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Social Due Diligence in the Austrian Export Promotion Procedure

Recommendations for implementing the revised OECD “Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence” as adopted on 28 June 2012

Fabiane Baxewanos / Werner Raza

Wien, Mai 2013

Since 2001, national export credit agencies - in the case of Austria the Oesterreichische Kontrollbank (OeKB) - are obliged to assess the environmental impacts of large projects (especially in the fields of infrastructure, mining and industry) pursuant to the OECD Common Approaches on the Environment and Export Credits before granting official export support. In addition to the ecological impacts of these projects that have been severe in some cases, their social impacts have increasingly come to public awareness in recent years. As illustrated by cases such as the Ilisu Dam project that has attracted considerable media attention, such projects can have serious impacts on the situation of workers that are involved in the realization of the project as well as on the local population, for example by large-scale resettlements. Such impacts do not only often cause losses in income and general social welfare but also human rights violations, for example if resettlements are enforced without consultation and adequate compensation, or even by use of disproportionate state force. For the workers affected by the project, non-compliance with safety measures on construction sites can entail health risks and work accidents or the violation of fundamental worker's rights (like the ILO Core Labour Standards), e.g. if trade unions are being constricted or prohibited.

In reaction to these discussions, the OECD on 28 June 2012 adopted the Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence (CA) which explicitly require a social due diligence in addition to the environmental assessment that has hitherto been provided for. The member states of the OECD Export Arrangement were encouraged to present concrete measures for the implementation of the revised Common Approaches until the end of 2012.

Given this upcoming implementation, the present study proposes concrete measures for implementing the revised Common Approaches in the Austrian export credit system. In doing so, we define the term Social Due Diligence against the background of internationally recognized civil and political as well as economic, social and cultural human rights. The law of state responsibility, which - inter alia - regulates the responsibility of states to comply with human rights, serves as the legal basis for the implementation of the social due diligence in the Austrian export credit system. Furthermore we use the Guiding Principles on Business and Human Rights, developed by the UN Special Representative John Ruggie and adopted by the UN Human Rights Council in 2011, as a normative frame for operationalizing corporate responsibility for human rights. The Guiding Principles are built on three elements: the obligation of states to protect against human rights violations by private actors (including corporations) (state duty to protect), the responsibility of private enterprises to respect human rights (corporate responsibility to respect), and the states' duty to ensure effective access to remedies (access to remedy).

On the basis of this human rights approach the present study formulates options for implementation on two different levels. On the one hand, we suggest institutional reforms. On the other hand, we propose a range of operational measures. Reforming the institutional elements of the Austrian export credit system is necessary to guarantee compliance with basic human rights principles such as transparency, participation and non-discrimination. Our recommendations particularly focus on (i) legislative measures to provide for the material and procedural principles of the export credit system in a transparent way, (ii) guaranteeing coherence with other policy fields, and (iii) the introduction of new independent monitoring/evaluation and complaints mechanisms.

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