to transparency. The authors found that the
environmental and social policy framework of Atradius did not articulate a broad approach
that recognized the potential value to the business that greater transparency and
communication could play. As a result, public disclosure was positioned more as a burden,
where the company must meet very narrow and specific requirements, rather than as an
opportunity.55
C. Moving beyond the OECD export credit agencies
76. A larger issue is whether other forums can provide platforms for discussion of State
responsibilities with respect to environmental and social considerations, including human
rights. The OECD Common Approaches are evidence of the value of multilateral
harmonization to avoid a race-to-the-bottom approach to human rights and business.
However, while the Common Approaches are an important precedent, export financing is
no longer an activity carried out exclusively by OECD member States. As of 2013, 44 per
cent of global official export support came from export credit agencies outside OECD,
including Brazil, China, India and the Russian Federation. As a result, the BRICS Forum
could play an important role in aligning State duties under pillar I of the Guiding Principles
in the area of export credit. The Berne Union could provide another vehicle for such
dialogues, as could the International Working Group on Export Credits.
77. The European Union is yet another forum where export credit agencies could better
align their practices with the Guiding Principles. The European Union export credit agency
regulation refers to the obligation of member States to comply with the Union’s general
53 See OECD Council recommendation on common approaches for officially supported export credits
and environmental and social due diligence (2016), section VII.
54 See final statement notification Both ENDS- Fórum Suape vs Atradius DSB (30 November 2016). 55 See Shift, “Integrating human rights due diligence: a review of Atradius DSB’s environmental and
social policy and procedure”.
provisions on external action, such as consolidating democracy and respect for human
rights, when establishing, developing and implementing their national export credit systems
and when carrying out their supervision of officially supported export credit activities.56
D. Export credit agencies and access to remedy
78. Current National Action Plans do not include discussions of the ways in which
export credit agencies address and enable access to remedy by rights holders who are
harmed in connection with a project or transaction funded or supported by an export credit
agency. As a result, civil society groups have recommended that export credit agencies
make it easier for rights holders to know about and access relevant complaint
mechanisms.57 There are several possible options. One would be to have a grievance or
complaint mechanism at the export credit agency itself and a second would be to require
clients who receive export credit to have an effective grievance mechanism, as outlined in
Guiding Principle 31. Finally, export credit agencies should use their screening, assessment,
support and leverage roles to strengthen their client-level mechanisms and outcomes for
people.
79. In 2011, the Global Alliance of National Human Rights Institutions submitted
comments when OECD first revised its common approaches to address the Guiding
Principles. At that time, the Global Alliance called for OECD to include explicit
requirements regarding access to remedy for company-related human rights abuses,
including through the provision of grievance mechanisms at the project level and at the
national or export credit agency level that would be accessible to individuals and
communities affected by projects. 58 Although the 2016 revision of the Common
Approaches does request that export credit agencies consider measures to prevent,
minimize, mitigate or remedy potential adverse environmental and social impacts, it is
silent on the issue of complaints and grievance mechanisms. The issue of how export credit
agencies can use their leverage to enable effective remedies has not been actively explored
to date and deserves significant attention.
E. Relationship between the human rights record of a company and future
support by the State
80. The Common Approaches specify that export credit agencies “should where
appropriate … consider any statements or reports made publicly available by their National
Contact Points (NCPs) after a specific instance procedure under the OECD Guidelines for
Multinational Enterprises”.59 States that have committed to imposing trade and investment-
related consequences for businesses refusing to participate in the national contact point
process include Canada, Germany and the Netherlands.
81. For example, Canada has adopted an integrated approach to economic diplomacy as
part of its enhanced corporate responsibility strategy for the extractive sector, which was
launched in 2014. A key component of that approach is making government support in
foreign markets conditional on a company’s good faith participation in the two voluntary
dispute resolution mechanisms, namely the Office of the Extractive Sector Corporate Social
Responsibility Counsellor and Canada’s national contact point. In 2015, that approach led
to the withdrawal of Canadian trade commissioner services from China Gold International
56 Regulation 1233/2011 of the European Parliament and of the Council of 16 November 2011.
57 See Finance and Trade Watch, and CEE Bankwatch Network “ECAs Go to Market”. The authors
recommend that each export credit agency needs to have an independent complaints mechanism with
clearly defined procedures and that they formulate and adopt information disclosure and public
participation measures.
58 See www.business-humanrights.org/sites/default/files/media/documents/icc-submission-to-oecd-
export-credits-dec-2011.pdf.
59 OECD Council recommendation on common approaches (2016), para. 16.
Resources after it refused to engage with the National Contact Point when a complaint was
brought against it.60
82. The German National Action Plan also recognizes the need for linking the decisions
of the National Contact Point to support in trade promotion. It includes a proposed measure
that the National Contact Point be upgraded to a central complaints mechanism for projects
relating to foreign trade promotion. The Plan also created a link between business
participation in a specific instance procedure and the grant of export credit guarantees,
providing an additional incentive for a company to participate in mediation. The Dutch
National Contact Point has also committed to applying consequences to businesses that
refuse to participate in its process, a commitment that will be tested for the first time in an
ongoing case.
83. Three States (Germany, Switzerland and the United Kingdom) reference the linkage
between national contact point procedures and export finance in their National Action
Plans, although with a nuance regarding the outcome of the case versus good faith
engagement by the company in the process. For example, UK Export Finance will consider
any reports made publicly available by the National Contact Point in respect of the human
rights record of a company when considering a project for export credit.
84. While some export credit agencies, such as that of Japan, indicate that national
contact point reports (or other credible findings) will be factored into export credit
decisions, to date it is unclear how or when this has happened, apart from the one example
in Canada cited above. Other States should follow suit in terms of linking national contact
point and other remedial processes to whether a company continues to receive trade
support. In combating corruption, a company will often lose its right to participate in
government procurement exercises because of a determination that it was engaged in
bribery and a similar approach should be explored in relation to human rights-related
complaints.
IV. Import and export restrictions to prevent trade in goods with links to human rights abuses
85. States are using restrictions on exports and imports as a means of ensuring greater
corporate respect for human rights. This takes the form of export/import restrictions on
certain types of goods that are linked to human rights violations in global supply chains.
86. One example is the Alliance for Torture-Free Trade, an initiative of Argentina, the
European Union and Mongolia bringing together countries from around the world. Its aim
is to end the trade in goods used to carry out the death penalty and torture. The countries of
the Alliance commit themselves to taking measures to control and restrict exports of such
products.
87. The European Union has drafted a regulation that will add certain cybersurveillance
tools to the list of goods and technologies that need to be approved prior to export. The
draft regulation introduces the new concept of “human security” to export controls, to
prevent the human rights violations associated with certain cybersurveillance technologies.
The proposal mirrors amendments to the German Foreign Trade and Payments Ordinance
in 2015, which made companies that sell surveillance products subject to new mandatory
export licence requirements to prevent misuse of surveillance technologies for internal
repression.61
88. In 2016, via the Trade Facilitation and Trade Enforcement Act, the United States
Congress closed a loophole in section 307 of the Tariff Act of 1930, which barred products
made by convict, forced or indentured labour. Until now, the law has exempted goods
60 See OECD Watch, “Remedy remains rare: an analysis of 15 years of NCP cases and their
contribution to improve access to remedy for victims of corporate misconduct”, p. 46.
61 See European Parliamentary Research Service briefing, available at www.europarl.europa.eu/
RegData/etudes/BRIE/2016/589832/EPRS_BRI%282016%29589832_EN.pdf.
derived from slavery if American domestic production could not meet demand. Section 307
prohibits the importation of merchandise mined, produced or manufactured, wholly or in
part, in any foreign country by forced or indentured child labour.62
89. Since 2016, U.S. Customs and Border Protection has issued four orders to seize 50
shipments of goods suspected to have been made with forced labour. There were no
seizures between 2001 and 2015. On 2 August 2017, Congress passed the Countering
Americas Adversaries through Sanctions Act, which contains a provision affecting the
entry of merchandise with a nexus to forced labour by North Korean nationals. Since then,
there have been 15 seizures of merchandise believed to have been made using North
Korean forced labour.63
90. There are other examples of States linking import and export licensing and customs
clearance to human rights issues. Trade in conflict minerals, illegal logging and conflict
timber, and endangered species are other areas where States have acted to restrict the flow
of goods that are associated with higher risks of human rights abuses. 64 Companies
involved with global supply chains in relevant sectors must engage in human rights due
diligence and impact assessments to comply with import and export restrictions. As such,
the use of export and import controls is another useful tool that allows States to implement
their duty to protect under pillar I of the Guiding Principles.
V. Conclusions and recommendations
A. Conclusions
91. Many States have established export and trade promotion services as part of
their economic development strategies to promote export-driven growth. At the same
time, trade and exports and imports of goods in global supply chains can have
significant adverse human rights impacts.
92. Guiding Principle 4 of the Guiding Principles on Business and Human Rights
reminds States that their duty to protect rights holders from corporate human rights
abuses includes a responsibility to condition public support for trade and investment
promotion, such as export credits, on corporate respect for human rights. In addition
to export credits, there are a range of additional services that States provide to
companies that desire to export, including participation in trade missions, trade
advocacy, general guidance on exporting into foreign markets, embassy services in
overseas markets, and training and other resources.
93. To date, very little has been done in terms of States fulfilling their obligation
under Guiding Principle 4. One area where progress is being made is with respect to
the training of trade and embassy personnel on the Guiding Principles. Some States
are also providing toolkits and guidance to help businesses address human rights due
diligence in their cross-border trade.
94. There remains much to be done in terms of States aligning their trade
promotion with the Guiding Principles and promoting a race to the top. States have
done more in the way of tying trade support to commitments from businesses not to
engage in bribery and to act with integrity. Where States already screen companies
for trade promotion or require an integrity or no-bribery pledge, such commitments
should be expanded to encompass a commitment to respect human rights.
95. In the area of export credits, with the exception of a few OECD-based export
credit agencies, most State-supported or public export credit agencies currently
appear not to be actively using the Guiding Principles as part of their decision-making
62 See, for example, www.cbp.gov/trade/trade-community/programs-outreach/convict-importations.
63 See www.cbp.gov/newsroom/blogs/tftea-two-years-and-counting.
64 See Oli Brown and others, eds., Trade, Aid and Security: an Agenda for Peace and Development
(London, Earthscan, 2007).
on whether to extend financial support for export activities. The updated 2016 OECD
recommendation on common approaches to export credit includes a requirement for
export credit agencies to require applicants to undertake some form of human right
due diligence with respect to projects that pose severe human rights risks.
96. While this is a positive step, to date, there are still only limited examples of
good practice even among the States which are members of the OECD Export Credit
Group. Furthermore, as noted in the present report, the Common Approaches still
have limitations in terms of the transactions to which they apply and the fact that they
leave questions over transactions that are not covered, as well as issues of access to
remedy and information disclosure. Furthermore, the OECD Export Credit Group
represents only a subset of the larger set of global export credit agencies.
97. As the report indicates, there is room for reform in the export credit area as
part of State commitments under Guiding Principle 4. While States may commit to
factoring reports from national contact points and other types of determinations into
export credit agency decision-making, at present there is scant evidence that States
have refused to grant trade or export credit support to applicants because of an
adverse human rights determination.
98. Finally, export and import controls and restrictions seem to be a promising
avenue for States to cause businesses that engage in cross-border trade to engage in
stronger human rights due diligence — either as buyers or sellers. In the event that
States take active measures to prevent goods such as those made with forced labour
from entering markets, this does provide a strong incentive for businesses to focus on
the Guiding Principles and human rights due diligence.
B. Recommendations
99. States should require businesses to demonstrate an awareness of and
commitment to the Guiding Principles as a prerequisite for receiving State support
and benefits relating to trade and export promotion. States should condition
participation in trade missions, eligibility for trade advocacy and generalized export
assistance on such commitments. Such forums and tools should be used to raise
awareness of business-related human rights risks in the relevant contexts, with a
particular emphasis on the risks faced by vulnerable groups and individuals. The
situation for human rights defenders and trade unions should serve as a concrete
benchmark.
100. States should look to see where they have required businesses to make existing
integrity and anti-corruption pledges in the context of trade promotion and expand
such commitments to include a commitment to respect for human rights and an
alignment of business activities with the Guiding Principles.
101. States should examine how and when they have withdrawn trade or other
government support from companies in the event that they are found to have engaged
in foreign bribery or corruption, and determine how a similar withdrawal of support
could be structured in the event that businesses have been found to have caused or
contributed or been directly linked to adverse human right impacts.
102. States should also examine how to use withdrawal of trade support more
actively, so as to create incentives for companies to respect human rights and engage
in human rights due diligence and legitimate remediation processes. To the extent that
companies know that there is a risk of losing export financing and other benefits, that
may promote greater compliance with the Guiding Principles.
103. In terms of export credit, States and their export credit agencies should ensure
that their practices are aligned with the Guiding Principles, not just the IFC
Performance Standards. For participants in the OECD Export Credit Group, States
are encouraged to look beyond the four corners of the OECD Common Approaches,
to see how better to align export credit activity with the Guiding Principles. That is
particularly true for transactions that fall outside the scope of the Common
Approaches (for example, short-term transactions, working capital or support for
bonds). Similarly, export credit agencies should develop useful models of human
rights screening and due diligence that relate to transactions that may not clearly fall
under the current definition of “project” (for example, the sale of mobile equipment
such as ships or communications equipment).
104. States should consider using many of the multilateral forums that exist for
export credit agencies to engage in developing good practices and further
commitments relating to the Guiding Principles. Such forums include the Berne
Union, the International Working Group on Export Credits, the European Union and
the BRICS Export Credit Forum.
105. Export credit agencies should focus much more on the issue of enabling access
to remedy. That includes developing better practices for evaluating, supporting and
incentivizing the quality of the grievance mechanisms of their clients/applicants at the
operational level. At the same time, export credit agencies also need to ensure that
they have effective complaints mechanisms and that such mechanisms are readily
accessible by affected parties, rights holders and communities. That is an area where
the OECD Common Approaches are silent.
106. Export credit agencies should review their current transparency and disclosure
policies and consider revising them to make more information public. Following the
example of the Netherlands, export credit agencies can begin from a presumption that
material is made public and then carve out narrow exemptions. There may also be a
way to present some data in aggregate form or to redact confidential information but
still provide civil society with key facts about both successful applications and those
turned down by an export credit agency.
107. States are encouraged to further develop innovative measures to prevent trade
in goods that are connected to serious human rights risk in global supply chains.
108. While the present recommendations are focused primarily on States, civil
society groups are encouraged to continue their advocacy around issues of human
rights, export credits and trade promotion, and to seek greater alignment of State
policies and regulations with the Guiding Principles. Similarly, businesses are
encouraged to work in partnership with trade promotion entities to develop and
disseminate effective guidance on how business respect for human rights can be
demonstrated in cross-border trade.