BNDES and Human Rights / by Mark Langevin The Conectas Direitos Humanos (Conectas Human Rights) is a São Paulo based international non-governmental organization (NGO) that defends and promotes universal human rights in the Global South (Africa, Asia and Latin America). Conectas uses a range of measures to promote human rights such as advocacy, strategic litigation, utilization of the United Nations framework and regional human rights mechanisms, the production and dissemination of information pertaining to human rights, capacity building measures for human rights defenders, and cooperation with other human rights agencies and organizations.

In August of 2014, Conectas released the publication Development for People? BNDES Financing and Human Rights (as translated from Portuguese to English by author); the report of this organization’s investigation of the Brazilian National Economic and Social Development Bank (BNDES) and its contribution to human rights. The BNDES is not only an important financing resource for Brazilian development projects because it accounts for 75% of long term credit loans to the Brazilian private sector and 20% of all Brazilian investment, but it is also one of the largest development banks in the world.

Conectas argues that the BNDES’ policies and loan programs have attracted much attention because of the bank’s impact upon human rights. Many of its projects have been accused of human rights violations such as slave and child labor, disregard for indigenous land rights, and environmental degradation. Conecta’s analysis and recommendations for the BNDES are based on the premise that since the BNDES is a large and important part of Brazil’s economic structure so it is essential that the bank improve its sensitivity to human rights for the sake of sustainable development. These recommendations are based on three pillars: transparency and access to information about the BNDES and its projects, the participation of people directly affected by projects in each stage of planning and execution, and the implementation of human rights and socio-environmental policies within the Bank.

Conecta’s publication comes at a crucial time for Brazil and the future of the BNDES. Brazil’s presidential election campaign is coming to a close on October 26th and the two candidates, Dilma Rousseff of the Workers Party (PT) and Aécio Neves of the Brazilian Social Democratic Party (PSDB) offer two distinct approaches to public investment and the future of BNDES. Under the Workers Party governments of former President Lula and current President Dilma Rousseff, state controlled banks, such as the BNDES, play a key role in shaping economic development and propelling national comparative advantages across distinct sectors. Under former President Fernando Henrique Cardoso of the PSDB, the BNDES was used to provide public financing to private sector groups involved in the privatizations of state owned enterprises (SOEs) during much of the 1990s.  Neves has signaled, largely through his economic advisor, Arminio Fraga, that he will likely reflect his party’s liberal bent and interest in pulling back from public investment through the BNDES if elected to the presidency. The question, implied by the Conectus report, is whether either candidate will manage BNDES to advance the defense and promotion of human rights in Brazil during the coming four years.

For Conectus and its report, Development for People? BNDES Financing and Human Rights, the BNDES offers a policy and programmatic framework to advance the cause of human rights, but only if its recommendations of transparency, community engagement in the loan making process, and greater attention to advancing environmental sustainability are adopted and effectively implemented. For those interested in the BNDES and human rights, Conectus offers an important contribution to our evolving understanding of the nexus of human rights and public finance.

Posted by Clara Clemente Langevin

Oct. 19, 2014