The UN Committee on Economic, Social and Cultural Rights (CESCR), in its latest concluding observations on the United Kingdom in July of this year, highlighted the need for more information on British Overseas Territories (OTs) and Crown Dependencies (CDs). These are a group of small jurisdictions spread across the globe in Europe, the Caribbean, South Atlantic and the Pacific whose international obligations the UK takes responsibility for. Apart from their size, their connection to the UK and the fact that most of them are islands, they are a diverse group of jurisdictions with very different social, historical and economic backgrounds.
This year, many have featured in negative coverage about their low tax status and banking secrecy following on from the revelations in the Panama Papers. But an understanding of the ESC rights issues that OTs and CDs need to grapple with requires a more nuanced approach than that and the decision by the UK to withdraw from the European Union may well have significant and unexpected consequences for them.
Impact of austerity on marginalised groups
The CESCR criticised the UK for the impact of austerity measures on marginalised groups in society. Many of the OTs in particular, like St Helena and Pitcairn for example, are extremely geographically isolated with limited transportation links. These territories often have limited resources and opportunities and are dependent on significant funding for development both from the UK Government and from the European Union to build crucial infrastructure projects for hospitals, sustainable energy and transport.
Although (with the exception of Gibraltar) they are not members of the EU, as overseas countries and territories (OCTs), they have a special relationship with the EU based on their links to the UK as a Member State. Under the 11th European Development Fund, British OTs are due to receive a total of 76.8 Million Euros until 2020. For small communities, development funding may be crucial for their continued viability. As the UK moves towards leaving the EU, the special relationship will be broken and the UK will need to look at ways of ensuring that the financial impact of Brexit on development funds for OTs is softened if it is to fulfil its obligations under the ICESCR.
Human rights impact of fiscal policy
The CESCR also highlighted the need for human rights impact assessments on fiscal policy and an intensification of efforts to address global tax abuse. For those CDs and OTs that make a living from financial services with few viable economic alternatives, fiscal policy can be an existential issue. But the politics of tax are now global as well as local and there is dwindling sympathy for tax regimes that allow international business and wealthy individuals to pay less tax at the cost of society as a whole.
The EU is currently discussing a scoreboard for jurisdictions with low or zero corporate tax on which it may seek to impose economic sanctions. That scoreboard includes 8 British OTs and CDs but would not include jurisdictions within the EU despite their potentially aggressive tax regimes. Outside the EU, the UK may struggle to ensure that its OTs and CDs do not suffer disproportionately as a result of this move. There is clearly a need for a rethink on an international level for the way fiscal policy affects economic, social and cultural rights both locally and globally. But in the midst of that debate, it is important that the rights of people who live on small islands with economies dependent on financial services are also borne in mind.
Engaging with the World
The UK needs to ensure that its international obligations under the ICESCR are met across all the territories it is responsible for, including the OTs and CDs. The result of the referendum on leaving the EU may have ripple effects for the economy and economic, social and cultural rights in the UK, but it will also have particular consequences for people in the OTs and CDs who either did not get a vote or voted overwhelmingly to remain in the EU. It is absolutely crucial that the governments of those territories assess the very real impact Brexit could have on the economic, social and cultural rights of their own people so that they are ready to engage the UK, the EU and the rest of the world with constructive proposals for the progressive realisation and full enjoyment of economic, social and cultural rights.