Banks accused of links with unethical overseas practices

Written by admin on 30/07/2019 Categories: 苏州美睫

(Transcript from World News Radio)

Australia’s biggest financial institutions have jumped to defend themselves against reports of alleged links to unethical practices overseas.


Land grabs, unapproved logging and child exploitation are amongst the accusations.

But the banks have told SBS that new international customers and investments are put under scrutiny to ensure that unethical practices are not taking place.

Abby Dinham reports.


Australia’s big four banks are being accused of having business dealings with controversial overseas companies at the centre of land grabbing allegations.


An Oxfam Australia report claims that ANZ, Westpac, National Australia Bank and the Commonwealth Bank are affiliated with organisations reportedly involved in illegal logging, forced evictions, inadequate compensation and child labour.


Oxfam Chief Executive Helen Szoke:


“We’re talking about land grabs which are mainly agribusiness which acquire land either illegally or not going through the processes of consent and compensation for the people who owned the land and this has resulted in often illegal practices forced evictions and from our persectives the most concerning thing is that it leaves people with food shortages and often without a home.”


Dr Szoke says the scale of the investments is worth billions.


“Well Australia’s big four banks the ANZ, Westpac, Commonwealth and the NAB have in excess of 20 billion dollars worth of investments in these kind of businesses overseas so this is a big exposure for them financially and also in terms of reputation risk.”


In Papua New Guinea, Oxfam claims that Westpac is supporting a timber company that is illegally logging rain forest, despite order from a P-N-G Commission of Inquiry to stop.


In Cambodia, the report says that the ANZ Bank is financing a sugar plantation that has been accused of using child labour, and claiming land by force.


The report states that Phnom Penh Sugar plantation issued just 100 dollars to land owners and that families were resettled on infertile land.


Meanwhile, the Commonwealth Bank has been accused of investing in a Brazilian agribusiness that farm on contested Indigenous land.


And the NAB is accused of funding Asian palm oil giant, Wilmar, which has been linked to land grab allegations in Indonesia and Malaysia, since 2011.


Doctor Szoke says the decisions of Australia’s big banks are having real impacts on some of the world’s poorest people.


“What we’re talking about is men and women with families who often are subsistance farmers who rely on the land for their own livlihoods and what has happened in the big banks investing in these companies is that their situations have become more dire for them because they haven’t had appropriate compensation and are going to bed hungry every night and often homeless.”


Oxfam says its investigations show the banks are on shaky ground with these investments, facing potential asset write downs and the possibility that foreign governments and courts will shut down land deals.


Stuart Palmer from Australian Ethical Investment says that could result in significant financial loss for the banks and their shareholders.


“If they’ve lent to a particular project which is relying on land which has been acquired improperly and that land then is taken away from that company then the risk that the bank won’t get repaid it’s loan is increased so that’s the potential financial impact that these sorts of practices can have on the banks.”


And Mr Palmer says the banks also face financial loss if their reputations are damaged as a result of these investments.


He says customers are becoming more discerning of where they are investing their money.


“We’re seeing a really strong tend where people, our clients, others are really trying to allign their personal values with their money. So partly that’s who they bank with, who they buy things from and also how they invest their money.”


NAB has told SBS that it actively assesses issues related to human rights – including improper land acquisition – and that the bank supports actions that promote better outcomes for businesses and the communities in which they operate.


The ANZ says almost half the companies it was linked with in the Oxfam report are no longer customers, including one that exited several years ago for social and environmental reasons.


The Commonwealth Bank says it does not have proprietary interest in the Brazilian agribusiness it was linked to, but discussions on the report will take place.


And Westpac told SBS it has zero tolerance for customers operating outside the law and is currently addressing the claims of improper land acquisitions raised in the report.


Doctor Szoke says Oxfam doesn’t want the banks to pull out of investments in these countries but to use their financial leverage to steer clients in a more ethical direction.


“It’s absolutely clear that the big four banks can potentially have a really positive role, we’re not saying pull out of investment in these companies we’re saying use your investment power to hold these companies to account.”



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