The Privatization of (Judicial) Remedies in Global Development Governance

International Organizations exert ‘public authority’ not only within the intergovernmental realm of development governance. They also contribute to the diffusion of new normative structures into the corporate sector that is central to development assistance and implementation today. In particular in large-scale energy or infrastructure projects, project sponsors and lenders increasingly often are purely commercial actors. IOs, primarily multilateral development banks, seek to influence corporate practices in the development context through norm-setting activities. The International Finance Corporation (IFC), for example, facilitated adoption of World Bank’s Safeguard Policies by commercial project finance banks via the so called Equator Principles. Among the environmental and social standards that IOs have been diffusing into the corporate sector are grievance mechanisms that receive and react to societal complaints. Just like their IO prototypes, these mechanisms differ as to whether they take a quasi-judicial form – comparable to the World Bank Inspection Panel – or are oriented more towards problem solution – like the Ombudsman function of IFC’s Compliance Advisor/Ombudsman. Recently, IO pressure to establish such mechanisms is rising. IFC’s Performance Standards or the UN Secretary General’s Special Representative for Business and Human Rights are advocating them strongly. This primarily conceptual paper looks to the IO-induced trend from a governance theoretical perspective by asking in how far these mechanisms can be understood as contributing to accountability in development governance, inquiring into the implications of ‘privatizing remedies’ for classic understandings of the state and the rule of law and into potential ramifications, if any, for the international legal system.