Foreign Relations of the United States, 1977–1980, Volume II, Human Rights and Humanitarian Affairs

139. Report Prepared by the Interagency Group on Human Rights and Foreign Assistance¹

Washington, April 30, 1978

REPORT OF THE INTERAGENCY GROUP ON HUMAN RIGHTS AND FOREIGN ASSISTANCE CONCERNING THE EFFECTIVENESS OF U.S. HUMAN RIGHTS ACTIONS IN THE INTERNATIONAL FINANCIAL INSTITUTIONS

Pursuant to PD/NSC–30,² the Interagency Group on Human Rights and Foreign Assistance submits this report on the effectiveness of recent U.S. actions in the international financial institutions (IFIs) concerning human rights. As provided in the PD, this report deals specifically with:

—Congressional attitudes and prospective legislation;

—views of other nations as to the propriety and legality of our actions; and

—the effect of our actions on the advancement of U.S. human rights objectives.

Before examining these particular subjects, it will provide context to take an overall look at the human rights actions the U.S. has taken in the IFIs since January 1977 and to consider briefly the process by which these actions have been determined.

I. Overview

In general, we have been moderate in using our voice and vote in the IFIs in behalf of human rights. Of the over 500 loans that have been voted upon in the IFIs since January 1977, we have voted against only 10 and abstained on only 17 on human rights grounds. All of these loans were approved over our objection, although in a few cases we received support from other countries. In addition, we have sought to defer consideration of about 20 loans pending human rights developments in the countries in question; in several of these cases, the deferrals were only temporary. That the number of loans the Interagency Group has recommended for approval greatly exceeds the number as to which abstention or opposition has been recommended results from three principal factors: (a) many proposed recipients of IFI assistance have good or improving human rights records; (b) a large proportion of IFI assistance is designed to serve basic human needs; and (c) we have confined the use of our vote to instances of serious and continuing violations.

The countries that applied for the loans as to which we cast negative votes, abstained, or obtained postponements number only 13, as follows:

No Votes	Abstentions	Postponed
Argentina (3 loans)	Argentina (5 loans)	Argentina (2 loans, on both of which we subsequently abstained)
Chile (2 loans)	Benin (2 loans)	Chile (2 loans, one of which we subsequently voted against)
Paraguay (2 loans)	Central African Empire (1 loan)	El Salvador (1 loan, which we subsequently voted for)
South Yemen (1 loan)	Ethiopia (3 loans)	Korea (1 loan, on which we subsequently abstained)
Uruguay (2 loans)	Guinea (1 loan)	Nicaragua (5 loans, one of which we subsequently voted for)
	Korea (2 loans)	Paraguay (8 loans, one of which we subsequently voted against)
	Philippines (3 loans)	Uruguay (2 loans, both of which we voted against)

While this report pertains to our actions in the IFIs, it is important to note that we have also taken steps on human rights grounds with respect to bilateral development assistance, PL 480 food aid, security assistance, export licenses for commercially supplied military equipment, Ex-Im financing, OPIC activities, and CCC credits. In addition, of course, we have used the full range of our diplomatic tools, including direct diplomatic contacts, public statements, symbolic acts, consultations with allies, cooperation with non-governmental organizations, and work with international organizations. These steps have involved the 13 countries mentioned above, as well as others. There is usually a variety of views within the Interagency Group on whether the mix of our actions concerning any particular country has been optimal.

We are committed to the proposition that it is preferable to use positive actions (“rewards”) and representations through normal diplomatic channels rather than “sanctions” in pursuing our human rights objectives. Along this line, we are intensifying efforts to direct a growing share of our bilateral economic assistance to governments that show respect for human rights. We are also quietly encouraging the IFI managements to channel their lending to countries with good human rights records and to programs that serve basic human needs. We have urged friendly nations to join us in conveying this message to IFI managements. These nations also consider this approach to be preferable to invoking sanctions. The absence of universally agreed upon criteria, the long lead time for project development, and some resistance on the part of bank managements and some members indicate that channeling IFI resources on the basis of respect for human rights and meeting basic human needs will be a long-term process, the result of which will not be evident for some time.

While we believe that greater emphasis on “rewards” rather than “sanctions” can lead to beneficial results, the fact remains that, in addition to the thrust of our human rights policy, we are explicitly required by federal statutes to oppose certain grants or loans to human rights violators.

II. Process

Our efforts to implement this human rights policy and legislative requirements are the result of deliberations by the Interagency Group on Human Rights and Foreign Assistance. The Group has met regularly since April 1977 when it was established pursuant to a NSC directive.

As set forth in that directive, the Group has been chaired by a representative of the Secretary of State (i.e., the Deputy Secretary) and has included representatives of the Treasury Department, the Defense Department, the NSC staff, and the Agency for International Development. Participants in the Group’s deliberations have also included representatives of the Agriculture Department, the Commerce Department, the Ex-Im Bank, and OPIC. In addition, Treasury’s representatives have usually been accompanied by the U.S. Executive Directors to the World Bank and the Inter-American Development Bank. Thus, several agencies, each with an interest in the subject matter, are represented at every meeting.

The Group is aided significantly by its staff-level working group. The working group screens all upcoming bilateral and multilateral programs and loans for their human rights implications, including whether they would benefit the needy. The working group recommends approval of the vast majority of the matters it reviews, either because of the proposed recipient’s favorable or improving human rights record or because the proposed assistance would benefit the needy. When there is disagreement on these issues or where there is consensus that the human rights record of a proposed recipient is so bad as to warrant opposing or deferring the assistance in question, the working group refers the matter for review by the Interagency Group. (The Interagency Group also has the option of reviewing matters which the working group has recommended for approval.)

Prior to each of its meetings, the Group receives extensive agenda materials. These materials include detailed descriptions of the loans or grants to be considered, including consideration of whether the proposed assistance would benefit the needy. The agenda materials also include extensive information on human rights conditions in the countries proposed as recipients of assistance. In addition, other fundamental U.S. interests with respect to the country in question are described since the Group pays close attention to the relationship of our human rights concerns to other critical U.S. objectives. The agenda materials also include a list of other U.S. or multilateral assistance to the proposed recipient which is likely to be presented for decision in the near future, as well as a description of previous U.S. actions concerning the human rights situation in the country in question.

At the Group’s meetings, each loan or grant on the agenda is separately considered. The representative of the relevant State Department regional bureau leads off the discussion with an assessment of our bilateral relationship with the recipient country, of the human rights situation there, of our human rights and other objectives, and of the role our position on the loan or grant under consideration might play. In short, the regional bureau representative sets forth a strategy for dealing with the country in question and suggests tactics that would carry out that strategy. Comments are then called for by other participants. Typically, the discussion will focus not only on the current situation but also on whether there is a genuine trend toward or away from improvements in human rights conditions.

After discussion, the Group frequently recommends that the loan or grant should be approved: because human rights conditions in the recipient country are good or are authentically improving; because other means can and should be used for the time being to indicate our human rights concerns; or because the assistance will benefit the needy. When appropriate, the Group may advise that the approval should be accompanied by a diplomatic demarche explaining our human rights concerns and making it clear that we are seriously taking human rights considerations into account in our foreign assistance decisions. In general and where possible under applicable law, we prefer to discuss our human rights concerns through diplomatic channels before taking any steps with respect to foreign assistance.

When the human rights situation in the proposed recipient country is poor and not improving, the Group may recommend that the U.S. not support the proposed assistance. This will particularly be the case where the assistance will not be likely to benefit the needy. In these circumstances the Group will frequently recommend that a diplomatic demarche be made to the government concerned, explaining our position and urging human rights improvements.

The Group stays abreast of human rights developments in the countries receiving U.S. foreign assistance and has on a number of occasions recommended approval of loans or programs as to which it had previously recommended opposition, abstention or deferral.

Needless to say, for a variety of reasons, including the range of human rights violations, no automatic formula can be applied to decide how to vote on particular loans to particular countries, and inevitably seeming inconsistencies will appear. But the Group has learned that the diversity of cultures, the different stages of economic and political maturity, and the range of fundamental U.S. interests make it essential to treat each country on the merits of its own situation and not to attempt to pursue our human rights objectives in precisely the same way as to all countries. Within the limits of applicable law, we are primarily concerned with taking steps that are most likely to promote human rights in a particular situation. In short, tactics must differ from country to country, but our goal—to enhance respect for human rights—remains constant as to all countries.

The Group is continually examining its own procedures to determine how best to improve its operation and effectiveness. The Group is conscious that in systematically bringing human rights considerations to bear on the range of our foreign assistance decisions, it is performing a new function. Inevitably, performance of this function has at times been controversial, as the various participants grow accustomed to the new situation. Nevertheless, we believe it is an important function that must be performed if we are to comply effectively with statutory commands and to be true to our human rights commitments.

With respect to possible improvements in the process, the Treasury Department believes it would be useful to attempt to develop comprehensive human rights strategy papers for some of the major human rights problem countries. In Treasury’s view, such papers could analyze three key issues: our specific human rights objectives in such countries, the relationship between human rights objectives and other U.S. national objectives, and the effectiveness of the various policy instruments which can be used to further the human rights effort. Treasury stresses the importance of making individual decisions on whether the U.S. should support or oppose prospective IFI loans in the context of a comprehensive strategy and believes this can produce more options for influencing situations well in advance of a specific IFI vote. While agreeing on the importance of strategies to guide particular decisions, some other members of the Group, including the State Department, believe that human rights situations in other countries are so constantly in flux that written studies quickly become outdated and are therefore not as useful as the oral strategy presentation noted above.

To minimize seeming inconsistencies in our use of sanctions in the IFI’s, Treasury notes the desirability of being more selective in opposing loans by establishing a clearer set of criteria (e.g., confined to rights of the person) for invoking those sanctions and for excepting loans that meet basic human needs, and by limiting the use of our opposition to clear-cut situations of gross violations where the U.S. is most likely to be supported by other member governments. In the State Department’s view, the criteria governing decisions to abstain on or vote against IFI loans on human rights grounds are those set forth in the statute and they must be applied in a manner that takes into account the differing circumstances of, and our multiple interests with respect to, individual countries. (It should be noted that in the case of each abstention or no vote there were significant violations of the rights of the person in the proposed recipient country.) As for the criteria for defining loans that serve basic human needs, they are being evolved on a case-by-case basis, in light of the legislative history of the relevant statutory provision concerning basic human needs. With respect to limiting the use of sanctions to certain countries, the State Department believes there can be little doubt that the governments of the countries listed above (p. 2) are (or were at the time of the vote) engaged in serious violations of human rights, some in greater degree than others.

Finally with respect to the Group’s process, it has become increasingly clear that when a convincing case is made that a given loan or project will directly benefit the needy by serving their basic needs, assistance should be approved in all but the rarest instances. Since we consider each loan and project on its merits, we see no need to exclude the possibility that extraordinary circumstances might warrant the delay or possible disapproval of a basic human needs loan, but this would clearly be the exceptional case. At the same time, it is essential that other countries understand (and we are so advising them) that our approval of basic human needs loans is not an expression of approval for the human rights practices of the recipient government.

III. Congressional Attitudes and Prospective Human Rights Legislation

There is broad support in Congress for giving human rights concerns a high priority in our foreign policy. A growing coalition of liberals and conservatives is prepared to push new human rights initiatives. The liberals have a concern for human rights and basically support the IFIs and foreign aid. Some of the conservatives, while also concerned about human rights, are essentially anti-IFI and anti-foreign aid and many see human rights legislation as an indirect means of reducing aid.

There are no signs that Congress is having second thoughts about the Harkin Amendment which requires that the U.S. oppose IFI loans to governments engaged in a consistent pattern of gross violations of internationally recognized human rights, unless such assistance is directed specifically to programs which serve the basic human needs of the citizens of such country.

At the same time, there has been some confusion in Congress as to the Administration’s efforts to carry out this legislation and as to the Administration’s human rights policy generally. A common criticism on the Hill is that the Administration has been inconsistent in applying its human rights policy, giving harsher treatment to small countries where we have little security or economic interests, while applying a different standard to those countries which are important to us. Another argument heard on the Hill is that our human rights policy is jeopardizing “more important U.S. interests.” Some members have argued that moral suasion and arousal of world opinion are more effective in achieving human rights progress than “sanctions,” including opposition to IFI loans. Others are troubled about how our human rights policy is applied to a particular country or region, even though they support its application elsewhere. In connection with these criticisms, many questions have been raised as to the mandate and functions of the Interagency Group on Human Rights and Foreign Assistance.

In response to this situation, we have in recent weeks made a concerted effort to explain our human rights actions more fully to the Congress. We have sent to large numbers of interested congressmen and senators a detailed memorandum on the Interagency Group. This memorandum sets forth the statutory framework within which the Group operates, explains the mandate and composition of the Group, and describes the Group’s proceedings.³ Congressman Zablocki has had this memorandum printed in the Congressional Record and, in general, we have had a very favorable response to it. In addition, we have begun a series of consultations with Congressmen particularly interested in human rights issues. In this connection, we have arranged small breakfasts and luncheons where relevant human rights issues, including our actions in the IFIs, can be fully discussed.

In our consultations with Congress, we have explained that in view of the diverse circumstances of the countries proposed as recipients of assistance—as well as the diversity of our foreign policy interests—it is inevitable that we will pursue our human rights objectives in somewhat different ways as to different countries. As for the claim that we have been too prone to use “sanctions,” we have explained the facts set forth above which show that we have been quite moderate in the use of “sanctions.” With respect to objections from Congress about our treatment of particular countries, we have made a special effort to explain our rationale and actions to the members who have raised a question. While it would be inaccurate to say that our explanations are always considered satisfactory, it has been our experience that a sincere effort to explain our position fully has led to increased understanding.

Concern has also been expressed in Congress about the Administration’s efforts to block certain restrictive human rights amendments. Some members feel the Administration’s efforts have been too late and poorly coordinated. Several members have indicated that they do not plan in the future to support the Administration’s efforts to block popular human rights legislation since they think those efforts are likely to be futile. We have been advised by one congressman who is a strong supporter of our human rights initiatives that it would be preferable for the Administration to deal with proposed human rights amendments while bills are still in committee or in conference rather than when they reach the floor. He argues that once the bills reach the floor, it is much more difficult to defeat an amendment. Thus, he has urged that the Administration should let human rights supporters in Congress know as soon as possible which amendments or parts of amendments the Administration can and cannot live with. We believe this is sound advice and are taking steps to implement it to the degree feasible. It must be noted, however, that in a variety of instances in the past we have made our views clear in committee—and worked out desirable language there—only to have such understandings rendered moot by floor revisions.

We have been advised that a great many human rights amendments may be offered this year in committee or on the floor. Thus far, however, there have been only a few proposed amendments and initiatives as set forth below. Some of them pertain to the IFIs; others to other forms of U.S. assistance:

—The Young Bill (H.R. 11098):⁴ On April 5 Congressman Bill Young of Florida, the ranking minority member of the Foreign Operations Subcommittee of the House Appropriations Committee, introduced a bill requiring that the U.S. seek to modify the charter of the IFIs to require that each institution establish a human rights standard to be considered in connection with every application for assistance. The bill would also require the President to report to Congress within three months actions taken to gain acceptance of such amendments of the IFI charters. It is not clear how much support this proposal will receive in Congress. On the merits of the proposal, we believe any such effort to amend the IFI charters would arouse enormous controversy within the institutions and generate great bitterness towards the U.S. Under present arrangements, U.S. efforts to bring human rights considerations to bear in the IFIs, while resented by several IFI members, are not being actively opposed, and in some instances they are being actively supported by likeminded governments. If, however, the U.S. takes the major step of seeking an amendment in the IFI charters, what is now tacit opposition from some governments would likely become vigorous and sustained opposition that could have a deleterious effect on the functioning of the institutions. The fact that some IFI members would oppose any such effort is not dispositive. But since it is not apparent that such charter revisions are necessary in order to take human rights actions in the IFIs, there would appear to be no countervailing benefit in the course the Young bill requires.

—Human Rights Reports: We have reason to believe that several conservative members of Congress will introduce legislation requiring that the Administration submit reports on human rights conditions in all countries that receive IFI loans (currently we are required to submit such reports on countries that receive bilateral U.S. economic and military assistance). Approximately 50 additional reports would be required. Some countries, especially Brazil, would be likely to react quite negatively to our submission of such a report. The Administration has opposed this legislation.

—Harkin Amendment: Witteveen Facility. Over Administration opposition, the House passed on February 23 by a voice vote a Harkin amendment to the Bretton Woods Agreement Act.⁵ The amendment would require the U.S. Executive Director of the IMF to initiate consultations to encourage the IMF to formulate stabilization programs which foster investment and employment, especially where designed to meet basic human needs. The U.S. Executive Director would also be required to take all possible steps to see that the Witteveen Facility does not contribute to the deprivation of basic human needs and the violation of basic human rights and to oppose any loans that would contribute to such deprivations or violations. Finally, the Secretary of the Treasury would be required to prepare an annual report evaluating the effects of the Witteveen Facility on the ability of the poor to obtain (a) an adequate supply of food, (b) shelter and clothing, (c) public services, including health care, education, clean water, energy resources and transportation; and (d) productive employment that provides a reasonable and adequate wage.

The Senate version of this legislation has been reported by the SFRC and the Committee on Banking, Housing and Urban Affairs. The bill includes no human rights provisions at present, although a Harkin-type amendment could be added on the floor. State and Treasury are currently reviewing what position to take if such an amendment is introduced, as well as what position to take in conference.

—Harkin Amendment: OPIC. On February 23, 1978, the House added a Harkin amendment to the Overseas Private Investment Corporation (OPIC) Act of 1977, by a vote of 191 to 76. The report, including the entire Harkin amendment, was adopted by the Senate on April 5 and by the House on April 11. The amended OPIC legislation was signed by the President on April 24.⁶

The principal effect of the Harkin amendment is to apply Section 116 of the Foreign Assistance Act to OPIC. Section 116 requires that no assistance be provided to any country which engages in a consistent pattern of gross violations of internationally recognized human rights, unless the assistance would directly benefit the needy. The amendment also calls for OPIC to take into account in the conduct of its programs in any country (in consultation with the Secretary of State) all available information about the observance and respect of human rights in such countries. Finally, the amendment establishes the following new reporting requirements. First, OPIC must include a description of any project for which it has refused to provide insurance, reinsurance, guarantee, financing or financial support because of the human rights provisions of the amendment. Second, OPIC must include a description of any project for which it has approved such assistance due to a determination that the project either meets basic human needs or because the President has decided that approval is in the national security interest of the United States.

—Institute for International Human Rights. Congressmen Dante Fascell and Donald Fraser have introduced legislation establishing an independent federal agency—the Institute for International Human Rights.⁷ The institute would primarily provide financial and other assistance to private individuals or groups working to promote human rights, including individuals or groups in foreign countries. Specifically, the institute would provide financial support for a number of non-governmental organizations and individuals for such purposes as conducting conferences, publishing books and articles, carrying out research and studies, and supporting legal defense for victims of political persecution. The bill is expected to receive wide support. The Administration has expressed the view that such an institute, if carefully structured, could make a valuable contribution to efforts on behalf of human rights but that certain questions must be seriously addressed in considering creation of such an entity.

— Humphrey Bill. The bill to establish the International Development Cooperation Administration (or Humphrey Bill) as introduced by Senator Sparkman on January 30, 1978, includes with no significant changes the human rights provisions of Section 116 of the existing Foreign Assistance Act (i.e., no aid to gross and consistent violators unless it would benefit the needy).⁸ The human rights provisions in the bill are intended to apply to all forms of foreign assistance covered by the bill. While the Administration will be making a variety of proposals and suggestions related to the purposes of the Humphrey Bill, it does not presently appear that these will pertain to the bill’s human rights provisions.

—The Tsongas Amendment to the Ex-Im Reauthorization Bill. On April 13, the International Trade Subcommittee of the House Banking Committee adopted the Tsongas Amendment to the Ex-Im Bank Reauthorization Bill. The operative language of the amendment reads:

“In no event shall the bank guarantee, insure, or extend credit or participate in any extension of credit to the Republic of South Africa unless and until the President determines that significant progress toward majority rule has been made in the Republic of South Africa and transmits to the Congress a statement describing and explaining the determination.”

It is not unlikely that the amendment will be accepted by the full Committee and ultimately on the House floor.⁹ The Administration, which already has the authority to do what the Tsongas amendment directs, opposed the amendment on foreign policy flexibility grounds. What position the Administration should now take is under review.

IV. Views of Other Nations on the Propriety and Legality of our Actions

Other nations have commented on U.S. human rights actions in the IFIs during normal diplomatic contacts, as well as during special consultations on this issue that we have conducted with the governments of Canada, the United Kingdom, the Federal Republic of Germany, Sweden, Denmark, France, Belgium, Japan, Australia, and India, and with the European Commission. We hope to have consultations of this kind in the near future with other governments, including Senegal, Kenya, Venezuela, Costa Rica, and others.

IFI donors have reiterated several themes when discussing human rights and the IFIs with us. There is agreement among those consulted thus far that human rights concerns should be taken into account in the IFIs. They place the same high value on human rights as we do. With different foreign policy agendas, however, no two countries will always make the same choices between human rights and other pressing concerns.

There is also agreement that the manner in which human rights concerns are taken into account in the IFIs should not endanger the integrity or viability of the institutions. There is concern that unless the human rights issue is handled carefully, it could cause the IFIs to become highly politicized and to lose their effectiveness in promoting development.

There is also concern that human rights not become a North/South issue. Towards this end, we and other donors agree that it would be desirable to have consultations with LDCs such as those we have held with the donor countries. As noted above, we plan to have consultations on this subject with certain LDC’s in the near future. Other donors have also suggested that discussions on human rights among executive directors in the IFIs should be held outside of the IFI board meetings in order to minimize confrontations.

Several countries with whom we have consulted noted the desirability of not letting the IFIs become the “cutting edge” of human rights policy. Canada, the UK and the FRG cited the need for actions in the IFIs to be consistent with a country’s bilateral assistance program, and France pointed to advantages of using bilateral contacts first. German officials noted the results of pursuing human rights issues in such fora as the UN, the Council of Europe, and CSCE.

Some other governments said there may appear to be inconsistencies in their actions in the IFIs because of the varying interests they have in their relations from country to country. Some of the governments noted that actions toward different countries which may appear to be inconsistent if only human rights conditions in the countries are compared, may actually be consistent if a broader spectrum of foreign policy interests is considered.

The more narrow legal issue of whether IFI charters allow human rights to be taken into account in the IFIs has been raised both in direct consultations and in other ways.¹⁰ While donor countries with whom we have consulted often raised the issue, it seems clear to us that the broad concerns outlined above—rather than questions of legal interpretation—would be the underlying reasons why other countries might curtail the extent to which they would take human rights concerns into account in the IFIs. On the merits of the legal issue, they appeared to share our view that human rights concerns can legitimately be taken into account because economic development necessarily includes questions of equity, welfare and social justice. Consulted donors appeared to be concerned with the legal issue mainly because affected LDCs might seize upon it.

In general, it is still too early to know whether other donors will significantly increase the relative weight they accord to human rights considerations in the IFIs. Some members of the Interagency Group believe there is cause for optimism on this issue; others are not optimistic.

We have seen some evidence that some LDCs consider our human rights initiatives in the IFIs to be both improper and illegal. They believe it is improper because it introduces a new and extraneous issue which could lead to confrontation as well as jeopardize country program levels. They argue that introducing human rights concerns violates IFI charters and thus is illegal. They claim the issue threathens the basic integrity and apolitical character of the IFIs, making it difficult to discuss development issues rationally and without posturing between donors and recipients. The issue has generated considerable controversy within the institutions, including accusations that the U.S. is politicizing them. Korea and the Philippines have considered sponsoring a “motion of regret” in the ADB Board over U.S. human rights initiatives in that bank. Nigeria and India have questioned the use of IFIs as a tool to bring about human rights improvements. Argentina may seek a legal opinion from the IDB on whether charter provisions prohibiting politicization are violated by our human rights initiatives. There have been indications that other LDCs may take similar steps.

While we believe it is legitimate to bring human rights considerations to bear in the IFIs, the reaction of various LDCs makes it clear that we must handle the issue with great—Treasury would say greater—sensitivity to ensure we do not alter the apolitical characters of the IFIs and impede their effectiveness in promoting development. Towards this end, we think it desirable to the extent feasible to implement our policies discreetly by working behind the scenes rather than generating open confrontation in the bank boards. Thus, in opposing a loan because of human rights violations, we have been making our reasons clear beforehand to the government of the borrowing country and its executive director, as well as to other governments with whom we are consulting, but have generally refrained from mentioning human rights at the board meetings.

To increase the likelihood that other countries will support us, we will be intensifying our efforts to consult with them on how to reflect human rights considerations in long-term bank lending programs in ways which would reduce the number of cases where an opposition vote of the U.S. would be required. We will also help to achieve this goal by relying increasingly on “rewards” rather than “sanctions” in furthering our human rights objectives in the IFIs over the longer term.

Some LDC’s also have argued that donor emphasis in the IFIs and elsewhere on human rights and basic human needs is, in actuality, both moral imperialism and an excuse for reducing aid. Frequently LDC’s have claimed that human rights initiatives stress observance of “Western-style” human rights, i.e., the rights of the individual and political rights. They claim this ignores basic economic rights, such as the right to be adequately clothed, fed and housed, the right to education and to adequate medical care, etc.

We believe our human rights initiatives do not warrant this criticism. We have repeatedly taken the position that our human rights policy seeks to promote economic and social rights as well as rights of the person and civil and political liberties. Our support of bilateral and multilateral assistance for the needy in countries with questionable human rights records demonstrates the importance we attach to economic and social rights.

Some LDC’s have argued that the emphasis of our assistance programs on basic human needs is designed to impede Third World industrial development. To the extent our human rights policies stress basic human needs assistance, they attract the same criticism. Needless to say, what underlies our approach is not a desire to forestall economic competition from LDCs, but rather a conviction that a stronger emphasis on basic human needs will enhance our effectiveness in promoting overall economic development.

V. The Effect of Our Actions on the Advancement of U.S. Human Rights Objectives

The United States has used a variety of policy tools to implement its human rights policy. The use of our “voice and vote” in the multilateral development institutions is only one of these tools, but one which, in certain circumstances, has been influential. IFI-related actions have normally been taken in conjunction with or subsequent to other forms of action or representation. Thus, actions in the IFIs have not become the “cutting edge” of our human rights policy.

Since, as noted above, our concept of human rights encompasses economic and social rights, we have in most instances continued to support IFI loans to countries with serious human rights problems when the loans are directed at meeting the basic human needs of the poor; at the same time, we have opposed loans to such countries for large capital and infrastructure projects. We have explained this distinction to recipient governments. In our representations we have emphasized our belief that policies which foster human rights contribute positively to economic and social development.

As for the economic impact of our actions in the IFIs, no loan has failed to be approved because of our opposition, although efforts described above to encourage other donor support may lead to the actual disapproval of loans. However, when countries have withdrawn or delayed applications for loans in anticipation of U.S. opposition, there has been a direct economic impact. (The value of all loans that have been postponed is approximately $385 million. Of that amount, loans totaling approximately $250 million were subsequently approved by the IFIs.) There has also been an economic effect in those few instances in which countries, anticipating U.S. opposition to a proposed loan, have switched the loans from the Inter-American Development Bank’s “soft lending window” (i.e., the Fund for Special Operations), where the U.S. has veto power over loans, to the bank’s “hard lending window,” where interest rates are higher and maturities shorter. U.S. actions in the IFIs on human rights may also in certain cases affect a country’s credit-worthiness in the eyes of commercial lenders.

As our actions in the IFIs are almost always accompanied by other actions or representations, a direct relationship cannot be shown between our actions in the IFIs and specific human rights developments in other countries. More basically, we have generally tried to avoid linking particular actions on our part—in the IFIs or in any other context—to particular human rights improvements in the recipient country. This kind of quid pro quo approach to human rights, while it has a superficial appeal, would in our judgment tend to permit and perhaps even encourage other countries to engage in cosmetic human rights changes designed to fetch a particular response from us. If, for example, we made it plain to a country that we would support IFI loans if a substantial number of political prisoners were released, it is possible that the country would detain prisoners for the purpose of subsequently releasing them in order to satisfy the condition we had laid down. This type of manipulation is an inherent risk of a quid pro quo approach.

This is not to say, however, that because we have resisted the notion of trading specific actions on our part for specific human rights improvements elsewhere, any particular actions on our part can fairly be characterized as ineffective. It is necessary to consider all the steps we have taken to promote human rights. We think it is clear that the totality of our actions—including our actions in the IFIs—has increased the costs of repression and helped to create an atmosphere in which human rights progress is more likely to occur. Our actions have brought about a very substantial increase in world awareness of human rights issues. This new consciousness not only helps curb existing human rights abuses; it also acts as a deterrent to new violations.

While it is not possible to say that any particular step we have taken has led to any particular result, it is probably the case that if we appeared to be reluctant to bring human rights considerations to bear in a prominent context—such as the IFIs—we would call into serious question the depth of our human rights commitment. Thus, if we are going to continue to be effective in raising human rights consciousness and nurturing an atmosphere in which human rights progress is more likely to occur, it is important that we continue to bring human rights considerations to bear in a conscientious, coherent way on all of our bilateral and multilateral assistance programs.

Even though no one-to-one relationship can be shown between our actions in the IFIs and specific human rights developments, it is useful to consider developments in each country as to which we have taken some IFI-related actions on human rights grounds. A country-by-country synopsis is included in Appendix A.¹¹ While improvements are noted for most of the countries in question, human rights problems persist in all of the countries.

With respect to possible means of enhancing our effectiveness, Treasury believes there should be a presumption that in the IFIs we will limit the use of sanctions to promotion of the “first group” of rights, i.e., rights of the person. In Treasury’s view this approach will be more likely to win support from other governments, since they will not see themselves called upon in a multilateral context to pass judgment on the political organization and structure of another government. With such added support, Treasury believes this approach could be more effective in bringing about human rights improvements in the recipient country. It will also be more effective, in Treasury’s view, because violations of rights of the person can be more readily curtailed than other types of human rights violations.

The State Department believes that to focus in the IFIs solely on violations of rights of the person would put too narrow a construction on the statutory language. It would also unduly downgrade the gravity of violations of economic and social rights and of political and civil rights. PD–30 makes it clear that all three categories of rights are the subject of our human rights policy. To downgrade these violations in the IFIs but not in other multilateral contexts would not be understood, in State’s view. State believes other countries are willing to support a human rights policy that addresses all three groups. In addition, State believes it is not possible to make meaningful generalizations about whether particular types of human rights violations are more readily remediable than others. In some cases, for example, it may be that violations of political and civil rights can be stopped more expeditiously than violations of rights of the person; in other cases, the reverse may be true.

1. Source: Carter Library, National Security Affairs, Staff Material, North–South Pastor Files, Subject File, Box 55, Human Rights: 1–5/78. Confidential. Under an April 27 covering memorandum, Oxman sent a copy of the report to the members of the Interagency Group, directing the members to forward any agency comments to him by May 1. (National Archives, RG 59, Office of the Deputy Secretary: Records of Warren Christopher, 1977–1980, Lot 81D113, Box 18, PD 30—Response (final)) Dodson also sent copies to Mondale, Vance, Harold Brown, Blumenthal, Bell, Kreps, McIntyre, Young, Gilligan, George Brown, Turner, and Reinhardt under a June 9 covering memorandum. (Ibid.)
2. See Document 119.
3. See footnote 3, Document 132.
4. The bill was referred to the House Committee on Banking, Finance, and Urban Affairs. Young subsequently introduced identical versions of the bill—H.R. 12660 and H.R. 13161—on May 10 and June 15 respectively. Each bill, in turn, was referred to the House Committee on Banking, Finance, and Urban Affairs.
5. H.R. 9214, introduced by Representative Stephen Neal on September 20, 1977, and reported to the House from the House Committee on Banking, Finance, and Urban Affairs on January 27, 1978, authorized a $1.7 billion U.S. contribution to the IMF’s Witteveen Facility. The amended H.R. 9214 passed the House on February 23, 267 to 125. (Graham Hovey, “House Authorizes $1.7 Billion Outlay to Witteveen Fund,” The New York Times, February 24, 1978, pp. D–1 and D–7)
6. Reference is to H.R. 9179, the OPIC extension legislation, which the House revisited on February 23; see footnote 7, Document 108.
7. See footnote 2, Document 126.
8. See footnote 17, Document 245.
9. Tsongas’ amendment was retained in the versions of the Ex-Im extension legislation passed in the House on May 4 (H.R. 12157) and the Senate on May 15 (S. 3077). Owing to veto threats by the administration, the House and Senate leadership opted to jettison H.R. 12157 and S. 3077 and add “non-controversial” Ex-Im provisions, including Tsongas’ prohibition against lending to South Africa, to a more-encompassing international financial institutions bill (H.R. 14279), cleared by Congress for the White House on October 15. (Congress and the Nation, Volume V, 1977–1980, pp. 63 and 256–258)
10. The Charter of the IBRD provides in pertinent part that the “Bank, its officers and employees should not interfere in the political affairs of any member, nor shall they be influenced in their decisions by the political character of . . . [the recipient government]. Only economic considerations should be relevant to their decisions. . .” The charters of the other IFIs contain comparable provisions. [Footnote and brackets in the original.]
11. Appendix A, “Synopsis of IFI-Related Human Rights Actions by Country,” is attached but not printed.