Info Service on WTO and Trade Issues (Feb12/11)
27 February 2012
Third World Network
Human rights impact of trade and investment pacts
Published in SUNS #7312 dated 20 February 2012
17 Feb (Kanaga Raja) -- The United Nations Special Rapporteur on the
right to food has unveiled a set of seven guiding principles on human
rights impact assessments of trade and investment agreements.
These principles have been put forward by Special Rapporteur Olivier
De Schutter in a report to the nineteenth regular session of the UN
Human Rights Council due to take place later this month.
According to the Special Rapporteur, these guiding principles are intended
to provide States with guidance on how best to ensure that the trade
and investment agreements they conclude are consistent with their obligations
under international human rights instruments.
The rights expert said that human rights impact assessments can be an
important tool for States in negotiating trade and investment agreements,
particularly to ensure that they will not make demands or concessions
that will make it more difficult for them, or for the other party or
parties, to comply with their human rights obligations.
"Yet, States have been provided with little guidance as to how
such human rights impact assessments should be prepared, what is specific
to a human rights impact assessment (as distinct, for instance, from
sustainability impact assessments or social impact assessments), and
how the conduct of human rights assessments relates to the undertakings
of States under human rights treaties."
The guiding principles are intended to provide such advice, said De
Schutter, adding that they are also intended as an operational tool
that may be useful for human rights treaty bodies and the special procedures
of the Human Rights Council, to the extent that their mandate includes
assessing the consistency of trade and investment agreements with the
human rights undertakings of States.
"Since the preparation of human rights impact assessments is a
way for the State to discharge its human rights obligations, by ensuring
that it does not conclude agreements that make it more difficult or
impossible for the State to comply with such obligations, it is recommended
that the process of preparing human rights impact assessments be stipulated
in legislation, rather than left to the ad hoc choices of the Executive."
Guiding principle No. 1 states: "All States should prepare human
rights impact assessments prior to the conclusion of trade and investment
The Special Rapporteur commented that by preparing human rights impact
assessments prior to the conclusion of trade and investment agreements,
States are addressing their obligations under the human rights treaties.
First, said De Schutter, since States are bound by these pre-existing
treaty obligations, they are prohibited from concluding any agreements
that would impose on them inconsistent obligations. Therefore, there
is a duty to identify any potential inconsistency between pre-existing
human rights treaties and subsequent trade or investment agreements,
and to refrain from entering into such agreements where such inconsistencies
are found to exist.
Second, the right of every citizen to take part in the conduct of public
affairs, recognized under the International Covenant on Civil and Political
Rights (art. 25a), implies that no trade or investment agreement should
be concluded in the absence of a public debate, which in principle should
be conducted by freely elected parliamentary assemblies for approval
to ensure that the free expression of the will of the electors shall
be fully respected (art. 25b of the Covenant). Human rights impact assessments
serve to inform such public debate.
Third, since compliance with the obligations imposed under trade and
investment agreements typically is ensured by the threat of economic
sanctions or reparations authorized or awarded by an agreement-specific
dispute settlement mechanism or international arbitral tribunals, it
is important that any inconsistency with pre-existing human rights obligations
imposed on the State are identified beforehand, to the fullest extent
"Where an inconsistency between the human rights obligations of
a State and its obligations under a trade or investment agreement becomes
apparent only after the entry into force of the said agreement, the
pre-existing human rights obligations must prevail," said the Special
Guiding Principle No. 2 states: "States must ensure that the conclusion
of any trade or investment agreement does not impose obligations inconsistent
with their pre-existing international treaty obligations, including
those to respect, protect and fulfil human rights."
The Special Rapporteur said that States cannot ignore their human rights
obligations in the conclusion of trade or investment agreements, whether
at the multilateral or bilateral level.
The specific purpose of human rights impact assessments, which distinguishes
them from other impact assessments (such as social, environmental or
sustainability impact assessments), is to ensure that States will not
be facing inconsistent obligations, imposed respectively under human
rights treaties and under trade or investment agreements, and that they
will not face obstacles in the realization of human rights they have
committed to guarantee as a result of having entered into such agreements.
In other words, the human rights impact assessment should measure the
potential impact of the trade or investment agreement on human rights
outcomes and on the capacity of States (and non-State actors, where
relevant) to meet their human rights obligations, as well as on the
capacity of individuals to enjoy their rights.
Human rights impose on States three levels of obligations, said the
First, States must respect human rights. They are thus precluded from
entering into trade or investment agreements that would require them
to adopt certain measures, such as lowering a tariff or strengthening
intellectual property rights, that would result in an infringement of
human rights they have agreed to uphold.
Second, States should protect human rights. They must therefore ensure
that they will not be precluded from the possibility of controlling
private actors whose conduct may lead to violating the human rights
of others, for example, as a result of an excessively high level of
protection of foreign investors established on their territory or because
of a broad understanding of the prohibition of imposing performance
requirements on such investors.
Third, States should fulfil human rights. This requires that States
refrain from concluding trade and investment agreements that will render
impossible the adoption of policies that move towards the full realization
of human rights, insofar as it relates to rights that are subject to
progressive realization by States to the maximum of their available
Guiding Principle No. 3 states: "Human rights impact assessments
of trade and investment agreements should be prepared prior to the conclusion
of the agreements and in time to influence the outcomes of the negotiations
and, if necessary, should be completed by ex-post impact assessments.
Based on the results of the human rights impact assessment, a range
of responses exist where an incompatibility is found, including but
not limited to the following: (a) Termination of the agreement; (b)
Amendment of the agreement; (c) Insertion of safeguards in the agreement;
(d) Provision of compensation by third-State parties;
(e) Adoption of mitigation measures."
The Special Rapporteur noted that even by initiating the human rights
impact assessment before negotiations are well advanced, the final results
of the assessment may only become available when negotiations have advanced
to a point such that anything more than cosmetic changes may become
extremely difficult. As such, States are encouraged to finalize a feasibility
study that incorporates a human rights impact assessment prior to entering
into the final phase of formal negotiations.
Where the impact assessment indicates the possibility of potential human
rights violations resulting from the draft agreement, the draft may
have to be revised to remove any incompatibility that has been found
with pre-existing human rights obligations of the State concerned. Removing
the incompatibility can be achieved either by the adoption of measures
at the domestic level that ensure that the agreement will be consistent
with the human rights obligations of the State, or by introducing within
the agreement itself clauses, such as flexibilities or exceptions, that
will allow the State to comply with its human rights obligations.
Guiding Principle No. 4 states: "Each State should define how to
prepare human rights impact assessments of trade and investment agreements
it intends to conclude or has entered into. The procedure, however,
should be guided by a human rights-based approach, and its credibility
and effectiveness depend on the fulfilment of the following minimum
conditions: (a) Independence; (b) Transparency; (c) Inclusive participation;
(d) Expertise and funding; and (e) Status."
The Special Rapporteur said that while the primary purpose of a human
rights impact assessment of a trade and investment agreement is to ensure
that the provisions of such agreement shall not be incompatible with
the normative content of relevant human rights, it also should include
an assessment of whether the process of negotiating the impact of the
trade or investment agreement has affected human rights. Thus, it should
be assessed whether the process of negotiation was participatory, inclusive
and transparent, and whether it was conducted with appropriate parliamentary
The rights expert cautioned that human rights impact assessments can
constitute a complex endeavour, and challenges may be encountered in
developing a robust methodology. A number of factors contribute to this,
including: (a) the difficulties of establishing causality between human
rights outcomes and specific trade/investment reforms or initiatives;
(b) the paucity of data, especially in least-developed countries; and
(c) the limitations of quantitative and qualitative methods in capturing
dynamic effects of trade/investment reforms.
"For this reason, it is for each State to define the calendar according
to which the assessment shall be made; which body shall be in charge
of the assessment; and on the basis of which data the assessment shall
Guiding Principle No. 5 states: "While each State may decide on
the methodology by which human rights impact assessments of trade and
investment agreements will be prepared, a number of elements should
be considered: (a) Making explicit reference to the normative content
of human rights obligations; (b) Incorporating human rights indicators
into the assessment; and (c) Ensuring that decisions on trade-offs are
subject to adequate consultation (through a participatory, inclusive
and transparent process), comport with the principles of equality and
non-discrimination, and do not result in retrogression."
According to the Special Rapporteur, human rights impact assessments
should rely on indicators that measure the following: (a) Whether the
trade or investment agreement will make it more difficult for the State
concerned to ratify particular human rights instruments, to adapt its
regulatory framework to the requirements of human rights, or to set
up the institutional mechanisms, that ensure compliance with its human
rights obligations (structural indicators); (b) Whether it creates obstacles
to the implementation of the State's policy measures and programmes,
or to the functioning of institutional mechanisms, that ensure effective
fulfilment of State's human rights obligations, particularly insofar
as such obligations require budgetary commitments (process indicators);
and (c) Whether the trade or investment agreement may make it more difficult
for a State to make progress in the realization of the human rights
it has undertaken to comply with, measured from the perspective of full
enjoyment of all human rights by all (outcome indicators).
Guiding Principle No. 6 states: "States should use human rights
impact assessments, which aid in identifying both the positive and negative
impacts on human rights of the trade or investment agreement, to ensure
that the agreement contributes to the overall protection of human rights."
The rights expert said that delicate choices will have to be made about
the priorities that the State seeks to pursue, for instance, where trade
and investment agreements contribute to economic growth and thus may
facilitate the ability of the State to realize certain rights by mobilizing
budgetary resources to finance certain public goods and services in
various areas, including education, food, health and housing, while
at the same time negatively affecting the State's capacity to protect
the rights of certain groups, such as workers in the least efficient
sectors of the economy.
"States should prioritize those economic and social benefits that
will be sustainable in the long term in terms of their contribution
to the realization of all human rights, including the right to development,
over short-term economic and/or political gains expected from any trade
and investment agreement."
Guiding Principle No. 7 states: "To ensure that the process of
preparing a human rights impact assessment of a trade or investment
agreement is manageable, the task should be broken down into a number
of key steps that ensure both that the full range of human rights impacts
will be considered, and that the assessment will be detailed enough
on the impacts that seem to matter the most: (a) Screening; (b) Scoping;
(c) Evidence gathering; (d) Analysis; (e) Conclusions and recommendations;
and (f) Evaluation mechanism."
According to the Special Rapporteur, first, the human rights impact
assessment should include a preliminary analysis of which human rights
are most likely to be affected, with respect to which population groups,
as a result of the trade or investment agreement (screening): this should
allow the determination of which elements of the trade or investment
agreement shall be subject to a full assessment, and with regard to
their impacts on which human rights.
Second, those in charge of the human rights impact assessment should
determine the set of questions that will have to be addressed and the
methodology to be applied, including the use of indicators, for the
full assessment in the areas identified at the screening stage (scoping).
Third, evidence gathering shall include the use of both quantitative
(including economic modelling and regression analysis) and qualitative
research (including consultations with rights holders or their representatives,
and where feasible using participatory research methodologies), in order
to determine the impacts as precisely as possible.
Fourth, the impacts of the trade or investment agreement on the ability
of the State to respect, protect and fulfil human rights should be assessed,
taking into account what has been said about trade-offs (analysis).
The outcome of the human rights impact assessment, in any case, should
be made public, since it should feed into the public debate about the
preparation or implementation of the trade or investment agreement considered.
Fifth, the impact assessment should lead to the presentation of conclusions
and recommendations, on the basis of which the bodies in charge of negotiating
and concluding the impact assessment shall be held accountable.
Sixth, appropriate follow-up should be given to the conclusions and
recommendations adopted at the final stage of the impact assessment,
by organizing a monitoring and evaluation mechanism assessing the extent
to which these conclusions and recommendations were in fact taken into
account, said the Special Rapporteur. +
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