Cambodia: Villagers & NGOs express disappointment over ANZ’s cutting of ties with Phnom Penh Sugar; ANZ responds

Photo by Nicolas Axelrod & Thomas Cristofoletti through Equitable Cambodia

Equitable Cambodia, Inclusive Development International and Oxfam Australia released statements expressing disappointment over news about ANZ's cutting of ties with Phnom Penh Sugar – a company that has been implicated in land grabs, child labour, and arbitrary arrests and intimidation of villagers, among others. The NGO statements and ANZ’s response are provided.

In August 2014, farmers from Kompong Speu Province echoed the same message in its petition to ANZ Royal Bank (of which ANZ Royal is majority owner), insisting that the bank still has a responsibility toward the affected communities. Details below.

In May 2015, Oxfam Australia sent a letter to ANZ asking the bank to commit to a "zero tolerance" approach on land grabs. 

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Article
5 May 2015

Oxfam asks ANZ bank to adopt zero tolerance approach on land grabs

Author: Oxfam Australia

Oxfam letter to Australia and New Zealand Banking Group (ANZ), 1 May 2015

One year on from the publication of our Banking on Shaky Ground report we write to...update you on developments related to Oxfam’s work on improper land acquisitions in the soft commodity sector and the exposure of the biggest Australian banks. Firstly, we wish to thank your team,...for their engagement with Oxfam on this issue. Secondly, we seek to highlight recent action taken by ANZ’s competitors. Thirdly, we emphasize that ANZ’s exposure to land grabs is systemic and that, as yet, it has not undertaken a systemic response...In 2015 Oxfam will continue to research additional cases of improper land acquisitions and to publish further on this issue. We will continue to work with the financial sector and your competitor banks to support efforts to recognize and respond to the risk of improper land acquisitions. We...hope that ANZ will commit to working with Oxfam to adopt a Zero Tolerance approach for Land Grabs, which we believe is coherent with ANZ CEO Mike Smith’s emphasis on ‘behaving appropriately and doing what is right by our customers, our shareholders, our people and the communities in which we operate…’ While we welcome ANZ’s recent invitation to provide input into its sensitive sector policies review, we reiterate our concern that ANZ does not yet have a sensitive sector policy for either land or agriculture. Until ANZ has clear, detailed commitments on how it respects land rights across its operations the bank continues to face the risk of exposure to improper land acquisitions. 

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Article
15 August 2014

Cambodia: ANZ says it is “not considering compensation measures” for displaced families since it no longer finances Phnom Penh Sugar

Author: Aun Pheap & Zsombor Peter, Cambodia Daily

“ANZ Refuses to Help Evictees of Senator’s Farm”, 15 August 2014

About 100 villagers who lost land to a sugarcane plantation, which was until recently financed by ANZ Royal Bank, traveled to Phnom Penh to protest in front of the bank’s headquarters…but failed to convince the bank to help them…After meeting with ANZ officials behind closed doors...villager Chheng Sopheap said the bank refused to budge on its stance that it was no longer bound to help them…Stephen Ries, spokesman for ANZ Royal’s Australian parent company, ANZ...reiterated that the bank would do nothing more to help the families. “ANZ is no longer a financier of [Phnom Penh Sugar] and it is no longer appropriate to have any discussions on the company’s business,” he said…“Given this is an issue for [Phnom Penh Sugar] to manage with the local communities, ANZ is not considering any compensation measures.”…Phnom Penh Sugar says it has compensated the families, provided them with new land and offered them good jobs on the plantation. But the families say the compensation has been paltry, the land poor and parched, and the jobs no substitute for the farmland they have lost…

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Article
4 August 2014

Cambodia: Displaced farmers petition ANZ for compensation despite bank's cutting of ties with Phnom Penh Sugar; ANZ comments

Author: Aun Pheap & Zsombor Peter, Cambodia Daily

“Farmers Threaten ANZ With Protest, Demand Help”, 4 August 2014

Farmers from Kompong Speu province handed ANZ Royal Bank a petition…insisting it still had a responsibility to help mend the damage done by a sugar plantation in has helped finance, even though the bank and plantation recently parted ways. They threatened to start protesting in front of the bank’s Phnom Penh headquarters if it did not agree to help them…In their letter to ANZ Royal…the villagers [said]…“While communities suffer, ANZ gained profit from the interest charged on the principal loaned to [Phnom Penh Sugar]…ANZ Royal CEO Grant Knuckey, who attended…[the] meeting with the Kompong Speu representatives, declined to comment on the meeting or the letter…Stephen Ries, spokesman for ANZ, the majority owner of ANZ Royal...said…“While we had put in place a detailed action plan to help [Phnom Penh Sugar] improve its performance in addressing its social and environmental obligations, it ultimately decided to pay out its loan and is no longer a customer of ANZ”…

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Article
15 July 2014

Cambodia: Oxfam condemns ANZ’s cutting of ties with Phnom Penh Sugar; says bank still has responsibility to ensure adequate compensation

Author: Oxfam Australia

“ANZ should not leave Cambodian community ‘high and dry’”, 8 July 2014

Oxfam has condemned ANZ’s cutting of ties to the Cambodian sugar company implicated in the use of child labour and causing food shortages after forcing hundreds of families off their land…Oxfam Australia Chief Executive Dr Helen Szoke said the bank still had a responsibility to work to ensure adequate compensation for the communities affected…“Families are still without adequate food, denied access to their land and highly vulnerable to violence and intimidation. There are concerns by groups working closely with the community that ANZ cutting and running will make people more vulnerable to the abusive practices of Phnom Penh Sugar and less likely to get justice for the human rights violations in which it is involved.”…

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Article
15 July 2014

Cambodia: Rights groups say the end of commercial relations between ANZ & Phnom Penh Sugar “did not absolve bank of responsibility”

Author: Zsombor Peter & Joshua Wilwohl, Cambodia Daily

“Senator’s Sugar Firm Parts Ways With ANZ”, 7 July 2014

A controversial sugar plantation owned by Senator Ly Yong Phat has paid off the last of its debt to ANZ Royal Bank amid pressure from the bank to help hundreds of families in Kompong Speu province who accuse the plantation of stealing their land. Local rights groups say the end of commercial relations did not absolve the bank of responsibility and that ANZ should compensate the families if the plantation still refuses to do so…Phnom Penh Sugar director Seng Nhak confirmed that the plantation had paid off its loan to ANZ Royal but declined to say whether the move was prompted by the costs of meeting the bank’s social and environmental compliance standards. “Phnom Penh Sugar is continuing to engage directly with the local community and will continue to do so…” he said…[Business & Human Rights Resource Centre invited ANZ to respond. Response provided.]

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Article
15 July 2014

Equitable Cambodia & Inclusive Development International say ANZ should directly compensate victims of land confiscation in Cambodia

Author: Equitable Cambodia & Inclusive Development International

“Dropping Phnom Penh Sugar as a client does not let ANZ Bank off the hook for financing human rights abuses”, 7 July 2014

Equitable Cambodia and Inclusive Development International expressed disappointment that ANZ Bank has cut its business ties to the Cambodian firm Phnom Penh Sugar without first ensuring redress for the grave harms caused to hundreds of families by the plantation that it financed…ANZ, through its Cambodian operation ANZ Royal Bank, severed its ties with PP Sugar after the firm repaid a loan…that it borrowed to part-fund the establishment of its sugar plantation and refinery…[The] plantation was built on the site of one of Cambodia’s most high-profile land-grabs…The plantation has also been implicated in the widespread use of child labor, arbitrary arrests and intimidation of villagers, and dangerous working conditions that have resulted in several worker deaths…[Business & Human Rights Resource Centre invited ANZ to respond. Response provided.]

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Company response
14 July 2014

[PDF] ANZ response

Author: ANZ

15 July 2014

…In relation to the Phnom Penh Sugar Company, it recently paid out its loan to ANZ Royal and is no longer an ANZ customer. Prior to the company’s decision to repay the load, ANZ had demonstrated a willingness to remain engaged in the company and its stakeholders. For example, ANZ was involved in an extensive dialogue in Australia and in Cambodia to hear the concerns of NGOs including Equitable Cambodia, Inclusive Development and Oxfam, as well as supporting the company to meet with NGOs and members of the community directly…A detailed action plan was put in place by ANZ to help the company improve, including implementing time-bound performance measures; however the company ultimately chose to exit its relationship with ANZ…

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Article
7 July 2014

Cambodia: ANZ cuts off ties with Phnom Penh Sugar allegedly due to “inadequate response” to a plan to remedy concerns about forced evictions, child labour

Author: Khmer Times

“ANZ cuts off ties to Cambodian firm”, 6 July 2014

…ANZ Bank’s commercial relationship with Phnom Penh Sugar has come to an end…[T]he relationship broke down over the company’s inadequate response to a detailed project plan developed by ANZ, which was designed to remedy longstanding concerns about the use of child labour, forced evictions and military-backed land grabs...“While I’m limited in what I can say about individual customers, I can confirm that PP Sugar has paid out its loan and is no longer a customer of ANZ,” the [ANZ] spokesman said…PP Sugar is understood to have secured cheaper finance when all the compliance costs associated with the ANZ facility were factored in. The company, however, has made progress in some areas. It put in place a zero-tolerance policy towards child labour…The company also held a forum with villagers and NGOs to hear the concerns…And it reached further financial settlements with other affected village families, although not all families accepted the compensation deal offered…

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