FDI and human rights studied

A study on Foreign Direct Investments (FDI) and human Rights has been launched.

BY RICHARD MULIISA

A study on Foreign Direct Investments (FDI) and human Rights has been launched.

It was commissioned by the International Finance Corporation (IFC) and United Nations recently.

IFC is a World Bank group arm promoting sustainable private sector investment in developing countries.

The study was geared towards scrutinising the connection between protection of investors' rights and the human rights obligation of the host countries.

The ability of the host country to adopt and implement new human rights laws in areas such as labour, protection of the environment and the provision of essential public services such as water were considered.

"Some contracts between investors and host governments include clauses that either freezes the laws that apply to the investor or allocate compensation for the costs incurred by the investor to comply with new laws."

"The goal is to understand if such unintended consequences exist, and if they do, to recommend tools to avoid such problems," says recent IMF press release.

When contacted, Gatare Francis, Rwanda Investment and Export Promotion Agency (Riepa) Director General said he was not informed about the study but admitted that the country is providing incentives to investors.

"Investment incentives are packaged in the investment code and we intend to provide suitable investment climate," he said.

On Environment protection, Gatare said Rwanda Environment Management Authority (Rema) is mandated to provide guidelines to all potential investors on environmental protection.

The study comes at a time the country is currently registering increases in the number of projects registered.

Last year's, data from Riepa show that an investment amount worth Frw136 billion ($ 245.5m) was registered from 69 projects.

The number of projects increased from 29 registered a year before (2005).
The launched was in Washington D.C. by Harvard University Professor, John Ruggie.
He is a member of the World Bank Group and the United Nations Secretary-General Special Representative on Business and Human Rights.

IFC finances the private sector investment, Mobilising capital in the international financial markets, and providing advisory service.

To IMF, research will be published in early 2008 and recommendations curried forward by Ruggie, in his next report to the 2008 UN Human Rights Council. Ruggie said the study intends to strike the right balance between investors' legitimate interest and the host states duties to protect human rights.
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