A report prepared by the Global Initiative for Economic, Social, and Cultural Rights (GI-ESCR) made recommendations addressing extraterritorial obligations in regards to finance on the People’s Republic of China. The document was one of the Parallel Reports on the occasion of the consideration of the Second Periodic Report of the People’s Republic of China by the Committee on Economic, Social and Cultural Rights (CESCR).
Within their report, the GI-ESCR discusses extraterritorial obligations in international human rights law. In general, under the UN Charter, the obligation to protect human rights takes precedence over obligations from any treaty or other agreement. Related to financial institutions, the Maastricht Principles on Extra-Territorial Obligations in the Area of Economic, Social and Cultural Rights, adopted in 2011, assert that if a State is party to an international organization they must take reasonable steps to ensure that the organization acts in accordance with that State’s human rights obligations. Under these Principles, States are also required to assess the potential extraterritorial impacts on the enjoyment of economic, social and cultural rights of any law, policy, or practice prior to implementation, including decisions on funding.
On these grounds, GI-ESCR made two main recommendations to the People’s Republic of China relating to financial policy. First, that the PRC adopt a human rights-based approach to all official development assistance by both assessing the human rights impact prior to making any funding decisions and creating a mechanism to monitor the human rights impact of projects and to make recommendations for remedial measures should the need exist. Second, that the PRC ensure the proposed BRIC Development Bank uses a human rights-based framework in all activities, a reasonable step to ensure that economic, social, and cultural rights are respected by the organization.