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Seven leading international banks, informally grouped together as the ‘Thun Group of Banks', last week presented a discussion paper for banks on the implementation of the UN Guiding Principles on Business and Human Rights.
BankTrack welcomes the
discussion paper as a significant step towards recognising the relevance
of human rights to banks' core business, but regrets that the Thun
Group has not addressed all relevant areas of the UN Guiding Principles.
As such, it calls on the banking sector to finally recognise its
responsibility to provide adequate complaint and remedy mechanisms to
people suffering human rights abuses as a result of bank-financed
This discussion paper from the Thun Group - which now includes Barclays, BBVA, Credit Suisse, ING Bank, RBS Group, UBS AG and UniCredit - is the result of two years of deliberations, and follows the universal adoption of the UN Guiding Principles by the Human Rights Council in 2011.
The paper significantly recognizes that the UN Guiding Principles apply to all parts of a bank's business, including asset management and personal banking as well as corporate and investment banking. It also makes an important contribution as a guide to the banking sector for operationalizing the UN Principles, elaborating on policy and governance frameworks for banks, and providing guidance on the scope and content of due diligence procedures for different financial services.
Andreas Missbach of the Swiss NGO Berne Declaration, which launched the banksandhumanrights.ch website in 2010 to lobby Swiss banks to improve their human rights policy and practice, said: "We welcome the fact that the banks for the first time recognize the relevance of human rights in their core business, and are therefore discussing the necessary adjustments to their due diligence processes. It is now crucial that this discussion document translates into real implementation, with transparent reporting on progress."
Access to remedy missing
However, the paper is disappointingly limited in its scope, focusing only on Principles 16-21 as "those which are most relevant to banks' potential adverse impacts on human rights and tend to be most challenging to implement". No explanation is given as to why the paper omits principles clearly directed towards businesses, including those in section 3 of the Principles, ‘Access to Remedy'. The paper ignores principles calling on companies (including banks) to "establish or participate in effective operational-level grievance mechanisms for individuals and communities who may be adversely impacted", and to "provide for or cooperate in" remediation where they have caused or contributed to human rights abuses (Principles 22 and 29).
"The discussion of financial institution responsibility to respect human rights is a welcome and necessary development. However, the discussion is empty without inclusion of the responsibility to ensure access to remedy," said Komala Ramachandra at Accountability Counsel, which assists communities around the world to defend their environmental and human rights. "Transparent, effective, and legitimate avenues for addressing and remediating human rights violations, are critical to building a meaningful system to avoid and address risks discussed in the paper,"
"BankTrack has long called for banks to establish mechanisms that would allow rights holders whose rights are violated by bank clients or bank financed projects access to remedy with the banks themselves", said Johan Frijns, BankTrack coordinator. "The Thun group seems to have deliberately left this crucial part of the human rights obligations of banks out of the discussion paper, a huge missed chance to assist banks in moving forward on this long neglected obligation."
In December 2013, BankTrack expanded on its criticisms of the Thun Group discussion paper in a more detailed response paper, here.
Notes for editors
The full text of the UN Guiding Principles is available here. BankTrack's submission on the drafting of the Principles, "Human Rights responsibilities of private sector banks", is here.
See page 5 of the Thun Group Discussion Paper