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Open Secrets & CALS vs. KBC Group

Case overview

Date filed 24 April 2018
Current status Presentado
Issue Banks violating arms embargo during apartheid South Africa
Summary of the case Open Secrets and the Centre for Applied Legal Studies have filed a complaint with the Belgian and Luxembourg NCPs against Kredietbank Luxembourg (KBL) and Kredietbank (now called the KBC Group or KBC) for their alleged breaches of the OECD Guidelines. The complaint alleges that in the 1970s and 1980s, the banks facilitated a series of clandestine financial transactions to sell arms to Armscor, the state-owned arms procurement and production company of the then-apartheid government of South Africa, in violation of the United Nations Security Council arms embargo. The complainants assert the banks provided multitudes of numbered bank accounts to Armscor and shell companies in foreign jurisdictions for the purpose of faciliating weapons deals between Armscor and global arms companies.

In the complaint, Open Secrets and CALS ask the NCPs to determine whether the banks have breached the Guidelines and investigate the extent to which there should be punitive action taken against KBL and KBC Group for their role in facilitating the arms trade. The complainants hope that as a result of the complaint, KBL and KBC Group will issue an apology to South Africans and the South African government for their complicity in supporting the apartheid regime and violating the arms embargo during apartheid. Furthermore, Open Secrets and CALS hope the NCP process will encourage the European banking community to establish an oversight and accountability mechanism to ensure that financial institutions are not complicit in human rights violations as a result of their business activities.
Developments/Outcome On 28 May 2018, Mr. Juan Pablo Bohoslavsky, UN Independent Expert on Foreign Debt and Human Rights, submitted an amicus brief to the Belgian and Luxembourgian NCPs in support of the complaint.

On 6 June 2018 Open Secrets and CALS alerted the Belgian and Luxembourg authorities to a perceived conflict of interest within the National Contact Point in Belgium: several senior KBC executives hold influential positions within the Federation of Enterprises in Belgium, a key organization within the tripartite structure of the NCP. Open Secrets and CALS have requested a recusal of those conflicted parties, as their involvement may derail the legitimacy of the process.

On 24 April 2019, Open Secrets and CALS penned an op-ed about the case and their frustration with the unacceptable delays in its processing. A full 12 months since the case's filing, the NCPs have still not concluded the initial assessment phase. Open Secrets and CALS have repeatedly written to the two NCPs, as well as the OECD Secretary-General based in Paris, about their concerns over the conflict of interest at the Belgian NCP. The Secretary-General has confirmed the conflict of interest and made recommendations to the contact points, but the complainants feel this has largely been ignored. The Belgian NCP has not recused the conflicted federations from the decision-making process, has not provided reasons for ignoring the recommendations, has not met its own deadline for a decision, and has not given clear reasons for the delay or its refusal to take action against the conflict of interest. The complainants feel that, far from living up to their stated values of transparency and accountability, the NCPs in Belgium and Luxembourg, and indeed the OECD more broadly, have instead made the complainants question the power and legitimacy of the mechanism itself. The complainants are demanding that the OECD ensure justice is done and is seen to be done.
Relevant OECD Guidelines
Case keywords Los derechos humanos, Participación política, Sector financiero, Publicación de informaciones

NCP Information

NCP name National Contact Point Belgium
NCP address Brussels, Belgium
NCP website www.ocde-principesdirecteurs.fgov.be
Other NCPs involved

Complainants

ONG

Company Information

Company responsible KBC Group
Company address
Company website
Company in violation
Country of operations South Africa
Other companies involved

Timeline of developments

Date Actor Action Description Document
24 April 2019 Centre for Applied Legal Studies presentar Press release one year after complaint was filed download pdf (106Kb)  
7 June 2018 Open Secrets Press release after complaint was filed download pdf (358Kb)  
28 May 2018 Open Secrets Amicus application Juan Pablo Bohoslavsky, UN Independent Expert download pdf (266Kb)  
24 April 2018 Open Secrets Complaint filed with Luxembourg and Belgian NCPs download pdf (795Kb)  

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