

ANZ Group, the Australia and New Zealand banking giant, has become the latest financial group to fall foul of the OECD Guidelines on Multinational Enterprises, after a ruling against it over the financing of a sugar plantation and refinery in Cambodia that allegedly forced local people off their land.
Australia’s OECD National Contact Point (NCP), based within the government Treasury department, told ANZ – one of the five largest listed companies in Australia, and the number one bank in New Zealand – that it must tighten internal compliance rules on human rights standards, which it claims it already adheres to.
It says the bank should be more rigorous in due diligence on lending deals in developing countries and implement a grievance mechanism and publish the outcomes on human rights issues in order to safeguard accountability to local communities. It has given ANZ 12 months to report back to it on the ruling.
The ANZ case follows a flurry of NGO cases ranged against financial groups that are being investigated under the OECD Guidelines. Four Dutch-based NGOs have filed a complaint against ING Bank for violating international guidelines on climate change and the environment. Credit Suisse is subject to a complaint relating to its links with the controversial North Dakota Access Pipeline (DAPL) in the US. In March, the OECD said institutional investors had a “direct linkage” with investee companies under its guidelines and that the finance sector now accounted for over 20% of all new cases it was being asked to consider.
The ANZ case has been running for almost three years and was originally accepted by the Australian NCP back in August 2015. The country NCPs are charged with assessing and mediating grievances under the OECD’s ‘soft law’ Guidelines, depending on the jurisdiction where the complaint is lodged.
Equitable Cambodia, a Cambodian human rights NGO, and Inclusive Development International (IDI), a human rights organisation focused on land and local capacity building, brought the ANZ case to the OECD.They allege the bank breached the OECD Guidelines through a AUS$40m loan by wholly-owned subsidiary, ANZ Royal Bank, back in 2011 to the Phnomh Penh Sugar Co. Ltd (PPS). They say PPS forced local people off their land, depriving them of their homes and livelihoods. They claim the sugar plantation was also linked to arbitrary arrests and intimidation of villagers as well as child labour and dangerous and sometimes lethal working conditions. The NGOs acknowledge that ANZ is only “partly responsible” for the issue, but say the group did not take appropriate measures to “prevent or remedy” the problems, as outlined in the United Nations Guiding Principles (UNGPs) on Business and Human Rights. The NGOs have demanded that ANZ pay the profits of the loan to the 681 families it says were displaced by PPS.
ANZ disputes that its financing was for land acquisition in its response to the NCP. It says it engaged with PPS to ensure it complied with local laws and says its due diligence assessment for the loan was appropriate. But, it says it regretted not having made more progress in influencing change at the Cambodian company. It initially said it would not divest any of the project profits and that it did not believe it was in breach of the OECD Guidelines.
It said it had not developed a formal grievance procedure, but would consider remediation if it identifies adverse human rights impacts.
However, at a Parliamentary committee last Friday (October 12), Shayne Elliott, CEO of ANZ Group, said the bank was considering whether to compensate those affected by the project.
Elliott said the bank provided financing for the purposes of building the refinery, not to acquire the plantation land, but “that doesn’t excuse it”. “This is a dreadful situation and nobody’s proud of the situation that’s happened,” he said.
Additional reporting by Paul Verney