For the last 10 years, the World Bank has justified its position on human rights by citing the Political Prohibition Provisions of its Articles of Agreement. It has regularly claimed that the Provisions prevent it from considering human rights in its loan decisions let alone mainstream human rights in its operations. The consequences of this approach in Uzbekistan — gross human rights abuses, endemic corruption, and intractable poverty — have been well-documented by civil society, the UN, and the ILO.
While the Provisions may appear to preclude any consideration of non-economic factors, the Bank has acknowledged that there are some exceptional situations in which its international legal obligations trump the obligations imposed on it by the Articles. The peremptory force of jus cogens vis-à-vis incompatible loan agreements constitutes one such situation. As established above, the prohibition against State mobilization and use of forced labor for economic development, as defined in Article 1(b) of Convention No. 105, has attained the status of a jus cogens norm and by its operation, all of the Bank's project agreements that support any aspect of cotton production in Uzbekistan must be declared void and terminated immediately. The Bank's jus cogens obligations also require it to stop providing loans which are used in any way for Uzbek cotton production until the violation of Article 1(b) of Convention No. 105 ceases to exist. Currently, there are no mitigation measures sufficient to ensure a violation of this jus cogens norm does not occur in Uzbekistan.
The international legal obligation of the World Bank, its member States, and its officers to adhere to jus cogens requirements supersedes any policy or business considerations that may have guided their engagement with the Government of Uzbekistan. The violation of Article 1(b) of Convention No. 105, as with violations of all jus cogens norms, entails potential civil or criminal liability in national and international jurisdictions. The Bank's role as a lender, given the unique circumstances of its engagement with Uzbekistan, may not absolve it from legal accountability for its involvement in the Government's systematic perpetration of forced labor. The member States on the Bank's Board of Directors and their individual representatives should also take note of the legal liabilities they could face.
To avoid liability, the World Bank, its member States, and its officers should heed their legal obligations and institute the policy, procedural, and practical reforms needed to ensure they no longer contribute to jus cogens violations in Uzbekistan and other countries. A more forward-thinking and holistic approach to human rights will also be needed to fix the reputational damage and mission failure exemplified by the Bank's engagement with the Government of Uzbekistan.
Many of the legal and policy implications shared in this report are also applicable to the other IFIs operating in Uzbekistan and other similarly repressive countries where gross human rights violations occur on a regular basis. These lenders should be aware of the legal risks they face by engaging with repressive governments without a comprehensive human rights policy that is implemented at all levels of their operations.
Corporations, another key actor responsible for sustaining the forced labor system in Uzbekistan, should also carefully assess their legal risks when deciding whether to operate in or source their products from countries known to violate fundamental human rights norms. While the law on financial complicity is as yet unsettled, corporations and IFIs alike would be wise to take all necessary precautions to avoid potential liability, especially when the risk of harm is substantial or real. In these circumstances, it may be best for the company or IFI to refrain from entering into a financial agreement that could assist the party involved in the human rights abuse.