Although BITs and human rights treaties have been strongly linked to foreign direct investments, there are almost no studies determining the existence of a direct relationship.
IFC, a member of the World Bank Group, and the United Nations Secretary-General’s Special Representative on Business and Human Rights, Professor John Ruggie of Harvard University, launched today a joint study on foreign direct investments and human rights.
This joint study aims to examine the relationship between the protection of investor rights and the human rights obligations of the host states. Some contracts between investors and host governments include clauses that either freeze the laws that apply to the investor or allocate compensation for the costs incurred by the investor to comply with new laws. The study will look at the potential impact of these clauses on the host states’ ability to adopt and implement new human rights laws, in areas such as labor, protection of the environment and the provision of essential public services such as water.
The research will be published by IFC in early 2008.