Civil society groups file OECD complaint against European banks for alleged role in human rights abuses during apartheid regime; incl. co responses

On 19 April 2018, Open Secrets in partnership with the Centre for Applied Legal Studies (CALS) announced their intention to file an OECD complaint against two European banks, KBC Group and KBL, for allegedly facilitating illegal arms transactions that allowed the apartheid government to secretly buy weapons despite mandatory UN arms sanctions. We invited the banks to respond, responses provided below.

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19 April 2018

Apartheid Banks: Civil society groups demand accountability for apartheid profiteers

Author: Open Secrets, Centre for Applied Legal Studies (CALS)

New evidence shows that two European banks were at the centre of the apartheid era international arms money laundering machinery. For nearly two decades, Belgium’s Kredietbank and its subsidiary in Luxembourg (KBL) were responsible for facilitating up to 70% of all illegal arms transactions that allowed the apartheid government to secretly buy weapons despite mandatory UN arms sanctions...

Open Secrets in partnership with the Centre for Applied Legal Studies (CALS) are bringing the fight for accountability for South Africa’s historic economic crimes to Europe using international accountability frameworks. The complaint is against two major European banks - Belgium’s Kredietbank (now known as the KBC Group) and its subsidiary in Luxembourg (KBL) in terms of the OECD Guidelines for Multinational Enterprises.

The conduct of these banks exemplifies impunity amongst private actors who collaborated with the apartheid regime. It also shines a spotlight on similar contemporary practices involving major financial institutions that continue to undermine human rights across the globe.

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Company response
25 April 2018

Response by KBC

Author: KBC

KBC group has taken cognisance of the complaint filed by the South African NGOs Open Secrets and the Centre for Applied Legal Studies with the OECD... 

In the complaint both NGOs refer to the alleged support to the apartheid regime and the purported involvement in setting up controversial financial structures to fund illegal arms trade with that regime in the period between 1977-1994. The alleged support would have been given by the Luxembourg bank KBL and its sister company, the former Kredietbank at the time. 

Both Kredietbank and KBL were subsidiaries of the same holding company Almanij. Kredietbank has never been a mother company of KBL, as is erroneously mentioned in the complaint...

KBC group notes the complaint of both NGOs and will submit the complaint and the attached documents to a thorough examination, insofar as still possible... 

KBL has no longer formed part of KBC group since 2011. KBC group no longer has access to any documents or archives of KBL and therefore cannot comment on its behalf...

KBC group's extremely comprehensive and openly communicated sustainability framework forms the touchstone for its policies. It has implemented groupwide policies and procedures to guarantee sustainable, ethical, responsible behaviour. KBC group has signed the UN Global Compact and fully respects the founding principles of the Universal Declaration of Human Rights. It shuns financial activities involving the most controversial of regimes... 

However, should the allegations that KBL or Kredietbank provided support or were allegedly involved in this matter in the past prove to be true, it would be deeply regretted by KBC today...

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Company response
27 April 2018

Response by KBL European Private Bankers

Author: KBL European Private Bankers

Statement from KBL European Private Bankers 

Luxembourg; April 27, 2018: KBL European Private Bankers (KBL epb) has taken note of recent claims made regarding its historical activities, and is currently reviewing those claims. 

KBL epb acts in full accordance with all relevant domestic, European and international legislation and regulations, and reaffirms its commitment to upholding the highest standards of corporate governance. 

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