Today, FMO, the Dutch development bank, published its updated human rights position statement as part of its Sustainability Policy, following an internal review and consultation with our stakeholder community.
FMO’s new position statement is a firm commitment to respect human rights. In practice, this means that we explicitly and systematically address human rights in our due diligence and across our investment process. This is in line with our mandate to invest in the poorest and most difficult countries in the world. By investing in these markets, we are keen to make a positive difference and improve outcomes for some of the world’s poorest people. However, investing in these markets can carry higher risks than those investments undertaken by commercial banks and exposes us more easily to human rights challenges. The importance of having an explicit commitment to human rights has been underlined further by an escalation of violence towards human and environmental rights defenders globally.
FMO’s position statement on human rights is a reflection of the continuous learning process we are in. Beside the feedback garnered throughout the consultation process, further independent advice was sought from the Rotterdam School of Management (RSM) and non-profit human rights think-tank NomoGaia.
As a development bank, the IFC Performance Standards remain our primary standard in guiding client relationships. Since 2013, FMO has been upholding the UN Guiding Principles on Business and Human Rights (UNGPs). In addition, last autumn, FMO signed the Dutch Banking Sector Agreement on International Responsible business conduct regarding human rights (IMVO). The position statement published today clearly states our determination to operationalize these commitments to international guiding standards. Our approach intends to reduce human rights risks in FMO’s portfolio wherever possible. We will engage with clients to:
Implement protocols on contextual risk assessments for our highest risk projects, looking at risks to civil, labour and political rights, those associated with land and other natural resources, as well as issues related to security, conflict and corruption.
Introduce early warning systems for risk of oppression or violence towards human and environmental rights defenders and those opposing projects we invest in, as well as human rights risks related to land acquisition and natural resources.
Strengthen measures to verify broad community support and Free Prior Informed Consent (FPIC) from people that might be significantly impacted by our investments, for example by requiring the organizations to which we lend to consult openly and fairly with anyone that may be affected by the project.
Pilot Human Rights Risk Assessments to understand if, how, when and where these assessments may add additional information to our existing ESIA (Environmental and Social Impact Assessment) approach, with regards to potential risks and how to mitigate these.
To remedy where there are threats to human rights, since 2012, FMO has an Independent Complaints Mechanism in place. In addition, we will continue to invest in our clients’ capacity to consult meaningfully with local stakeholders, and to address grievances and complaints, in line with our standards. Implementing all of this will take time. We are a sizeable bank, with over 30 environmental and social officers working in our deal teams. We are investing significant resources to strengthen our capacity to respect human rights. It is critical that we test and then roll out these processes properly. We are building capacity internally, through training and the creation of a social and human rights focal point in each department. We are in dialogue with key stakeholders including government, (human rights) NGOs and academics regarding good practice. And in line with the IMVO Covenant, we will explicitly report on our human rights performance from 2018 in line with the UNGP reporting framework. We are committed to walking the talk. We will review what we are doing until we are confident that we have built an appropriate and effective system to implement our human rights due diligence protocols and tools in an effective and pragmatic way.