THE INTERNATIONAL FINANCE CORPORATION’S PERFORMANCE STANDARDS AND THE EQUATOR PRINCIPLES: RESPECTING HUMAN RIGHTS AND REMEDYING VIOLATIONS?

This 2008 submission to the U.N. Special Representative on Human Rights and Transnational Corporations, authored by the Center for International Environmental Law and partners, argues that the International Finance Corporation’s (IFC) Performance Standards and the Equator Principles (PS/EPs) fail to provide a robust framework for project sponsors to respect or remedy human rights. The report identifies critical gaps in substantive standards, due diligence procedures, and grievance mechanisms, concluding that the PS/EPs must be significantly amended to align with international human rights norms.

• The PS/EPs are widely used by international project financiers in the developing world, with over 70 percent of project finance debt in emerging market economies (US$52.9 billion in 2007) subject to the Equator Principles.
• A review of 61 projects that generated complaints from affected communities demonstrates that large-scale infrastructure and extractive industry projects can adversely impact a wide range of internationally recognized human rights. The most frequently implicated rights in the sample were the right to food (46 cases), the right to property (44 cases), and the right to life (43 cases).
• The PS/EPs largely fail to explicitly incorporate international human rights instruments. While Performance Standard 2 is partially guided by ILO and UN conventions, and Performance Standard 7 recognizes UN human rights conventions for indigenous peoples, the framework generally avoids requiring clients to adhere to international human rights conventions.
• An analysis using the Danish Institute for Human Rights’ Human Rights Compliance Assessment (HRCA) tool revealed pervasive gaps: out of 335 questions, the PS/EPs achieved full compliance ('green light') for only two and partial compliance ('yellow light') for four, receiving 'red lights' for the remaining 329.
• The PS/EPs lack specific requirements for human rights due diligence. Although they require environmental and social impact assessments, they do not explicitly mandate the assessment or management of risks to internationally recognized human rights, which may lead sponsors to overlook critical issues like discrimination or restrictions on freedom of expression.
• Project-level grievance mechanisms required by the PS/EPs lack minimum substantive or procedural standards. They are not required to be independent of the project sponsor, nor do they specify time frames for resolution or require that remedies accord with international human rights norms.

APA

Herz, S., Genovese, K., Herbertson, K., & Perrault, A. (2008). THE INTERNATIONAL FINANCE CORPORATION’S PERFORMANCE STANDARDS AND THE EQUATOR PRINCIPLES: RESPECTING HUMAN RIGHTS AND REMEDYING VIOLATIONS? Center for International Environmental Law. https://www.ciel.org/wp-content/uploads/2015/05/Ruggie_Submission.pdf

Chicago

Herz, Steven, Kristen Genovese, Kirk Herbertson, and Anne Perrault. THE INTERNATIONAL FINANCE CORPORATION’S PERFORMANCE STANDARDS AND THE EQUATOR PRINCIPLES: RESPECTING HUMAN RIGHTS AND REMEDYING VIOLATIONS? Center for International Environmental Law, 2008. https://www.ciel.org/wp-content/uploads/2015/05/Ruggie_Submission.pdf.

Wikipedia

{{cite report |last1=Herz |first1=Steven |last2=Genovese |first2=Kristen |last3=Herbertson |first3=Kirk |last4=Perrault |first4=Anne |title=THE INTERNATIONAL FINANCE CORPORATION’S PERFORMANCE STANDARDS AND THE EQUATOR PRINCIPLES: RESPECTING HUMAN RIGHTS AND REMEDYING VIOLATIONS? |publisher=Center for International Environmental Law |date=August 2008 |url=https://www.ciel.org/wp-content/uploads/2015/05/Ruggie_Submission.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{herz2008international, author = {Herz, Steven and Genovese, Kristen and Herbertson, Kirk and Perrault, Anne}, title = {{THE INTERNATIONAL FINANCE CORPORATION’S PERFORMANCE STANDARDS AND THE EQUATOR PRINCIPLES: RESPECTING HUMAN RIGHTS AND REMEDYING VIOLATIONS?}}, institution = {Center for International Environmental Law}, year = {2008}, month = aug, url = {https://www.ciel.org/wp-content/uploads/2015/05/Ruggie_Submission.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }