IFC, U.N. to cooperate on study of investment contracts and human rights

The International Finance Corp. (IFC), which is a member of the World Bank Group, and Kennedy School of Government (KSG) Professor John Ruggie, who is the United Nations secretary-general’s special representative on business and human rights, recently launched a joint study on foreign direct investments and human rights.

This study aims to examine the relationship between the protection of investor rights and the human rights obligations of the host states. Some contracts between investors and host governments include clauses that either freeze the laws that apply to the investor or allocate compensation for the costs incurred by the investor to comply with new laws. The study will look at the potential impact of these clauses on the host states’ ability to adopt and implement new human rights laws in areas such as labor, protection of the environment, and the provision of essential public services such as water.

The research will be published by IFC in early 2008. It will inform recommendations by Ruggie, who is the Evron and Jeane Kirkpatrick Professor of International Affairs at KSG, in his next report to the U.N. Human Rights Council due in spring 2008.