The Dollars and Cents of Human Rights: The UN Guiding Principles on Economic Reform and Human Rights

Meghan Campbell and Ben Warwick 24th January 2019

Whoever would have predicted that the cutting edge of human rights work would take us to ‘Automatic Exchange of Information’ agreements or unutilised reserves? Due to an ever-increasing and overdue realisation that human rights must venture into economic, budgetary and fiscal spaces in order to be effective. Tax laws, privatization, austerity, economic, labour and environmental policies all limit the resources available to implement human rights. States must ‘balance competing priorities and make trade-offs under conditions of severe financial, political time pressure’.  The UN Independent Expert on foreign debt and human rights, has developed Guiding Principles on Economic Reform and Human Rights that provide much-needed clarity on how to make difficult economic choices in a manner that upholds the state’s human rights commitments.  

The Guiding Principles are a highly significant contribution and bold step forward that shows how human rights should be injected into the centre of all economic policies. Fiscal policies must not deepen social and economic inequalities but instead must be used to positively transform social and economic structures (Principle 8). The Guiding Principles are a rich resource and this blog post highlights a few of the key innovations.

Mobilising Resources

States regularly respond to claims for socio-economic rights with arguments on resource scarcity. The Independent Expert’s commentary unflinchingly holds that such a lack of resources is no longer an excuse for failing to implement human rights (Principles 6 and 9). State must pursue various measures to mobilise resources to achieve human rights. These include adopting a progressive tax code; rethinking tax exemptions; redressing tax evasion across geographic borders; widening the tax base to include multinational corporations and the very wealthy and enhancing tax collection methods (Principles 9, 11, 17). At its heart, states’ tax policies must ‘promote the redistribution of wealth’ to overcome disadvantage.

Human Rights Impact Assessment

In balancing priorities and making trade-offs, the state’s decision-making process is immeasurably enhanced by ex ante and ex post human rights impact assessments (Principle 17). The Guiding Principles underscore how human rights provides a different perspective and new evidence on economic debates. They are sensitive to the urgency with which some of these economic decisions are made. However, they provide a number of ways that urgent decisions can guard against human rights violations. The state should build links with civil society during the ‘good times’ so that input can be sought quickly when it is needed and in any event a human rights assessment should follow as soon as possible (Principle 18).

Times of Austerity

The Principles direct a good deal of attention at to economic reforms undertaken in the name of austerity. Austerity policies has often overridden human rights. The Principles underscore that human rights protections become more, not less, important in times of financial crisis (Principle 2). If States adopt austerity measures, they must ensure that they don’t excessively harm rights protections (Principle 10), and the minimum core content of rights must be realised regardless of resource constraints (Principles 6 and 9).

Transforming for Economic Equality

The structure of the economy does not benefit everyone equally. Economic reforms that encourage ‘labour flexibilization, reductions in the coverage of social protection benefits, cuts to public sector jobs and the privatization of services’ disproportionately impact women and other identity group’s human rights (Principle 8). A strong thread running throughout the Principles is the requirement to use economic policies to ‘transform existing inequalities.’  To achieve equality, the Principles emphasise the importance of genuine participation of vulnerable and excluded groups (Principle 11). Genuine participation requires positive actions to make financial information accessible to the public (including those who might need extra support in order to participate, such as children and persons with disabilities) so that all can evaluate a wide range of economic ideas and options open to the state.

Arm’s Length Actors

The Guiding Principles do not shy away from the ways that states can hide behind the actions of financial organisations. The role of central banks, of international financial institutions, and donors all come in for attention (Principles 11 and 15). The Principles underscore that the states must follow through on their human rights obligations within these organisations and if they subject themselves to their policies, must ensure that they do not sign up to human rights-violating commitments. The Principles are also clear that the role of privatisation and demand that private actors are not used as a backdoor to violating human rights commitments or vitiating opportunities to positively transform the economy.

The Guiding Principles are a crucial step forward in ensuring the fulfilment of human rights and mark a significant evolution in international human rights law.

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