The business of displacement - who pays the price for resettlement?

Resettlement is one of today’s great human rights challenges. While wars dominate headlines, state and investor-led development projects are displacing millions of people to clear space for hydropower dams, urban development, transport and extractive projects, agribusiness, and government-backed poverty alleviation programmes, with far less scrutiny.

Research suggests 10 - 20 million people are internally displaced each year by planned projects, with some estimates indicating that as many as 300 million people were uprooted globally between 1997 and 2017.

Meanwhile, the World Bank projects that climate impacts such as droughts, floods, and sea-level rise could force more than 200 million more people to move within their own countries by 2050.

Next week's COP30 climate conference in Belém is a chance to align climate mitigation ambitions with the reality of rising displacement. And the revision of the International Finance Corporation's (IFC) Sustainability Framework, as well as forthcoming Guiding Principles on Resettlement, are opportunities to clarify responsibilities to help prevent displacement and promote a rights-based approach to resettlement when it occurs, particularly in regards to the actions of investors and business involved. 
 

For business and finance, resettlement typically remains a cost to contain, not a responsibility to uphold. Weak oversight, short project horizons, and entrenched power imbalances mean safeguards are often ignored, leaving communities to bear the heaviest costs. Families lose not only their homes but also livelihoods, cultural ties, and access to services. Host communities face added pressure on jobs, housing, and infrastructure. Displaced households often end up in precarious urban settlements, triggering new cycles of poverty, evictions, and land disputes, costs that governments and society ultimately bear. Getting resettlement right the first time is both a moral and an economic imperative.

Beyond “Involuntary Resettlement”

Unlike refugees, most people displaced by development projects remain within their own countries and under the authority of their governments. The outcomes for those displaced are shaped by national regulations, the financing choices of states, development banks and private actors, and whether responsible business conduct standards are enforced. While international standards affirm that authorities are responsible for protecting internally displaced persons, they stop short of laying out how resettlement should be planned, implemented and monitored.

For too long, the phrase “involuntary resettlement” has normalised forced displacement as an unfortunate but acceptable byproduct of development. This is the case despite evidence showing that such practices almost always result in harm. A rights-based approach makes clear that displacement should be avoided wherever possible, and where absolutely necessary, resettlement must not be treated as a narrow exercise in compensation or housing provision.

In reality, involuntary resettlement linked to planned development projects is rarely justifiable, and usually signals something has gone wrong. Development banks have introduced strong social safeguard policies, but enforcement is inconsistent, and many private investors have yet to meaningfully engage with their responsibilities. Even the IFC allows involuntary resettlement under certain conditions, without requiring comprehensive human rights due diligence by project proponents. Other finance institutions have adopted commitments, but safeguards that look strong on paper are often weak in practice, and communities face pressure to “volunteer” for relocation when no real alternatives exist.

Business and Finance Responsibility

States bear the primary duty to protect human rights. But businesses and banks that design, fund, and implement resettlement projects are decisive in shaping resettlement outcomes. Under the UN Guiding Principles on Business and Human Rights (UNGPs), companies and lenders are responsible for identifying, preventing, and addressing harms linked to their operations and investments. UN experts have called on companies to move beyond harm avoidance and reorient business models so that development benefits are fairly shared.

In practice, resettlement is too often treated as a secondary issue, an acceptable and manageable cost of doing business, a byproduct of development. The result is tragically predictable: impoverishment, marginalization, and renewed cycles of displacement.

Corruption, weak governance, and lack of political will are often blamed for failure. But businesses and lenders cannot hide behind these excuses. Responsible business conduct demands that resettlement is treated as a core human rights risk, with due diligence built in from project design to long-term follow-up.

Climate Change Magnifies the Risks

As climate impacts intensify, governments and investors are rolling out major infrastructure and adaptation projects, new dams, renewable energy grids, and coastal defences. Without enforcement of strong safeguards such as mechanisms to prevent forced displacement, these projects risk repeating old mistakes, relocating communities to unproductive land without proper consultation or support, entrenching inequality.

We have seen this before and we know the cost: livelihoods collapse, access to essential resources worsens, and social networks fracture. Unless lessons are learned, climate adaptation could itself become a driver of “development cleansing”.

Displacement and resettlement aren’t peripheral to climate negotiations. The Task Force on Displacement has already contributed recommendations into UN climate processes. Debates on loss and damage and just transition must take into account how resettlement is currently managed, and push for a change in approach.

Towards a Rights-Based Approach

A coherent rights-based approach to resettlement is long overdue. That means moving beyond token compensation and relocation packages to put rights, equity, and participation at the centre.

Evidence shows that when compensation is combined with post-relocation investment in livelihoods and services, harm can be mitigated and genuine opportunities created. But compensation alone cannot restore what people lose. As Michael Cernea and other experts have shown, inadequate financing is a root cause of failure. Governments and companies must mobilize additional resources, and embrace benefit-sharing arrangements that channel project revenues back to affected communities. Key elements of a rights-based approach include:

• Adopting a more rigorous commitment to avoiding displacement wherever possible, by ensuring all possible design alternatives have been thoroughly investigated. Alternatives such as land redistribution must be fully explored during project design.
• Project proponents should provide compelling justification as to how a project serves the public interest, explain who benefits exactly, how, and why resettlement is unavoidable.
• Comprehensive human rights and environmental due diligence should be mandatory and informed through genuine participation of affected communities in decisions shaping their future. Engagement must take power imbalances into account and ensure participation offers real options.
• Those who bear the heaviest costs should also share in the economic gains, as shown in benefit sharing agreements in Canada, Japan, and Norway or China’s reforms linking compensation with post-resettlement.
• Adequately funded post-resettlement support, and long-term monitoring of outcomes after the move are essential. Contingency funds should budget for support to displaced communities left worse off once the project is complete.

These are not radical ideas; they are the practical application of the UNGPs and existing human rights standards. But consistent implementation is lacking.

The Way Forward

With displacement set to rise, the stakes are high. Resettlement will increasingly determine whether development projects and climate action reinforce inequality or help build fairer, more resilient societies. Forced displacement in the name of development simply cannot be squared with human rights. If resettlement must occur, it should be framed as a rights-based process centred on human dignity and sharing of benefits. Anything less will deepen a crisis already far too large to ignore.

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Ben Rutledge supported the UN Special Rapporteur on Adequate Housing with the preparation of reports on resettlement presented to the UN General Assembly and Human Rights Council, and has visited various resettlement sites on behalf of OHCHR and the Centre on Housing Rights & Evictions (COHRE).