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BankTrack paper explores responsibilities of banks allegedly contributing to human rights violations through finance

In this briefing paper, BankTrack examines whether private sector banks may have contributed to adverse human rights impacts through their provision of finance. The paper explores eight cases of human rights abuses and the relationship and responsibilities of the banks providing financing to the projects. These cases include:

  • Dakota Access Pipeline, United States. See here for responses received from banks to a statement by Rainforest Action Network (RAN) questioning banks' financing of the Dakota Access Pipeline given the human rights concerns. Responses received from Wells Fargo, Mizuho, TD Bank & Citigroup to the RAN statement.
  •  Trans Mountain Pipeline Expansion Project, Canada
      • We invited TD Bank and Royal Bank of Canada to respond; responses provided below
  • Agua Zarca hydroelectic project, Honduras. See here for more information about this case, including an earlier response from Desarrollos Energéticos (DESA) and the announcement that FMO and Finnfund finalized their exit from the project in July 2017.
  • Phnom Penh Sugar, Cambodia
      • We invited ANZ Bank to respond; response provided below
      • See here for an earlier story about this case.
  • Drummond and paramilitary violence, Colombia
      • We invited BNP Paribas, Citigroup, Drummond, HSBC, Mizuho Financial & Wells Fargo to respond; responses provided below
      • We invited Bank of America & BBVA to respond; they did not respond
      • See here for an earlier related story.
  • Finance for cluster munitions, International
      • We invited BPCE Group, Citigroup, Morgan Stanley & Wells Fargo to respond; responses provided below
      • We invited  Bank of America, Bank of China, Hanwha, Mitsubishi UFJ, Norinco, Orbital ATK, Poongsan & Sumitomo Mitsui Financial Group to respond; they did not respond
      • We invited Goldman Sachs & JPMorgan Chase to respond; they declined to respond
      • China Aerospace Science and Industry could not be reached
  • Bank support for illegal settlements, Palestinian territories. See here for more information about Human Rights Watch's report calling on Israeli banks to cease activities in settlements, including a response from AXA. Israeli banks contacted by the Resource Centre for comment did not respond.
  • Secret loans scandel, Mozambique
      • We invited Credit Suisse to respond; response provided below
      • We invited VTB Bank to respond; it did not respond

[also refers to Energy Transfer Partners, Kinder Morgan, Phnom Penh Sugar & Textron]

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All components of this story

Company non-response
23 January 2018

Poongsan did not respond re cluster munitions case

Company non-response
23 January 2018

Sumitomo Mitsui did not respond re financing cluster munitions

Company non-response
23 January 2018

VTB Bank did not respond re secret loans scandel case in Mozambique

Company response
23 January 2018

Wells Fargo response re Drummond & paramilitary violence in Colombia & financing for cluster munitions

Author: Wells Fargo

... Wells Fargo strives to engage only with business customers that respect human rights and takes human-rights abuse allegations very seriously. We conduct enhanced due diligence for corporate customers in industries that present higher social and environmental risks, including fossil fuels, and we actively monitor developments regarding any allegation of human rights violations. It is also worth noting that Drummond is no longer a Wells Fargo customer, and that in 2015, Wells Fargo announced that we were limiting and reducing our exposure in coal mining. With regard to Textron and Orbital ATK, confidentiality policies prohibit us from providing details on specific customer relationships beyond what is publicly available. For more information on Wells Fargo's commitment to safeguarding human rights, please see our Human Rights Statement on wellsfargo.com.

Download the full document here

Company response
18 January 2018

Drummond re paramilitary violence in Colombia

Drummond Ltd. has had previous queries about Banktrack reports on this same topic regarding alleged human rights violations. There are no grounds for these allegations,
and this fact has been confirmed both in the US and Colombian judicial system. This is something that the banking institutions we do business with have also concluded, after carrying out robust due diligence processes... Regarding the civil suit filed against Drummond that followed the Alien Tort Claims Act lawsuit filed in 2002 in Alabama, the company was taken to trial and found not guilty, a verdict that was confirmed by the Federal Appeals court. There have been three additional law suits filed, with similar allegations, all of which have concluded in rulings that have cleared the company of any wrong doing... We provided the banks with ample documentation related to the allegations...

Download the full document here

Company response
18 January 2018

Royal Bank of Canada response re Trans Mountain Pipeline Expansion Project

Author: Royal Bank of Canada (RBC)

... RBC’s Code of Conduct (the “Code”) sets out the ethical principles by which all employees, contract workers and members of the Board are bound. These principles include a clear statement as to the individual and collective accountability for the social and economic effects of business decisions on communities in which we operate, including compliance with all applicable laws regarding non-discrimination and human rights... We highly value the relationship we have with Indigenous peoples and clients. We believe that resource development projects need to be done in a transparent and inclusive manner. This includes real, meaningful and lasting consultations with Indigenous peoples and local communities in project development... RBC ensures that all projects we finance receive relevant approvals, and we conduct due diligence that considers environmental and social risks to ensure that we adhere to internal risk management processes. This involves applying the Equator Principles to projects that we finance, which includes ongoing monitoring over the life of the loan. This ensures that we identify, assess and manage environmental and social risks associated with projects... We are committed to advancing our risk management processes as we learn from the experiences of our peers and feedback shared by stakeholders.

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Company response
17 January 2018

Citigroup response re Drummond & paramilitary violence in Colombia & cluster munitions cases

Author: Citi

...We have had a public commitment to respect human rights since 2007, when Citi became the first major U.S. based bank to issue a Statement on Human Rights... Before making a financing decision, we assess the potential impacts and work with our clients to apply a clearly defined set of environmentally and socially responsible policies consistent with leading international standards and good practice.

... Citi has previously communicated with Banktrack on this issue, as noted on its website. Our previous response detailed our extensive due diligence of the company, which included engagement on these issues... Discussions with our client continue to focus on how they are engaging with the communities on the ground, and we will continue to assess their engagement as the situation evolves... As part of Citi’s Military Equipment policy and risk approach, direct financing and/or facilitating of lethal military equipment, including cluster munitions, is generally prohibited. The financing and/or facilitating of military equipment that potentially could have a lethal use is required to be escalated and obtain senior risk approval. 

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Company response
16 January 2018

BNP Paribas response re Drummond & paramilitary violence in Colombia

Author: BNP Paribas

... With regard to the activities of US coal company Drummond Corporation Inc., we are not in a position to further comment since BNP Paribas does not finance nor invest in this company. Indeed, BNP Paribas commits to financing the economy in an ethical manner and wants to have a positive impact on society. To this end, BNP Paribas has expanded its requirements beyond those of the mandatory legal framework and has voluntarily adopted specific investment and financing policies, including in the “Mining industry”...  [See] BNP Paribas’ Statement on Human Rights for more information on the Group’s Human Rights policy: https://group.bnpparibas/uploads/file/uk_declaration_bnp_sur_droit_de_l_...

Read the full post here

Company response
15 January 2018

ANZ response re Phnom Penh Sugar case in Cambodia

Author: ANZ

In 2016 we conducted a comprehensive review of ANZ’s human rights standards... [and] n October 2016 we issued a revised set of human rights standards, which were upgraded in several key areas, including: (1) Confirming our ‘zero tolerance’ for improper land acquisition,... (2) Committing to considering remediation processes if we identify we have caused or contributed to adverse impacts, or are linked to adverse human rights impacts via our products and services,... (3) Confirming our expectation that our customers resolve issues identified where they are associated with adverse human rights impacts, ...(4) Supporting our business partners to align to these standards, eg clarifying our expectation that our business partners provide a fair and safe working environment, including following our approach to ‘no tolerance’ for child labour.

... We will not tolerate land acquisitions by our customers that we consider to be improper... In relation to our former customer Phnom Penh Sugar, we understand and respect that NGOs will continue to campaign in relation to their grievances. We did seek to influence change in this case and regret that we were not able to make more progress... These are issues that in regard to PPS can only be resolved by all parties working together and through the Cambodian Government-led process that is examining land displacement...

Download the full document here

Company response
15 January 2018

Credit Suisse response to secret loans scandel case in Mozambique

Author: Credit Suisse

Credit Suisse response to Business & Human Rights Resource Centre with respect to case study 8 of the BankTrack human rights briefing paper of December 2017:

Credit Suisse takes the matters raised in this case study seriously and is cooperating fully with on-going investigations into the Mozambique financings. While the current investigations remain on-going, the bank is not in a position to comment on the case study. We can, however, confirm that Credit Suisse maintains policies and procedures globally, including in the United Kingdom, to ensure compliance with applicable laws.

Credit Suisse AG, January 15, 2018

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