The Impact of What: The Initiative to be accompanied by HRIAs

All human activities can have environmental or human consequences. Therefore, it is necessary to determine what types of initiatives are in general regarded as potentially subject to impact assessments. Investment projects and trade policies,¹⁰⁶ but increasingly also structural adjust-ment programs¹⁰⁷ or debt restructuring¹⁰⁸ might require HRIAs. In addition, as will be seen in the case of the EU, legislative and non-legislative acts in potentially all policy areas can have im-pacts that may be felt internally, i.e. within the EU territory, and externally.

2.3.2.1 Projects

Environmental impact assessments were first officially endorsed under US Federal law and le-gally embedded in the National Environmental Policy Act (NEPA 1969),¹⁰⁹ according to which all agencies of the Federal Government shall “utilize a systematic, interdisciplinary approach which will insure the integrated use of the natural and social sciences and the environmental design arts in planning and in decision-making which may have an impact on man's environment”¹¹⁰. Based on substantive objectives (e.g.: sustainable development), EIA is a mechanism through which relevant information can enter into the decision-making process.¹¹¹

Today, it is estimated that more than 100 countries have implemented EIAs in some forms into their national legislation.¹¹² This is also the result of a diffusion of norms: US NEPA might have served simply as a role model that was copied elsewhere, and probably pressure from donors and international organizations such as the World Bank has added to this type of diffusion. The OECD encouraged its member states to “actively support the formal adoption of an environmen-tal assessment policy for their development assistance activities”.¹¹³ Another dimension of ternationalization is important, namely the increasing regulation of impact assessments in in-ternational law. Rules and principles on EIAs can be found in inin-ternational treaties and

105 Article 11 ICESCR; UN Committee on Economic, Social and Cultural Rights, E/C.12/1999/5, General Comment No. 12 - The Right to Adequate Food (Art. 11). For more examples on ex-ante impact assessment with human rights reference: Landman, Studying human rights (above, n. 102), 128 ff.

106 Baxewanos and Raza, ‘Human Rights Impact Assessments as a New Tool for Development Policy?’

(above, n. 22), p. 20.

107 A first step towards such as policy-related HRIA can be seen in the the World Bank’s guidelines on

“Poverty and Social Impact Analysis” (PSIA).

108 Goldmann, ‘Human Rights and Sovereign Debt Workouts’ (above, n. 3), p. 100.

109 The National Environmental Policy Act (“NEPA”) of 1969, as amended, 42 USC Chapter 55 Sections 4321-4370 (h); Craik, The International Law of Environmental Impact Assessment (above, n. 59), p. 23.

110 42 USC 4331 § 102 (A).

111 Craik, The International Law of Environmental Impact Assessment (above, n. 59), p. 26.

112 Ibid., p. 4.

113 OECD, Recommendation of the Council on Measures Required to Facilitate the Environmental Assessment of Development Assistance Projects and Programmes (1986), C(86)26/FINAL, I. a.

tions¹¹⁴, international case law¹¹⁵ and the law of international organizations¹¹⁶. This mainly con-tains the obligation of states to also assess transboundary impacts when conducting an EIA.¹¹⁷ This does not mean that the national and international spheres are easily separable: on the one hand, domestic EIA norms were often used as templates for international agreements, and on the other hand, international norms had to be incorporated into domestic law.¹¹⁸

The environmental and social impacts of mainly large-scale international development projects are oft-reported, and often a severe social backlash against these initiatives emerged: Especially infrastructure projects such as dams or oil pipelines are in a certain way the prototype of human rights struggles in international development finance.¹¹⁹ Apart from social resistance, the con-cept of development as pursued until the 1990s was also fundamentally questioned¹²⁰, ranging from pragmatic to structural and post-colonial criticism. In response, states and international organizations felt the need to pay more attention to environmental and social aspects of eco-nomic development. The first safeguard policies at the World Bank required environmental and, to a limited extend, social impact assessments for investment lending. The World Bank Group¹²¹ increasingly requires the assessment of social impacts and risks before, during and after project approvals. Especially at a time when the World Bank Group is encouraged to “expand its risk

114 UNECE, Convention on Environmental Impact Assessment in a Transboundary Context (1991); United Nations, Convention on the Law of the Sea (1982), 21 ILM 1261 (1982); United Nations, Convention on Bio-logical Diversity (Rio de Janeiro, 1992); Convention for the Protection of the Natural Resources and Envi-ronment of the South Pacific Region (1987), 26 ILM 38.

115 ICJ, Costa Rica v. Nicaragua, Certain Activities carried out by Nicaragua in the Border Area (2015); ICJ, Case concerning the Gabcikovo-Nagymaros Project (1997); ICJ, Nuclear Tests Case (New Zealand v. France) (1974); Arbitral Trib., 3 U.N. Rep. Int’l Arb. Awards 1905 (1941), Trail Smelter Arbitral Decision.

116 World Bank, The World Bank Operations Manual OP/BP 4.01 (previous), now: ESS1. On the recent re-form of the World Bank’s Environmental and Social Safeguards: Philipp Dann and Michael Riegner, ‘The World Bank ’ s Environmental and Social Safeguards and the evolution of global order’, Leiden Journal of International Law (2019), 32,, 32 (2019), pp. 537–559.

117 Craik, The International Law of Environmental Impact Assessment (above, n. 59); Angela Cassar and Carl Bruch, ‘Transboundary Environmental Impact Assessment in International Watercourse Management’, N.Y.U. Environmental Law Journal, 12 (2003), 169-244; Charles Kersten, ‘Rethinking Transboundary Envi-ronmental Impact Assessment’, The Yale Journal of International Law, 34 (2009), pp. 173–206.

118 Craik, The International Law of Environmental Impact Assessment (above, n. 59), p. 24.

119 Michael Likosky, Law, infrastructure, and human rights (Cambridge, New York: Cambridge University Press, 2006); Dann, The Law of Development Cooperation (above, n. 4), p. 101.

120 By way of example: Graham Hancock, Lords of poverty (London: Arrow Books, 1997); William Russell Easterly, The White Man's Burden (Oxford: Oxford Univ. Press, 2006).

121 IFC, Performance Standards, January 1, 2012, para 4; IFC, Policy on Environmental and Social Sustaina-bility (2012), para 12; The International Business Leaders Forum (IBLF) and the International Finance Corporation (IFC), in association with the UN Global Compact, Guide to Human Rights Impact Assessment and Management. The IBRD/IDA is still hesitant to use human rights terminology, even though reference to human rights has recently been made in the Bank’s new Vision Statement: Dann and Riegner, ‘The World Bank ’ s Environmental and Social Safeguards and the evolution of global order’ (above, n. 116), p.

551. Under its new Environmental and Social Framework, rules on EIA were now explicitly extended to also cover social impacts for certain types of investment lending (see ESS1), Ibid. Even before the EFS entered into force, internal World Bank law contained several norms requiring social impact assessments:

BP 10.00 at para 23; World Bank, ‘Good Practice Note: Using Poverty and Social Impact Analysis to Sup-port Development Policy Operations’, 2008; Gender Assessment: OP 4.20 para 2.

appetite”, it is essential to also “invest in structures that provide management with assurance that [environmental and social] risk is being rationally identified and managed.”¹²²

Soon, other international financial organizations followed and enacted similar safeguard poli-cies, increasingly incorporating also human rights frameworks.¹²³ This trend is not limited to traditional Western donors or investors; while still refraining from human rights terminology, the Asian Development Bank (ADB) also stresses the “the importance of safeguard policies on environmental and social impacts of projects.”¹²⁴

2.3.2.2 Policies

While environmental impact assessments were first intended to accompany specific projects, in the 1970s another type of impact assessment evolved. Increasingly, Regulatory Impact Assess-ments (RIA) were used as tools to evaluate the costs and benefits – or “impacts” – of regulatory initiatives. Like EIAs, they were increasingly institutionalized and spread among different legal systems around the world.¹²⁵ While the idea to oversee the costs and benefits of regulation is not new,¹²⁶ what was new is the density of regulation and the spread of IAs to oversee regulation, a trend also promoted by the OECD.¹²⁷ Countries all over the world have started to implement IA systems (e.g. Regulatory Impact Assessments) to assess the consequences of regulatory and non-regulatory policy initiatives, ¹²⁸ even though scope and detail of these IAs vary tremendously between different countries. While project-IAs first focused mainly on environmental impacts and later included social and human rights assessments, RIAs first focused on financial and eco-nomic impacts and later started to include the environmental, social and human rights conse-quences.

122 CAO Vice President Request, Honduras / Dinant-01/CAO, available at

< http://www.cao-ombudsman.org/cases/case_detail.aspx?id=188>.

123 For example, the OECD governments developed the OECD Guidelines on Responsible Business Conduct which, in its 2011 update, incorporated the UN Guiding Principles on Business and Human Rights and the

“Protect, Respect and Remedy” framework which requires human rights due diligence, including where necessary human rights impact assessments: OECD, Guidelines for Multinational Enterprises (2011). In the 2000s, the Equator Principles established a framework for private Financial Institutions to assess and manage the environmental and social risks in project finance. For an overview see: Joshua Lance, ‘Equator Principles: A Hard Look at Soft Law’, N.C. Banking Institute, 17 (2013). In line with the environmental and social categorization process of the International Finance Corporation (IFC), all projects must be screened and categorized (Principle 1), and all category A and B projects are subject to an Environmental and Social Assessment (Principle 2), which is either a fully-fledged impact assessments or, for appropriate category B projects, can also be a limited or focused social assessment such as an audit. Similarly, the OECD “Common Approaches” regarding official export credits require an environmental and social review and, where ap-propriate, an Environmental and Social Impact Assessment (ESIA): OECD, Recommendation of the Council on Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence (The “Common Approaches”) (2012), C(2012)101, 13 et seq.

124 ADB, News Releases, 1 May 2015: http://www.adb.org/news/adb-and-aiib-agree-collaborate-asia

<last visited: 29 May 2020>.

125 Organisation for Economic Co-operation and Development (OECD), ‘Regulatory Impact Analysis—Tool for Policy Coherence’, 2009, p. 15.

126 Benjamin Franklin, ‘Letter to Joseph Priestley, September 19’ advised on how to take informed deci-sions in difficult cases and make sure that decision-makers consider “all the Reasons pro and con”.

127 Jonathan Wiener, ‘Better Regulation in Europe’, Current Legal Problems, 59 (2006), pp. 447–518, 453 ff.

128 For an overview: OECD, ‘Sustainability in Impact Assessments - A Review of Impact Assessment Sys-tems in Selected OECD countries and the European Commission’ (above, n. 62). For Germany: Sec. 44 GGO.

Internationally, the human rights impacts of World Bank and IMF policies were prominently discussed in the context of conditionalities attached to budget support or debt restructuring.¹²⁹ In these cases, the governments of the states where the potential human rights impacts material-ize are in charge of conducting the policy reform, even though economic dependencies and fi-nancial necessities often de facto limit their actual choice. Therefore, the legitimacy of these poli-cies is increasingly questioned. However, concerning the impacts of policy reforms in the context of budget support or debt restructuring, social and human rights impact assessments are less institutionalized compared with project-based investment lending. While other multi-lateral development banks apply a comprehensive safeguard regime – including the necessity to con-duct IAs – to all lending activities, be it project or policy lending,¹³⁰ the World Bank’s previous safeguard policies as well as the new Environmental and Social Framework (“ESF”) mainly re-late to World Bank funded investment projects.¹³¹ Admittedly, even in the context of Develop-ment Policy Lending, the World Bank must determine “whether specific country policies sup-ported by the operation are likely to have significant poverty and social consequences, especially on poor people and vulnerable groups”.¹³² An instrument to better assess especially distribu-tional impacts of policy reforms is the World Bank’s Poverty and Social Impact Analysis (PSIA) tool: it is mainly a “knowledge product” that may be used to assess the impact of policy change,¹³³ and the Operational Policies do not require, but only allow to use the PSIA to assess the consequences of DPL.¹³⁴ The regulation of environmental, social and human rights impact and risk assessment of World Bank policy lending is thus relatively thin,¹³⁵ at least compared with the emerging norms and practices at regional development banks where environmental and social impact assessments are also mandatory for general policies such as budget support.¹³⁶ Other development-related policies, such as trade and investment agreements, can have positive and negative impacts on human rights, and here, Human Rights Impact Assessments have in-creasingly gained attention in the last years. Since the 1990s, different international institutions have urged states to conduct IAs to inform their trade negotiations about the different environ-mental, social and human rights impacts and have suggested methodologies and principles to

129 Fischer-Lescano, Human rights in times of austerity policy (above, n. 3); Goldmann, ‘Human Rights and Sovereign Debt Workouts’ (above, n. 3).

130 Philipp Dann and Michael Riegner, ‘Managing Social and Environmental Risks in World Bank Develop-ment Policy Operations’, giz, April 2015, p. 2.

131 OP 4.01 on Environmental Assessment/ Environmental and Social Standard (“ESS”) 1.

132 OP 8.60 para 10. But unlike in the case of investment lending, clear standards on procedure and sub-stance are missing; instead, the impact assessment is only sporadically mentioned in a few paragraphs: OP 8.60 para 9.

133 The World Bank, ‘A User’s Guide to Poverty and Social Impact Analysis’, 2003, p. 3.

134 OP 8.60 para 10 Fn. 9.

135 Following the recent reform of the Bank’s Safeguard Policies, the document “A Vision for Sustainable Development”, which is not limited to investment lending, at least contains an explicit reference to human rights: “In this regard, the World Bank’s activities support the realization of human rights expressed in the Universal Declaration of Human Rights”: World Bank, A Vision for Sustainable Development, para 3; Dann and Riegner, ‘The World Bank ’ s Environmental and Social Safeguards and the evolution of global order’

(above, n. 116), p. 551.

136 “[T]he ISS makes it mandatory to apply Strategic Environmental and Social Assessment (SESA) to ad-dress the environmental and social issues arising from “upstream” operations, such as budget support”, AfDB, Safeguards and Sustainability Series, Vol. 1 Issue 1 Dec. 2013, p. 8, see:

http://www.afdb.org/fileadmin/uploads/afdb/Documents/Policy-Documents/December_2013_-_AfDB’S_Integrated_Safeguards_System__-_Policy_Statement_and_Operational_Safeguards.pdf.

guide the assessment process.¹³⁷ The United States agencies must consider, once a certain threshold has been met, also international environmental impacts of planned trade agree-ments.¹³⁸ In addition, NGOs and scholars joined the debate about how to best assess these im-pacts.¹³⁹ As will be explained later, major actors in global trade, such as Canada¹⁴⁰ and the USA, conducted since the 1990 EIAs of their trade agreements.¹⁴¹ In the late 1990s, the EU has started to conduct impact assessment which also include social and more recently human rights conse-quences of, for example, legislative and non-legislative acts, delegated acts, implementing measures or international trade and investment agreements; the guidelines were regularly up-dated, and IAs became a more and more integrated part of EU rule-making.¹⁴² As the EU impact assessment regime is comparatively advanced, in particular as far as human rights impacts are concerned, this thesis will focus on the institutionalization of HRIAs in EU rule and policy-making.

2.3.3 The Impact on What and Whom: From Environmental to Human Rights Impacts