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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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Company response
12 January 2018

Morgan Stanley re financing for cluster munitions

Author: Morgan Stanley

Morgan Stanley maintains a global environmental and social risk management framework to identify and assess a range of environmental and social issues that may be associated with proposed transactions across the firm’s business units. This risk management activity is underpinned by our global risk policies, which reference the Equator Principles, the World Bank’s IFC standards, and other applicable guidelines...

Download the full document 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...

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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

Download the full document here

Company response
15 January 2018

Groupe BPCE response re financing for cluster munitions

We acknowledge the information you share in your report on our affiliates holding in Textron but note however that this company announced in August 2016 that it was discontinuing its Sensor-Fuzed-Weapon production which came to an end in Q1 2017. We also confirm that BPCE and Natixis strictly apply the policy that was published in 2009, committing to not finance or invest in businesses involved in manufacturing, selling or storing anti-personnel mines or cluster munitions. The policy applies to commercial banking and investments made on our own account, and the third-party investments made by French asset manager Natixis Asset Management... However, the policy does not apply to all investments managed by its United States-based asset managers, where BPCE and Natixis cannot unilaterally enforce their policy, since the United States have still not signed the Oslo Convention on Cluster Munitions. Considering the ethical problem caused by such investments, we however continue our dialogue with the American affiliates to raise awareness on this subject...

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Company response
15 January 2018

HSBC response re Drummond & paramilitary violence in Colombia

Author: HSBC

... HSBC does take human rights issues seriously and our Metals and Mining policy has made reference to human rights impacts since 2007. In 2017 we revised this policy and it explicitly states that our global business must undertake additional due diligence in certain circumstances, including: Customers causing or contributing to severe adverse impacts on human rights. HSBC seeks to prevent such impacts, subject to the leverage we have with a customer... When any allegations of companies operating in breach of our policies are brought to our attention, we always investigate. In mining... we work with clients who meet our sustainability standards - including those related to human rights - and clients who are making credible progress towards meeting them. Where clients are unwilling or unable to meet our standards, we end the banking relationship as soon as is contractually possible.

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Company response
15 January 2018

Mizuho Bank response re Drummond & paramilitary violence in Colombia & Dakota Access Pipeline

Author: Mizuho Bank

(1) Providing loans to US coal company Drummond: We cannot comment on an individual client due to our confidentiality policy. However, we have shared your concerns with relevant departments/offices.

(2) Providing loans for the Dakota Access Pipeline Project:
Please see below site: https://www.mizuhoamericas.com/insights-news/news/statements/our-stateme...

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Company response
15 January 2018

TD Bank response re Dakota Access Pipeline & Trans Mountain Pipeline Expansion Project

Author: TD Bank

...With regard to the Dakota Access Pipeline syndicated deal, we understand and respect the concerns raised about this engagement as well as the peaceful demonstrations that people used to express their views... TD commissioned an independent human rights study to better understand the complex issues involved in the Dakota Access Pipeline... Drawing upon their findings, TD continues to review our due diligence policies and make improvements, where appropriate.

...As it relates to the Trans Mountain Pipeline Expansion Project, TD has been following the project closely for many years, including Kinder Morgan's adoption of best practices around management of environmental and social risk, Indigenous engagement and benefit sharing, and incorporation of Indigenous knowledge...

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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
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
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...

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