The Government’s IMF agreement and the UN Human Rights Council

In a few days, the first UN human rights assessment of President Ranil Wickremesinghe’s tenure so far as head of state, will be unveiled in Geneva, contained among other things in the Report of the High Commissioner for Human Rights. What is clear is that Wickremesinghe is a lot less concerned with human rights now that he is President, than he appeared to be when he was Opposition leader or even Prime Minister. This will undoubtedly be reflected in the High Commissioner’s report.

Last Sunday’s newspapers informed the public that the High Commissioner’s report had been already sent to the GoSL for comment. It was also reported that arbitrary arrests of protest leaders under the PTA, violence against protesters and accountability for economic crimes (a new category), had been added in what is billed as a “scathing report”. This will certainly feed into the “tough new resolution” on Sri Lanka that the US and the core group are reportedly drafting. 

If anyone were to think that the UN Human Rights Council’s attention was limited to the above violations of civil and political rights, they would be wrong. Corruption, illicit money flows, debt restructuring negotiations with international financial institutions, and the conduct of the institutions themselves, such as the IMF and the World Bank, have also come under its scrutiny and several resolutions, reports and recommendations have been issued to confront these violations.

In this context, Wickremesinghe’s agreements with the IMF and any policies that flow from them leading to specific violations of human rights as a result of austerity measures will be of interest to the Council for which both the GoSL and the relevant international financial institution could be held legally responsible.  

Arbitrary arrests

There was a disturbing inversion recently at the event to celebrate the 70th anniversary of the Sri Lanka Police Force, a grand celebration at which President Wickremesinghe was the chief guest. The Police Chief in his speech went to great lengths to reiterate the human rights obligations that the police have to respect when dealing with the public including at protests. In contrast, the President in his address, acknowledged the accusation of repression against protesters and asked, “What choice do we have?”, proceeding to justify it, heaping praise on the police for ‘saving’ the Parliament from a non-invasion by a relatively modest crowd of agitators gathered on the road which leads to it. 

The recent mode and method of the arrests by the police were widely condemned by much of society. The UN Human Rights Council has clarified that in the case of arrests “Arbitrariness is not to be equated with ‘against the law’, but must be interpreted more broadly to include elements of inappropriateness, injustice, lack of predictability and due process of law.” [OHCHR | About arbitrary detention] As such, the abductions and the arrests of protesters under the PTA by the Police, as well as the detention orders signed by the President will be noted at the Human Rights Council with grave concern. 

Corruption and illicit financial flows 

The UN Human Rights Council’s Report on Corruption and Illicit Financial Flows reveals that “Corruption and related financial flows do not only undermine States’ ability to mobilize resources for financing sustainable development and for realizing human rights. 

They also weaken state institutions and undermine the rule of law and the functioning of the criminal justice systems.” It also says that since 2010 “US$ 9.7 billion in corruption proceeds have been either frozen, seized or confiscated in their destination country – or returned to the country where they were stolen.” (Combatting corruption and illicit financial flows | OHCHR) 

This seems paltry when compared to amounts that are rumoured to have left Sri Lanka as proceeds of corruption. The IMF delegation in Colombo said at a recent press conference that their conditions include the minimising of corruption vulnerabilities in line with the UN Convention Against Corruption, indicating their own misgivings. 

As economic recovery measures resulting in austerity including the IMF agreement and its conditionalities unveil, corruption will assume a larger significance in the minds of the citizens, and the Council’s recommendations for possible asset recovery become more relevant. When the people have to bear the brunt of austerity measures, the demand for the return of the spoils of corruption will become more strident.     

Austerity measures

The UN Human Rights Council has been seriously concerned with austerity measures imposed by international financial institutions “such as the IMF” [A/74/178 - UN Independent Expert on foreign debt and human rights, Juan Pablo Bohoslavsky]

In his Report presented to the UN General Assembly dated July 2019 he said that: “Even though austerity can be a useful tool of administration against the squandering of resources, it is essential to keep in mind that austerity impacts different social groups in very different ways, especially the most vulnerable and marginalized.” 

His Report also holds international financial institutions responsible “if they are complicit in prescribing policies with probable negative impacts on human rights”. The expert asks: 

“If international financial institutions can be made responsible for the preventable damage caused by a dam built with their funding, why should they not be responsible for the preventable human rights harm to people caused by regressive economic policies?”

IMF agreement 

The Government of Sri Lanka has just concluded a staff level agreement with the IMF. The Opposition has demanded that details of the agreement be revealed to Parliament since it has yet to be updated on the conditionalities contained in the agreement. This demand is in line with the UN recommendations on agreements with International Financial Institutions. The UN Expert on Foreign Debt says:

“People have a right to fiscal information. Civil society organizations note that, in order to maintain sovereign economic policymaking, agreements with IMF must undergo parliamentary scrutiny or the constitutional recourse available nationally. This will safeguard the space to manage public debt in a way that does not hinder the improvement of conditions that guarantee the enjoyment of human rights. States must ensure that debt related decision-making processes and agreements are open to informed and inclusive public debate, including the participation of groups historically excluded from political representation in debt and fiscal decision-making processes. [A/76/167, 4th Aug 2021]

The Report warns that:

“…More than 12 per cent of conditionalities were related to the privatization of State-owned enterprises, labour issues (public and private sector), institutional reforms and poverty reduction policies (the privatization of State-owned enterprises being the most common, followed by labour issues).” 

This is all the more reason that Parliament needs to see the small print. 

The UN Expert recommends that: 

“The terms of their transactions and their proposals for reform policies and conditionalities for financial support do not undermine the borrower/recipient State’s ability to respect, protect and fulfil its human rights obligations: this includes identifying and avoiding economic reforms policies that would have negative implications for the enjoyment of human rights, in particular of those in the most vulnerable situations.”

Sustainable debt management

At the recent IMF press conference in Colombo, the IMF team’s concern and explicit stipulation about the protection of the most vulnerable groups came as a welcome surprise, as did its insistence on a political mandate. 

The UN Human Rights Council’s Independent expert on Foreign Debt reports that sustainable debt management requires “transparent legislation, policies and systems with clear roles and responsibilities for borrowing and lending, as well as managing and monitoring debt.” [A/76/167]

The Report further states that the Committee on Economic, Social and Cultural Rights has recently underscored this to some States in its monitoring function.

In 2018, it expressed concern to Argentina that “the levels of effective protection of rights had been reduced as a result of inflation and austerity measures.” 

It also referred to the agreement with the International Monetary Fund, where “the Government had set a zero-deficit target for 2019, entailing further cuts in social spending (E/C.12/ARG/CO/4)”.

In 2015, the Committee recommended to Sudan that it ensures its obligations under the Covenant in its negotiations with international financial institutions, including the International Monetary Fund (E/C.12/SDN/CO/2, para. 18.)

The Expert points out that the “United Nations country team of Lebanon also provided a position paper to IMF outlining a number of immediate and medium-term policy reforms in a number of areas, including human rights, domestic governance.”

The UN Country Team in Colombo will have its work cut out as Sri Lanka implements the various reform, restructuring and recovery measures which will cause hardship at a time when it is in deep crisis both economically and politically. Most sectors and citizens are already suffering the effects. As the crisis deepens, it may be necessary to strengthen the UN Country Team’s mandate and widen its remit to ensure that the current trend of sacrificing human rights in the name of economic recovery doesn’t escalate to the point of social and political volatility.