Human Rights Risks in the World’s Top Foreign Direct Investment Cities Assessed

According to the results of the research*, which were announced in October 2021, the social risk landscape of 575 cities with a population of over 1 million were evaluated and it was determined that 75% of the cities (426 cities in total) were in the two highest risk categories (high and extreme risk).

Within the scope of the research, social risk was evaluated under three main pillar as;

• civil and political rights,
• workers’ rights,
• poverty

and it was focused on human rights issues such as:

• the right to protest,
• violations by security forces,
• child labor,
• modern slavery and
• health and safety

In this context, it was determined that the human rights of citizens are at high or extreme risk in 38 of the top 100 cities for foreign direct investment**.

Among the 38 cities in question, it was determined that the cities that pose the greatest risk in terms of human rights are Izmir and Istanbul in Turkey. In the research, the exploitation of the workforce of refugees and migrants and the deficiencies in labor rights were noted as important issues to be considered by companies with supply chains in Istanbul and Izmir.

With data on poverty included in the assessment, it was determined that the five most risky cities among the top 100 locations for foreign investment are Hyderabad, Pune and Mumbai in India, Lagos in Nigeria and Izmir in Turkey.

• It was stated that these cities attracted a total of US$ 10 billion in global direct foreign investment in 2020.
• At the other end of the scale, London, the world’s most attractive investment destination according to Foreign Direct Investment Markets data, ranks 544th among the lowest risk cities globally.

In the overall ranking of 575 cities,

26 cities were classified as “extreme’’ risk: Mogadishu with the highest risk, followed by the Damascus, Aleppo and Homs in Syria, Pyongyang in North Korea, Sanaa in Yemen, Ketta, Karach and Lahore in Pakistan, and Hyderabad in southern India.

According to the research;

• new legislations in the fields of human rights, supply chain and sustainability of investments,
• the increasing importance given to environmental, social and governance risks

result in the scrutiny of the conduct of financial institutions in these fields.

It was also stated that social risks will play an increasingly larger role in decision-making for investors in every sector, and that social risks and human rights violations related to the activities of investors or their suppliers can lead to loss of reputation and legal sanctions for investors.