Global Project Finance, Human Rights and Sustainable Development

Summary of Research Findings :
The project explores the relationship between the techniques of project finance on the one hand, and the goal of sustainable development, the protection international environmental and human rights standards on the other. As the practical benchmarks for evaluation it uses the standards adopted by private lending banks subscribing to the Equator Principles for granting project finance, and on International Finance Corporation project standards.

Four case studies were carried out under the supervision of the International Institute for Environment and Development, partners in the project. The particular cases were chosen in order to provide a spread both geographically and in terms of types of economic activity. Studies were carried out on two mining operations in Ghana; on a pulp paper mill on the border between Argentina and Uruguay; and petroleum pipeline connecting Azerbaijan, Georgia, and Turkey.
The main achievements of this project was to provide a sophisticated descriptive understanding of how the structure of incentives in project finance may have both positive and negative implications for human rights and sustainable developments.

The research has identified key phases at which the options for and against opting for project finance are in place, and the motives that project sponsors and lenders have for adopting it. It established the major variables informing these decisions, and connected them to potential impacts on host societies. For further information go to the ESRC Today or to the Professor Sheldon Leader’s .

The project has developed a set of nine recommendations for changes in law and for the adoption of codes of practice that can help to avoid some of the risks identified as well as improve on the positive contribution that project finance has already made to the societies in which it operates.

The results of the research were presented at various conferences including the International Law Breakfast Meeting, Buisiness and Human Rights, Chatham House in 2006 and the UN Human Rights Council Consultation on Human Rights and the Financialo Sector, Geneva, Switzerland, 2007.

Key publications:

Sheldon Leader, 'International Trade and Human rights: A Review Essay', 24 2 Nordic Journal of Human Rights 2006, p. 159 – 169

Professor Sheldon Leader
University of Essex

Ms Halina Ward
International Institute for Environment and Development (IIED)

Professor Sheldon Leader
Department of Law, Human Rights Centre
University of Essex
Wivenhoe Park

Tel: 01206 873311

Duration of Research:
March 2005 - September 2007