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EC and IDI vs. Australia and New Zealand Banking Group

Case overview

Date filed 6 October 2014
Current status Concluded
Issue ANZ’s role in displacing & dispossessing Cambodian families
Summary of the case The complaint was filed on behalf of 681 families who were forcibly displaced and dispossessed of their land, productive resources and in some cases houses, to make way for a Phnom Penh Sugar Co. Ltd. (PPS) sugar plantation and refinery that was partially financed by ANZ. In addition to forced evictions, military-backed land seizures and destruction of crops and property, PPS also allegedly participated in arbitrary arrests and intimidation of villagers, and the widespread use of child labour and dangerous working conditions that have resulted in the death of several workers. Although these abuses occurred between 2010 and 2011, the affected households remain either uncompensated or undercompensated for their losses.

The complaint alleges ANZ breached the OECD Guidelines by contributing to these abuses through their actions and omissions, and failing to take reasonable measures to prevent or remedy them. The complainants have raised the problems associated with the PPS loan with ANZ on numerous occasions since becoming aware of ANZs role. The case also received much public attention prior to ANZs loan decision. Despite this controversy, ANZ proceeded with the loan to PPS.

Even though ANZ reportedly ended the financial relationship with PPS in 2014, the complainants believe that ANZ can and should divest itself of the profits that it earned unjustly from the PPS. EC and IDI argue in the complaint that ANZ contributed directly to PPS illegal actions and profited from those actions, so it has an ongoing responsibility to provide reparations to those affected. The complainants furthermore urge the NCP to recommend that ANZ develop a corporate-level human rights compliant policy on involuntary land acquisition and resettlement, including relevant due diligence procedures, in order to address other similar problems in its portfolio and to ensure that
ANZ does not continue to contribute to such human rights violations elsewhere.
Developments/Outcome The Australian NCP accepted the case and mediation ensued from September 2015 to January 2016. However, after several talks, the parties agreed that no outcome could be reached that would satisfy all parties.

On 27 June 2018, the Australian NCP issued its final statement in conclusion of the case. It acknowledged that the conclusion of the specific instance took an unusually long time due to the complexity of the issue at hand, as well as shortcomings in the NCP’s processes and practices. The NCP stated that active steps will be taken to improve its performance.

The NCP agreed with the complainants that ANZ could have known about the risks associated with PPS based on publicly available information and concluded that there are considerable shortcomings in the current policies and procedures ANZ has in place to support human rights in their investments. However, the NCP did not offer its guidance relating to redress for the victims in this case, as it did not consider this to fall within its role as a non-judicial mechanism.

The NCP made several recommendations to ANZ, most notably that ANZ takes steps to promote internal compliance with its own corporate standards and to visibly demonstrate the proper application of the standards to ensure they are in line with the OECD Guidelines. The NCP also recommended that ANZ strengthen its due diligence mechanisms and establish a grievance mechanism which supports the effective operation of its corporate standards in relation to human rights and shows ANZ takes its responsibilities as a multinational corporation in this sector seriously. ANZ are to report back to the NCP about the progress they have made in a year.

While the complainants welcomed the NCP’s findings, they noted that the NCP failed to call on the bank to provide concrete remedies for the harms to which it contributed.

In light of this shortcoming, Banktrack and OECD Watch sent a letter to ANZ’s director asking him at the very least to pay back to victims the profits they received from financing PPS. The OECD Guidelines make clear that when a bank contributes to an abuse, it is also responsible for contributing to the remedy.

In October 2018, ANZ’s CEO Shayne Elliott told a parliamentary committee that they were indeed considering compensating the hundreds of families that suffered as a result of its investment. However, in a letter sent to IDI and EC on 17 December 2018, Mr Elliott, while acknowledging that the "application of [ANZ’s] due diligence was clearly lacking,” he falsely minimizes ANZ’s role in the case and appears to rollback suggestions that the bank would contribute to remediation. But days later at ANZ’s AGM, the CEO stated that they are observing a Cambodian government remediation process and will make a decision on what to do once that process is concluded. According to IDI and EC, the government process is highly flawed.
Relevant OECD Guidelines
Case keywords Forced evictions and resettlement, Human rights

NCP Information

NCP name National Contact Point Australia
NCP address C/- The Treasury ACT 2600 Canberra, Australia
NCP website http://www.ausncp.gov.au/
Other NCPs involved

Complainants

NGO

Company Information

Company responsible ANZ Bank
Company address 105 Gavan St.
3741 Bright
New Zealand
Company website
Company in violation ANZ Bank
Country of operations Cambodia
Other companies involved

Timeline of developments

Some developments are only visible to logged in users.
Date Actor Action Description Document
18 December 2018 Inclusive Development International statement Statement by IDI and EC for the ANZ Annual General Meeting  download pdf (405Kb)  
17 December 2018 ANZ Bank letter Letter CEO ANZ to EC and IDI download pdf (626Kb)  
29 October 2018 BankTrack letter Letter to ANZ by Banktrack and OECD Watch regarding compensation for victims download pdf (180Kb)  
11 October 2018 Inclusive Development International press release Press release by IDI download pdf (292Kb)  
27 June 2018 National Contact Point Australia statement Final statement issued by Australian NCP download pdf (227Kb)  
1 November 2015 National Contact Point Australia accept The NCP is trying to bring the parties together for mediation  
6 October 2014 Equitable Cambodia file Complaint filed with the Australian NCP download pdf (340Kb)  

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