human rights & business (and a few other things)

The cooptation of BHR: the looming threat of ‘CSR capture’

This blog post was authored by Prof. Dr. Florian Wettstein – Universität St.Gallen (HSG) |, who was the keynote speaker at the Symposium: Colonisation in, of and through Business and Human Rights, held in April 2023 in Tilburg (the Netherlands). It is part of a Blog Series published on Rights as Usual.


Corporate social responsibility (CSR) has become an essential part of doing business. There is hardly any large company that does not publish a report on its responsibility and sustainability efforts, that does not have staff or even a department dedicated to CSR, that does not showcase its various responsibility projects and initiatives on its website. While some applaud such efforts, others have warned early on that their deeper aim has never been to transform, but rather to legitimize the neoliberal agenda. They have compared CSR to a ’trojan horse’, that is, an instrument for corporate capture, rather than for corporate change. Such ‘CSR capture’ poses a threat also to the critical potential of the business and human rights (BHR) agenda. How this plays out in practice can be illustrated with the example of companies’ opposition against mandatory BHR laws.

Of course, corporations opposing – sometimes vehemently – new restrictive regulation is not a new phenomenon. They have spent staggering amounts to lobby law makers to design regulatory instruments in their favor and they exert influence at all stages of the process in the lead up and enactment of such regulation. Hence, the mere fact that corporations similarly tend to reject new human rights due diligence (HRDD) legislation both in various domestic jurisdictions as well as at the level of the EU, is not surprising and it fits the usual pattern.

Nevertheless, there seems to be a new feature characterizing the opposition specifically against such new HRDD laws. While commonly the resistance against new regulations tends to invoke what can be called ‘efficiency-based’ arguments, companies seem to have shifted towards ‘responsibility-based’ argumentation in their struggle against BHR legislation. The former set of arguments claims that new social or environmental regulation hampers corporations’ efficiency and thus leads to reduced profitability. Often such arguments are connected, implicitly or explicitly, to a so-called ‘exit threat’, i.e. corporations threatening that they may move their operations elsewhere. This puts pressure on governments to abandon their plans for tighter regulations if they want to remain competitive as an attractive location for lucrative businesses.

Such arguments abound also in the public discussions around mandatory HRDD laws, but there is an increasingly prominent focus on the latter, responsibility-based, set of arguments in this context. Responsibility-based arguments do not emphasize the economic, but the social impact of such regulation, claiming that such laws would undermine the responsibility that companies are already adopting through their voluntary CSR efforts. One argument is that the potential liability risk attached to such legislation would prevent them from continuing their long-existent engagement with affected communities on the ground and thus be counter-productive when it comes to enhancing the position of local stakeholders. In other words: BHR laws are claimed to lead to less, rather than more responsibility.

Accordingly, companies’ position against such laws is increasingly voiced by a group of company representatives whom one would not intuitively associate with a position against BHR regulation: CSR managers. Thus, the very same people who welcomed the UN Guiding Principles on Business and Human Rights (UNGPs) and were at the forefront of implementing them early on are now taking a stance against mandating those very same provisions they earlier voiced support for. What may seem counter-intuitive at first glance, follows a certain logic at a closer look.

When the UNGPs were published in 2011, early implementation efforts by companies leveraged largely on existing CSR structures and resources. This domestication of BHR in and through the existing CSR organization facilitated the reframing of BHR along CSR lines – and it has turned CSR managers into the ‘gate-keepers’ of this newly framed BHR agenda in business practice. The conventional CSR perspective views corporate responsibility essentially as private responsibility, which companies adopt on a voluntary basis at their own discretion. It is corporate-centric, apolitical, and tends to be driven by instrumental considerations. Legal mandates and government involvement do not fit this conventional CSR agenda neatly. In fact, CSR is commonly seen precisely to address the realm beyond such mandates. Thus, the opposition against BHR legislation is not counter to but in line with a conventional CSR mindset. And because BHR has been reframed in the categories of such conventional CSR, such legislation can essentially be portrayed as running counter the BHR agenda itself. Thus, the BHR agenda has successfully been turned against itself.

This is not to say that the new mandatory HRDD laws are the silver bullet to advance the BHR agenda and that companies ought to accept any such proposition without any reservations. However, rather than rejecting them across the board, corporate responsibility would require companies to engage with them in sincere and constructive ways. If the design of current legislative proposals distracts from practical engagement on the ground, the response should be to include stakeholder engagement and the inclusion of marginal voices a requirement both in the process of designing such laws as well as in the actual mandate of such laws. After all, this is a demand that also BHR advocates have voiced repeatedly and thus where business support could secure real improvements of existing proposals and laws. In other words, the answer would be to advocate for stronger mandates, rather than to lobby against weak ones. The UNGPs ask governments to enact a ‘smart mix’ of voluntary and mandatory measures to give practical meaning to the BHR agenda. Corporations who have endorsed the UNGPs early on must play a constructive role not only when it comes to showcasing voluntary efforts, but also in advancing the mandatory part of the deal.

Blog Series: Colonisation in, of and through Business and Human Rights

This blog post was authored by Dr Dalia Palombo – Tilburg University.

The day I finally sent the last version of my article Transnational Business and Human Rights Litigation: An Imperialist Project? | Human Rights Law Review | Oxford Academic ( to the Human Rights Law Review, I wanted to forget about anything related to human rights and imperialism for a while. Thus, I turned to my post-submission period reading list, filled with interesting articles I did not have the opportunity to read during the writing process. The first article that sparked my attention was Betting on the Wrong (Trojan) Horse: CSR and the Implementation of the UN Guiding Principles on Business and Human Rights | Business and Human Rights Journal | Cambridge Core by Florian Wettstein. I started reading it and shivered when I realised the article analyses “[..t]he colonization of CSR by neoliberal free market ideology”. Not only could I not help ending up again on the topic of colonisation and business and human rights, but the illuminating article also reminded me that, as much as I spent countless hours analysing imperialism in business and human rights, there was a very different way to understand the topic. It could also be approached from the economic corporate capture, rather than legal transnationality, perspective. I felt that the interdisciplinarity of the topic deserved further investigation.

Thus, when I joined the Netherlands Network of Human Rights Research as a coordinator of the Business and Human Rights Working Group, I discussed the idea with my colleagues, dr. C (Chiara) Macchi – WUR , Jindan-Karena Mann | University of Amsterdam –, and TI (Tamara) Horbachevska – WUR, and it became clear my interest was not isolated. Thanks to funding from the Netherlands Network for Human Rights Research and the Department of Public Law and Governance (PLG) | Tilburg University, we were able to launch a call for abstracts for a symposium. The volume and quality of the abstracts received, as well as the widespread participation in the actual Symposium: Colonisation in, of and through Business & Human Rights | Tilburg University, were impressive. At the end of this long journey, we felt the need to continue our collaboration on the subject. In cooperation with N (Nadia) Bernaz PhD – WUR, we are now launching the Blog series Colonisation in, of and through Business and Human Rights on Rights as Usual | human rights & business (and a few other things). The series will run for a few months, publishing 2-3 blog posts per month. To kick off the series, we have three blog posts from Florian Wettstein (keynote speaker), Nazrin Huseinzade (symposium speaker) and myself.

The EU Parliament Position on the CSDDD : Towards Requiring Meaningful Stakeholder Engagement?

Plenary session at the European Parliament in BrusselsIt is a pleasure to welcome  Dr Caroline Omari Lichuma on Rights as Usual (; @Carollichuma on Twitter).  Caroline is a Postdoctoral Researcher at the University of Luxembourg . She received her LLB from the University of Nairobi, her LLM from New York University and her PhD from the Georg-August University of Göttingen. Her current research is in the broad area of Business and Human Rights with a focus on national, regional and international efforts to increase corporate accountability for human rights and environmental abuses. She is particularly interested in the intersection between Third World Approaches to International Law (TWAIL) and BHR. This post is hers.



 On the 1st of June 2023, the EU Parliament finally adopted its long-awaited position on the EU Corporate Sustainability Due Diligence Directive (CSDDD) with 366 votes in favour, 225 against and 38 abstentions. The legislative drafting process now proceeds to the trilogues, where attempts will be made to reconcile the Parliament’s position with that of the EU Commission and the EU Council in order to arrive at a final text of the directive.

The question of meaningful stakeholder engagement in the EU CSDDD has (pre)occupied scholars and civil society since the EU Commission released its draft in February 2022. This continued even after the Council’s draft in December 2022. Critics have argued that contrary to international standards contained within the United Nations Guiding Principles on Business and Human Rights (UNGPs) as well as the OECD Guidelines for Multinational Enterprises (OECD Guidelines), the commission’s proposal lacks a systematic approach to stakeholder engagement across the Human Rights Due Diligence (HRDD) process. In addition, concerns were raised about the “where relevant” formulation found in Articles 6 and 8 of the draft directive, requiring covered companies to engage with stakeholders only where relevant. Adding on to these concerns, I have elsewhere argued that a comparison of the Commission and Council positions reveals that not enough has been done in both these drafts to create the necessary architecture for meaningful stakeholder engagement in reality, given the wide discretion granted to in-scope companies. Relatedly, using a Third World Approaches to International Law (TWAIL) lens, I have previously illustrated how the EU CSDDD contributes to participatory injustice given its failure to include global south rightsholders in the processes of HRDD law making and implementation. This has serious implications for the creation and entrenching of a European epistemic and interpretive hegemony in BHR that does not do enough to ‘center the unique cultural, historical, and political experiences as well as lived realities of rightsholders from the Global South.’

The EU Parliament’s Position: Taking Critics Seriously?

Looking at the amendments proposed in the Parliament draft allows for some cautious optimism in as far as the progress towards meaningful stakeholder engagement is concerned. Amendment 34 sets the stage by introducing into the text of recital 27 a requirement that covered companies must engage with affected stakeholders throughout the due diligence process. Amendment 60 provides more detail by introducing a new recital 44c focusing on ongoing meaningful engagement. One notable development present in Parliament’s draft is the category of affected stakeholders. Covered companies are required to engage in genuine dialogue with these stakeholders and/or other relevant stakeholders such as civil society or human rights and environmental defenders where necessary. Stakeholders are to be given access to information with reasons for any refusal, and affected stakeholders must be protected from retaliation and retribution including by maintaining confidentiality and anonymity. Particularly welcome are attempts to inject policy coherence into the process of meaningful stakeholder engagement by aligning it with existing EU legislation applicable to rights to information, consultation, and participation.

As regards the operative provisions of the draft directive, a number of amendments are relevant. Amendment 121 introduces the category of affected stakeholders into the definitions laid out in Article 3(1)(n). Affected stakeholders are conceived of as ‘individuals, groups or communities that have rights or legitimate interests that are affected or could be affected by the adverse impacts stemming from a company’s activities or actions or the activities or actions of entities in its value chain.’ The legitimate representatives of such stakeholders are also granted standing. Additionally, adopting a formulation introduced in the Lara Wolter’s draft, the Parliament draft proposes amendment 122 creating a new Article 3 (1) (na) recognizing vulnerable rightsholders. These are affected stakeholders whose situations are compounded by marginalization due to intersecting factors such as ‘sex, gender, age, race, ethnicity, class, caste, education, indigenous peoples, migration status, disability as well as social and economic status.’

The most important amendment on stakeholder engagement proposed in the Parliament draft is amendment 206 which introduces a new Article 8 (d) titled ‘carrying out meaningful engagement with affected stakeholders.’ The provision is significant for a number of reasons. First, it requires engagement to be ‘comprehensive, structural, effective, timely and culturally and gender sensitive.’ In addition, it stresses the possibility of meaningful engagement involving legitimate representatives of affected rightsholders where it is not possible to engage the latter. Notably, in order to redress the information asymmetry that is emblematic of the relationship between companies and stakeholders, covered companies are required to provide ‘comprehensive, targeted and relevant information to affected stakeholders.’ Furthermore, affected rightsholders are allowed to request companies for additional information, and where such a request is refused written justifications must be given. Companies are expected to set up an appropriate framework for consulting affected stakeholders that ensures meaningful engagement throughout the due diligence process as set out in Articles 5-10 of the EU CSDDD. Special mention is made of company workers and their representatives, who must be kept informed of the company due diligence policy and engaged with throughout the implementation process. Finally, companies are required to identify and address barriers to engagement and ensure that participants are not subject to retaliation or retribution. The needs of vulnerable stakeholders must be given particular attention. Crucially, amendment 154 removes the ‘where relevant’ formulation and requires companies to carry out meaningful engagement in accordance with Article 8 (d).

What Next? A Call for Pragmatic Optimism

It is clear that the Parliament draft has laid  down the legal scaffolding necessary for building an effective meaningful engagement architecture within the CSDDD. Compared to the Commission and Council drafts, the Parliament draft has arguably, and to a large extent, incorporated the concerns of critics of these earlier versions. Nonetheless, this contribution calls for the optimism with which these developments are likely to be received to be tempered with a healthy dose of pragmatism for three reasons.

Firstly, the nature of the trilogue process means that a number of tripartite meetings between Parliament, the Commission and the Council will now follow. Only at the end of this process  will it be clear what version of stakeholder engagement will be captured within the final legislative text. Thus, the final text could either be stronger or weaker than the Parliament draft in this regard. Only time will tell.

Secondly, whereas the provisions in the new article 8 (d) are promising, it is not entirely clear if these provisions grant an enforceable right to stakeholders who are dissatisfied with how the company structures and carries out its meaningful engagement obligations. Will such stakeholders be able to raise a challenge against the company either through judicial or administrative proceedings – for instance within the context of the national supervisory mechanisms to be set up in each national jurisdiction? Legal rights are meaningless unless they are capable of being translated into reality. It remains to be seen whether and how affected stakeholders will actually be able to hold companies to account for any failures in their discharge of these meaningful engagement obligations.

Thirdly, as scholars such as Surya Deva and Debadatta Bose have cautioned, we must temper the enthusiasm with which we regard the move towards enhancing corporate accountability for violations of human rights and the environment through HRDD laws such as the EU CSDDD. These laws may promise more than they are able to deliver in reality, given the structural problems that characterize the global order, such as the massive asymmetries that exist between affected stakeholders and powerful Multi-national companies (MNCs) in terms of inter alia, access to resources, power and influence, and information.

HRDD laws are unable (and maybe even unwilling) to confront the material conditions of a post-colonial and neo-liberal international order that have allowed errant MNCs to be what they are today. Ultimately, even if Parliament’s version of the EU CSDDD is successful as regards the meaningful engagement provisions, this will be akin to treating only one small symptom while doing nothing to stop the disease.

The EC’s draft ban on products made using forced labour: Key measures to guarantee remediation for victims


I am very pleased to host two blog pieces which reflect on the 10 years which have passed since Rana Plaza as well as offering thoughts as to the way forward. The first one, by Rubana Huq was posted here. The second one, by Claire Methven O’Brien and Amy Weatherburn focus on the remedy gap in the Draft Regulation proposed by the EC.

These blog pieces were commissioned and edited by Sandhya Drew and Felogene Anumo for the Blog of the Business and Human Rights Journal but an IT blip on the CUP website is delaying publication, and so I have seized this opportunity. These pieces will be crossposted by the BHRJ Blog too at a later date.


Claire Methven O’Brien and Amy Weatherburn


 In 2022, the European Commission (EC) proposed a new Regulation to ban products made using forced labour from the EU market.  In this post, we highlight the absence of provisions in the draft Regulation to guarantee remedies for victims, and put forward five remediation measures that could be introduced to address this gap.

The EC’s proposed ban on products made using forced labour in outline

The EC’s proposal seeks to prevent goods made with forced labour from circulating on the EU market. The draft Regulation would hence empower Member State authorities, where there are indicators of forced labour in the supply chain, to investigate products and businesses (Articles 4-5) and conduct checks and inspections inside as well as outside the European Economic Area. Where forced labour is implicated in their production, goods can be withheld or disposed of (Article 6) and penalties imposed for non-compliance (Article 30). Additional EU-level measures aim to promote the law’s effectiveness. These include an EU database of forced labour risk areas and products to supply data to guide investigations and checks (Article 11) and guidance (Article 23). In terms of checks and balances, enforcement action against businesses is to be subject to review and appeal before national courts.

Remedies for forced labour victims in the draft EU Regulation: a crucial omission

Despite its prohibition in international law and its designation as one of the five fundamental principles and rights at work, forced labour is on the rise globally, with 28 million victims worldwide, 86 % in the private sector and most women. Human rights standards, including those binding on the EU, demand that individuals who fall victim to forced labour must be remediated. Remedies must be sufficient and certain in practice and context-specific, with reference to victims’ individual circumstances. While these rules generally relate to forced labour occurring within a state’s jurisdiction, the UN Guiding Principles on Business and Human Rights (UNGPs) and Council of Europe standards affirm the need for ensure remedy also in cross-border and value chain settings.

It is striking, then, that the EC’s proposed Regulation omits measures that would secure remedies for victims of forced labour. As is well-known, victims of forced labour face extreme difficulties in securing remediation, facing obstacles such as trauma, precarity, resource constraints, language barriers, lack of rights awareness and risks of reprisals. As remarked also by stakeholders, this lack of remedy perpetuates injustice, undermines the rule of law, exacerbates risks of re-victimisation and hence stands to frustrate the policy goals of the draft Regulation as well as broader EU and international human rights and sustainable development objectives.

Fixing the EU Regulation’s remedy gap: A package of proposals

The European Parliament is currently developing its position on the EC’s draft forced labour Regulation. There is therefore still time and opportunity to fix the failure of the EC’s draft to advance remedy for forced labour victims. As we analysed in our recently presented Briefing for the European Parliament, this goal might be promoted through the following mechanisms.

First, the Regulation should explicitly affirm the goal of preventing and remediating harm for victims. What after all is the point of EU legislation in this area, if not redressing the affront to human dignity and significant harm to human beings inflicted via exploitative labour practices?

Second, the draft Regulation should require economic operators to provide evidence of remediation as a condition of having bans or restrictions lifted. Such evidence could relate to, for example, financial and non-financial compensation; restitutionary measures; formal apologies or future-oriented preventative measures or guarantees of non-recurrence.

Third, the proposed EU Regulation could direct fines and administrative penalties into a trust fund for victims. This could then be drawn on to secure remediation in cases where perpetrators cannot be identified or fines enforced, well known obstacles to recuperating compensation where it has been awarded. Such a fund could draw lessons from and coordinate with existing initiatives, such as the UN Voluntary Trust Fund on Contemporary Forms of Slavery and Alliance 8.7.

Fourth, the foreseen Union Network Against Forced Labour Products (Article 24) should be leveraged to involve stakeholders in identifying cases of forced labour as well as monitoring and following up on the implementation of remediation. The network could also facilitate stakeholders in the process of evidence gathering for investigations as this can be a burdensome task for organisations with limited resources given the covert character of forced labour practices, and can dissuade them from pursuing legal action that would hold businesses accountable for forced labour practices. Given the latter, competent authorities should also have a duty to identify and inform potential victims, or their representatives, of the right to remediation in the course of investigations or remedial action.

Fifth, the Regulation should be articulated with other controls on market access. EU public procurement law already provides for exclusions from eligibility to bid for public contracts based on corporate misconduct and corruption and multi-lateral development banks operate a scheme of cross-debarment on a similar basis. Adverse determinations against businesses under the new EU Regulation should activate these or similar exclusions with the possibility, as under EU procurement law and debarment regimes, for ‘self-cleaning’ based on remediation for victims as well as improvements to business systems.


Ten years ago more than 1,110 garment workers lost their lives in the Rana Plaza disaster. Despite some advances, today millions of workers across the world and their families still suffer the immediate and long-terms consequences of serious breaches of minimum labour, health, safety, and environmental standards. Even in cases where activists and workers have won remediation for victims , the risk of reoccurrence and re-victimisation remains high. An unequivocal commitment in principle to securing remedies for forced labour victims, as EU actors claim, is therefore crucial. By integrating the measures outlined here into the draft Regulation, we suggest, the EU would help to put that principle into practice.

Rana Plaza, 10 years on: time for brands, unions and the industry to work together


I am very pleased to host two blog pieces which reflect on the 10 years which have passed since Rana Plaza as well as offering thoughts as to the way forward.  The first is by Rubana Huq. Rubana is a Bangladeshi businesswoman, university academic and poet. She is the current Vice-chancellor of Asian University for Women. She is the chairperson of the Mohammadi Group and served as the first female president of the Bangladesh Garment Manufacturers and Exporters Association during 2019–2021.  She offers a close up assessment of the sector and the well being of the people who work in it.

These blog pieces were commissioned and edited by Sandhya Drew and Felogene Anumo for the Blog of the Business and Human Rights Journal but an IT blip on the CUP website is delaying publication, and so I have seized this opportunity. These pieces will be crossposted by the BHRJ Blog too at a later date.


Rubana Huq

On February 3, 2014, I wrote here about the hell which workers at Rana Plaza had gone through, and finished by asking ‘Where do we go from here?’

My pessimism in 2014 about Bangladesh’s readymade garment industry exports has proved unfounded.  In only seven months, from July 2022 to January 2023, exports stood at $27.42 billion, registering a growth rate of 14.31% on a year-on-year basis. Way back in 2013-2014, right after the Rana Plaza collapse, export from Bangladesh was $24.49 billion, followed by 2014-15 number of $25.49 billion and it has continued to grow ever since. The last export figure of 2021-22 registered an export figure of $42.61 billion.

What led to this growth? The answer is pretty straightforward this time around. Bangladesh has remediated over the last ten years. The factory situation with regard to structural, fire and electrical integrity stand at an A++ level.  Thanks to the international partners, namely Accord and Alliance, who had come in and intervened as early as May 2013 and began pushing factories to change their ways of business, things worked, things turned around. Today, the industry boasts about having 55 out of the best 100 green factories in the world.

But can Bangladesh RMG sector brag about labour conditions? This answer, this time around, is not necessarily easy to respond to. Minimum wage stands at $88 dollars per day including overtime. Prices of essentials such as onion, rice, wheat and sugar have sky rocketed. Meanwhile, demand for compliance has also shot up leaving a distinct disconnect with sourcing practices. Prices of garments have dipped.

Who will pay the extra? At a time like this, when the countries are waging wars, clothes are not cut to be priorities. Therefore, brands and retailers are as tight fisted as ever, yet trying to cover their own margins. But if the workers need to be paid more, manufacturers need to receive the extra bit, without which changing the wage scene will be a utopia.

Thus, the readymade garment sector of Bangladesh is sprinting to its destiny of cheap volume products instead of marathoning to the ultimate destination of a value added sustainable future. Ten years after the tragedy, the sector needs collaboration from all sides, brands and unions both. The time for finger pointing has to come to an end. Blame doesn’t steer towards progress; it just handicaps innovation.

Unless the brands, unions and the industry work hand in hand, the real success that evolves around the people who work there will be undermined and shortchanged.

Maybe twenty years down the line, while we stand sufficiently distanced from the horror of 24 April 2013, the sector may even turn a new page where the story of the workforce being shielded from want will be etched forever.

Rubana Huq is chairperson of the Mohammadi group. Between 2019-2021, she was the first woman president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA)  She is Vice-Chancellor of the Asian University for Women.

Human Rights and Sovereign Debt Restructurings: A Proposal for an Optimal Outcome


I am very pleased to host Danny Bradlow’s exposition of his Dove Principles.  Danny has used his vast experience to design these principles.  This blog piece was commissioned and edited by Sandhya Drew and Felogene Anumo for the Blog of the Business and Human Rights Journal but an IT blip on the CUP website is delaying publication, and so I have seized this opportunity. This piece will be crossposted by the BHRJ Blog too at a later date.


Daniel Bradlow, University of Pretoria


Zambia defaulted on its debt in November 2021 but has not yet reached an agreement with its creditors. Its president recently warned that this situation is hurting its citizens and undermining its democracy because “you cannot eat democracy”.

Given their adverse economic, social, and political impacts, it should be expected that human rights considerations would play an important role in sovereign debt restructurings. Unfortunately, this is not the case, even though all negotiating parties have human rights responsibilities or obligations.

It is unclear why these actors pay so little attention to human rights in the sovereign debt restructuring context. One possibility is that they are not sure how to incorporate human rights into their transactions.

This should not be surprising. It is difficult to understand the causal linkages between a sovereign debt crisis and the deteriorating human rights situation that follows.  There can be multiple such linkages and the lines of causation can run in different directions.

Consequently, a human rights consistent debt restructuring will be fact and context specific and will require the parties to understand their role in both creating the situation and in mitigating or eliminating the adverse human rights impacts.

This requires the parties to have a common approach to analysing the debt crisis and its anticipated economic, financial, human rights, environmental, social and governance impacts. Thus, they could benefit from having a mutually acceptable set of principles that incorporates all these issues.

In 2021, I received a grant from the Open Society Initiative for Southern Africa to explore the feasibility of my proposal to establish a DOVE (Debts of Vulnerable Economies) Fund. This fund would buy the debts of sovereigns in distress and state that it would only support sovereign debt restructurings that were consistent with widely accepted international norms and standards, My work on this project revealed shortcomings with all the existing international standards and led me to develop the DOVE Fund Principles.  The principles are based on 20 existing international norms and standards developed by states, international  organisations, industry associations and civil society organisations. They can provide a common framework for the negotiations between states and their creditors.  They are now set out and explained.

The DOVE Fund Principles

Principle 1: Guiding Norms: Sovereign debt restructurings should be guided by the following 6 norms: Credibility, Responsibility, Good Faith, Optimality, Inclusiveness, and Effectiveness.


  • Credibility: The Negotiating Parties and the Affected Parties are confident that the restructuring process can produce an Optimal Outcome. The “Negotiating Parties” are the sovereign debtor, its creditors and their advisors. The “Affected Parties” are the residents of the debtor country and those individuals whose savings either directly or indirectly finance the debt being restructured.
  • Responsibility: The Negotiating Parties seek an agreement that respects their respective economic, financial, environmental, social, human rights and governance obligations and/or responsibilities.
  • Good Faith: The Negotiating Parties intend to reach an agreement that takes account of all their rights, obligations and responsibilities.
  • Optimality: The Negotiating Parties seek an “Optimal Outcome”, that addresses the circumstances in which the transaction is being negotiated, the parties’ respective rights, obligations and responsibilities, and offers them the best possible mix of economic, financial, environmental, social, human rights and governance costs and benefits.
  • Inclusiveness: All creditors can participate in the restructuring process and the Affected Parties are able to make informed decisions about how it will impact them.
  • Effectiveness: The Negotiating Parties should seek an Optimal Outcome in a timely and efficient manner.


Principle 2: Transparency: The Negotiating Parties and the Affected Parties should have access to the information that they need to make informed decisions regarding the debt restructuring.

The creditors have access to sufficient information that they can make informed decisions about the scope of the sovereign’s debt problems, the options for their resolution and their potential economic, financial, environmental, social, human rights and governance impacts. The Affected Parties should also have access to sufficient information, subject to appropriate safeguards, that they can make informed decisions about how the restructuring may affect their rights and interests.

The creditors should inform the debtor and the Affected Parties about their environmental, social, and human rights obligations and responsibilities.

Principle 3: Due Diligence: The sovereign debtor and its creditors should each undertake appropriate due diligence before concluding a sovereign debt restructuring process.

The Negotiating Parties should utilize a debt sustainability analysis which credibly determines the sovereign’s debt restructuring needs and their impacts.

Principle 4:  Optimal Outcome Assessment:  At the earliest feasible moment, the Negotiating Parties should publicly disclose why they expect their restructuring agreement to result in an Optimal Outcome.

An Optimal Outcome requires the Negotiating Parties to assess the expected impacts of their proposed agreement on the economic, financial, environmental, social, human rights and governance condition of the sovereign borrower and the Affected Parties.

Principle 5: Monitoring: The restructuring process should incorporate credible mechanisms for monitoring the implementation of the restructuring agreement.

The Negotiating Parties should audit the financial aspects of the agreement and monitor its economic, social, environmental, human rights and governance impacts. This information should be published periodically.

Principle 6: Inter-Creditor Comparability: The restructuring process should ensure that all creditors make a comparable contribution to the restructuring of the sovereign’s debt.

 The process should give creditors the confidence that all other creditors are making comparable contributions to an Optimal Outcome.

Principle 7: Fair Burden Sharing: An Optimal Outcome should share the burden of the restructuring fairly between Negotiating Parties and should not impose undue costs on any of the Affected Parties.

Both the debtor and the creditor bear some responsibility for causing debt crises and should absorb some of the restructuring costs. Moreover, they should seek to limit how much of the restructuring costs the Affected Parties will have to bear, considering their relative wealth and ability to absorb losses.

Principle 8: Maintaining Market Access: The restructuring agreement, to the greatest extent possible, should be designed to facilitate future market access for the borrower.

It is an unfortunate reality that debtor countries must seek financing from international financial markets. Thus, the Optimal Outcome should help the debtor regain access to financial markets as quickly as possible.

As the Zambian case demonstrates, the current arrangements for restructuring sovereign debt are sub-optimal. The DOVE Fund Principles seek to overcome this problem by offering both Negotiating and Affected Parties a common conceptual framework that facilitates a fair resolution of the crisis incorporating all its social, environmental, human rights, economic, financial and governance impacts. They therefore can promote an Optimal Outcome.

For further information on this ongoing project, contact:

Business and Human Rights Journal articles for further reading:

1) Social Bonds for Sustainable Development: A Human Rights Perspective on Impact Investing

Stephen Kim PARK

Journal: Business and Human Rights Journal / Volume 3 / Issue 2 / July 2018

pp. 233-255

2) The Record of International Financial Institutions on Business and Human Rights

Jessica EVANS

Journal: Business and Human Rights Journal / Volume 1 / Issue 2 / July 2016

pp. 327-332


« Previous Entries Next Entries »

Powered by WordPress | Designed by Elegant Themes