A Roma family living in an informal settlement below a bridge in Serbia discovered in 2007 that the bridge would be rehabilitated as part of transport improvements crucial to the region’s economy. But work on the bridge would also mean the destruction of their homes. Often subject to prejudice, discrimination, and exclusion across Europe, the Roma families were concerned about their future and livelihood.
As a financier of the bridge rehabilitation, the European Investment Bank worked with other financiers and with the Serbian government to develop a resettlement plan. The Roma affected by the project received social housing, employment opportunities, and training programmes within the three first years of the project. Their access to health, education and welfare services also improved.
It’s challenging to ensure that projects truly build a sustainable future for all, while not harming anyone. The European Investment Bank has released its approach to human rights for the first time. The publication outlines the policies, procedures, practices and actions taken by the Bank to promote human rights. It aims to answer questions often posed by civil society organisations and other stakeholders about the Bank’s policies and its human rights impact.
“Respect for human rights is not a given, even in the European Union,” says Yasmine Pagni, head of social policy at the European Investment Bank. “As the bank of the European Union, we have a strong role to play by setting high standards and supporting our borrowers in achieving them.”
The European Investment Bank is legally bound by the requirements of the Charter of Fundamental Rights of the European Union. The Bank also complies with international human rights laws, principles and standards, such as the United Nations Guiding Principles on Business and Human Rights, to ensure that each of the more than €60 billion it lends annually improves lives and promotes human rights.
Here’s how it works.
EU bank accountability through transparency
When we talk about business, all human rights are concerned. Many of these are taken into account by the Bank, but here are just a few of them:
- the right to life
- the right to safe and healthy working conditions
- the right to an adequate standard of living
- the rights of indigenous peoples
- the right to non-discrimination
- the rights of children.
To ensure that its investments respect and promote human rights, the European Investment Bank has in place a series of policies, procedures, and practices, notably the EIB Group Environmental and Social Policy and its Standards.
The European Investment Bank requires its promoters to integrate human rights into their environmental and social due diligence processes. This includes building and maintaining a constructive relationship with communities and people affected by the project, so that their rights, views, interests, and concerns are taken into account throughout the project lifecycle. Promoters must guarantee access to information, as well as its timely disclosure and transparent dissemination without any discrimination. To this end, the Bank may provide them with advice, technical support and guidance and conduct studies.
In addition to these standards, the European Investment Bank excludes from his financing activities that:
- inherently limit people’s individual rights and freedom, such as prisons
- result in forced labour or harmful child labour
- involve animal and human reproductive cloning, the sex trade, or the manufacture of tobacco or gambling.
All excluded activities are published on this list.
“Accountability comes through transparency,” says Hakan Lucius, head of corporate sustainability and civil society at the European Investment Bank. “A good transparency policy is already the first step to being accountable and to performing on many issues, including on human rights.”
Civil society: the watchful eye on the ground
Civil society organisations are invited to contribute to European Investment Bank policies during public consultations. They also get the opportunity to discuss any topic with the EIB Board and the environment, climate and social office several times a year, and they may raise other concerns at any moment with the civil society division.
“Civil society is the most watchful eye on the ground when implementing a project,” says Lucius. “No matter how many monitoring missions we do, no matter how many people we engage with, there is no one better than civil society to know about the project and the people on the ground. When civil society raises an issue, we consider it as an important flag.”
Anyone must be able to engage freely with the Bank and its promoters in providing feedback, voicing opposition, and raising concerns. The Bank does not tolerate acts of intimidation or reprisals in relation to the activities it finances and takes appropriate follow-up actions.
If someone is concerned about the impact of a project, project-level grievance mechanisms receive and facilitate redress for concerns throughout the lifetime of the project. It is also possible to file a complaint for maladministration with the EIB Group Complaints Mechanism. The main role of the EIB Complaints Mechanism is to listen to concerns about an EIB Group project or activity and enable people to exercise their rights to complain and be heard. When analysing a case this could either be done through a compliance review or a dispute resolution process. In its compliance review the Complaints Mechanism will analyse whether the EIB Group has failed to act in accordance with its policies, standards and procedures.
“We are an independent function within the Inspectorate General,” says Sonja Derkum, head of the Complaints Mechanism. “We have a strong policy protecting our independence from potential interference. As head of the Complaints Mechanism, I have ultimate decision-making powers on the admissibility of a case, on how to investigate, and on the final report.”
In Malawi, a European Investment Bank water project faced issues in 2021 concerning compensation and damage to property. By enabling constructive dialogue between the affected community and the promoter, the Bank’s Complaints Mechanism helped parties reach an agreement that aims to improve the situation of the complainants. It includes the installation of communal water points, the payment of compensation for trees and crops, and the rehabilitation of a building that was converted into a health facility, as part of the borrower’s corporate social responsibility.
The Complaints Mechanism operates under a two-stage system: if a complainant is unsatisfied with the final reply from the Complaints Mechanism, they may take their complaint to the European Ombudsman.
Context and communication key to addressing human rights
“We need to take the broader operational context into account,” says Pagni, the social policy head. “That means factors such as conflict, fragility and weak governance, the presence of vulnerable people, sector and business activities, including those activities that are often linked to human-rights impacts, such as land acquisition, resettlement, extensive workers influx, or extensive water usage. It also means the experience, track record and management capacities of the promoter, suppliers, and others to manage human rights risks.”
The European Investment Bank assesses risks associated with projects. Those that are expected to involve resettlement, notably in the road, urban development, and energy sectors, often come with a higher risk of human-rights issues. Supply chains are another source of risk in terms of ensuring compliance with labour standards, such as the prevention of child labour and forced labour, or the provision of equal opportunities and decent work.
“Good communication and engagement between the promoter and the affected community can usually reduce significantly the risk of harm occurring,” says Complaints Mechanism head Derkum.
Sharing lessons from the ground
The European Investment Bank participates in working groups with other multilateral development banks, notably via the Independent Accountability Mechanisms Network, which enables the different mechanisms to share their best practice.
The different banks also learn from each other when the worst happens. Some years ago, an international financial institution faced cases of gender-based violence during the implementation of one of its infrastructure projects. This case led to a re-think among the multilateral development banks community, which collaborated to develop approaches to prevent such possible incidents to happen in the future. All institutions involved took it very seriously. The European Investment Bank included requirements to prevent gender-based violence in its environmental and social standards.
Continuous learning for EU bank on human rights
To ensure that a project respects human rights, staff are regularly trained about risks and red flags that can arise during project appraisal and during monitoring.
“If staff have a better understanding of the right to information in projects and the benefits,” says Derkum, “they will be in a better position to assess the need for a good stakeholder engagement plan and better equipped to implement it.”
That goes for the promoters, too. The Bank provides them with guidance, for example, to better understand and mitigate risk factors related to gender-based violence in large projects in remote areas where an influx of workers could potentially give rise to problems. The Bank is also developing or revising guidance notes for promoters on, for example, stakeholder engagement and involuntary resettlement. The Bank’s Complaints Mechanism has also published its EIB Group Complaints Mechanism's approach to preventing and addressing reprisals
