Cambodia: Displaced villagers bring OECD complaint against ANZ for allegedly financing project linked to forced land confiscation; ANZ agrees to landmark settlement with farmers
Linked below are stories related to the complaint filed by villagers, represented by NGOs Equitable Cambodia and Inclusive Development International, before the Australian National Contact Point under the Guidelines for Multinational Enterprises of the Organisation for Economic Co-operation and Development (OECD). Earlier stories on this case are available here.
On 7 February 2020, following a dialogue involving representatives of the affected families, ANZ has agreed to provide a financial package to alleviate the hardships faced by some 1,200 affected families. The agreement effectively set a human rights precedent for the global banking sector.
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Author: Charlotte Grieve, The Sydney Morning Herald
27 February 2020
ANZ has agreed to compensate more than 1000 Cambodian families that were forcibly displaced by a sugar company it loaned money to in 2011. Advocates are calling the step a watershed for human rights in the global banking sector.
The decision to pay the families with interest earned by the loan as well as offering an admission that the bank failed to conduct proper due diligence on the project ends one of the ugliest chapters of ANZ's 13-year expansion into Cambodia.
In February, ANZ met with the Cambodian families and acknowledged that its initial due diligence before making the loan had been inadequate and its efforts to pressure the sugar company to make up for its human rights breaches unsuccessful. ANZ recognised the continuing hardships faced by the affected communities and committed to reviewing its human rights policies, including its customer social and environmental screening processes.
"Both organisations look forward to working with ANZ to continue to align its human rights approach with the OECD Guidelines and Multinational Enterprises and the UN Guiding Principles on business and human rights," the ANCP statement said.
"ANZ agreeing to contribute the gross profit it earned from the loan to the affected families has created an important precedent for the banking sector and we congratulate ANZ on becoming a global leader regarding an agreement of this kind," Oxfam chief executive Lyn Morgain said.
Author: ANZ, Inclusive Development International, & Equitable Cambodia (published by the Australian National Contact Point)
27 February 2020
ANZ, Inclusive Development International and Equitable Cambodia have reached an agreement on how to assist Cambodian communities that were adversely affected by an economic land use concession granted for a sugarcane project.
ANZ acknowledges its due diligence on the project funded by its loan was inadequate and recognizes the hardships faced by the affected communities.
The agreement includes:
- A contribution by ANZ of the gross profit it earned from the loan to help alleviate the hardships faced by the affected communities and support their efforts toward rehabilitation.
- A commitment by ANZ to review and strengthen its human rights policies, including its customer social and environmental screening processes, and specific grievance mechanism accessible to affected communities.
ANZ noted that it is not legally liable for the adverse impacts arising from the land use concession and sugarcane project.
Inclusive Development International and Equitable Cambodia welcome ANZ's contribution of the gross profit from the loan to help the communities get back on their feet, as well as its commitment to review and strengthen its human rights standards. Both organisations look forward to working with ANZ to continue to align its human rights approach with the OECD Guidelines on Multinational Enterprises and the UN Guiding Principles on Business and Human Rights.
Author: Inclusive Development International
27 February 2020
ANZ has agreed to provide a financial package to Cambodian families forcibly displaced by a sugar company the Australian bank loaned money to in 2011. By agreeing to contribute the money that it earned from the loan to the families, ANZ has set a human rights precedent for the global banking sector. The money will help to alleviate the hardships faced by some 1,200 affected families, who have been struggling for years after losing their land and livelihoods.
"This agreement sets an important precedent for the banking industry, and we welcome ANZ's leadership in this regard," said Natalie Bugalski, Legal Director of Inclusive Development International. "Going forward, all banks should recognize that they can't look the other way when they loan money to corporations that abuse people's rights and cause harm. If a bank contributes to adverse human rights impacts through its lending activities, it has a responsibility to contribute to a remedy."
In a joint statement issued by the three parties to the resolution, ANZ "acknowledges that its due diligence on the project funded by its loan was inadequate and recognizes the hardships faced by the affected communities."[...]
The Australian National Contact Point, which facilitated the negotiations, praised the agreement in an accompanying statement. "Where a company has gained revenue in a manner inconsistent with the OECD Guidelines, and that has resulted in parties being impacted, the payment of the revenues to those parties may be one way a company can comply with the requirements of the OECD Guidelines," the government body noted.
As part of the resolution, ANZ also agreed to review and strengthen its human rights policies, including its customer social and environmental screening processes and grievance mechanism.[...]
Author: Equitable Cambodia & Inclusive Development International
[Business & Human Rights Resource Centre invited ANZ to respond; response provided.] Inclusive Development International and Equitable Cambodia have filed a formal complaint with the Organization for Economic Cooperation and Development (OECD) against the Australian ANZ Bank. The complaint was lodged on behalf of 681 families who were forcibly displaced and dispossessed of their land and property to make way for a sugar plantation and refinery that received significant financing from ANZ. The complaint describes widespread breaches by ANZ of its responsibilities under the OECD Guidelines for Multinational Enterprises…According to the complaint: “In addition to forced evictions, military-backed land seizures, and destruction of crops and property, the project is also implicated in arbitrary arrests and intimidation of villagers and the widespread use of child labour.” ANZ is believed to have provided tens of millions of dollars to the Phnom Penh Sugar Company…
…[W]e can confirm that ANZ will cooperate with and assist the ANCP [Australian National Contact Point] with its enquiries…[W]e have outlined [in this response]…our approach to responsible business lending and an update on our response to issues raised with ANZ regarding Phnom Penh Sugar Company…ANZ respects and understands the concerns of...the members of the Thpong and Aoral district communities…[and] recently wrote to these community representatives. We have enclosed the letter in both English and a Khmer translation…[I]t is important to note that ANZ financed part of the factory construction…[and] did not finance the acquisition of concession land nor did we finance the plantation…Ultimately, the core of this dispute relates to land and resettlement from land. These are issues that can only be resolved from Phnom Penh Sugar Company and the Cambodian government…