The Legal Obligations With Respect to Human Rights and Export Credit Agencies - June 23, 2006

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Prepared by Özgür Can and Sara Seck, for the ECA-Watch, Halifax Initiative Coalition and ESCR-Net

International human rights law has traditionally focused on establishing the obligations owed by states to individuals. Much recent attention has been given to the question of whether non-state actors, such as transnational corporations, can be considered subjects of international law and as such duty bearers of international human rights obligations. However, less attention has been given to the equally significant question of whether financiers of transnational corporate activities have an obligation to ensure that the activities they support comply with international human rights norms. This paper will explore the international human rights obligations of one type of financial institution: officially supported export credit and investment insurance agencies (Export Credit Agencies or ECAs). ECAs are primarily public or publicly mandated institutions that support and subsidise national trade and investment activities, particularly in developing and emerging markets.

The need to focus attention on ECAs and human rights is underscored by the significant contribution that ECAs make to international trade and investment flows. The capital that industrial country ECAs provide to exporters and investors eclipses the contribution of overseas development agencies, other bilateral agencies and multilateral organisations. Indeed, ECAs have been described as the 'unsung giants of international trade and finance.' Significantly, the recent Interim Report of the Special Representative of the Secretary-General on the issue of human rights and transnational corporations and other business enterprises singled out home countries providing investment guarantees and export credits for frequently not taking adequate regard for the human rights practices of the companies receiving the benefits.

The structure of this paper is as follows. Part I will provide an overview of ECAs and how these activities impact human rights. Part II will outline the legal nexus between ECAs and states and explore the international law of state responsibility as applied to ECAs. This section concludes that ECAs, as organs or agents of the state, must comply with the international obligations of the state. Part III will turn to the question of state responsibility. Specifically, Part III will explore the content of international human rights law applicable to ECAs including whether the obligations engaged are subject to any extraterritorial limitations. Finally, Part IV will explore the legal implications of the conclusion that ECAs are under a legal obligation to ensure that the activities they support comply with international human rights norms.