Global banks respond to open letter on their human rights impacts

The Thun Group of Banks has responded to a joint letter coordinated by international NGO Bank Track and co-signed by CORE and 31 other organisations, calling on the group to withdraw a paper that questions banks’ responsibilities for human rights abuses linked to finance.

The Thun Group of Banks represents 11 leading banks as part of an informal network discussing the application of the UN’s “Protect, Respect and Remedy” Framework”. In its response to widespread concerns from civil society groups, academics and UN observers, the group defended its position on banks’ human rights obligations and impacts, expressed in a paper published in January.

The discussion paper stated that banks should generally not be viewed as causing or contributing to adverse human rights impacts arising from their clients’ operations because the impact is not occurring as part of the bank’s own activities. It also states that because banks do not generally contribute to human rights impacts through their finance, they are not responsible for remediating those impacts.

This position was endorsed by Thun Group members Barclays, BBVA, BNP Paribas, Credit Suisse AG, Deutsche Bank, ING, JPMorgan, RBS, Standard Chartered, UBS Group AG, and UniCredit.

The paper contradicts advice from the UN Office of the High Commission for Human Rights published in November 2013 and has also been strongly criticised by former UN Special Representative for Business and Human Rights, Professor John Ruggie. In his response, Ruggie expresses concerns that the central elements of the UNGPs have been misconstrued and suggests this may hamper progress by individual banks.

The UN Working Group on Business and Human Rights, which supports the implementation of the Guiding Principles has also responded, calling on the Thun Group to revise the paper “in order to align it with the UNGPs.” The Working Group called on the group to develop its understanding of the UNGPs in a sector-specific context through “a process of consultation and review by other stakeholders in order to ensure accuracy, robustness and legitimacy.”

BankTrack requested that the Thun Group proceed on the basis of consultation with civil society and other stakeholders in 2013. In response, The Thun Group committed to elaborate a stakeholder engagement strategy, although it has not yet done so.