NEWS: ANZ racks up record profits on the backs of Cambodia’s poor

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ANZ reported half-year cash profits of $3.68 billion last week, a record for the Australian bank. Much of that growth has come inAsia, a market that the bank has pursued aggressively, generating extraordinary wealth for its investors.
But ANZ’s “super regional strategy” has come at an extraordinary human cost in Cambodia. Between 2011 and 2014, the bank lent tens of millions of dollars to finance a controversial sugar company. Relative to the bank’s enormous profits, the loan was small. Yet it contributed to outsized misery for thousands of poor villagers.

Phnom Penh Sugar, the company that received the loan, established the plantation and a cane refinery on land that over 1500 rural families owned and depended upon for their livelihoods. When the families refuse to move, the politically connected company colluded with the Cambodian military and local authorities to forcibly evict the landowners, bulldozing their crops and homes and arresting those who resisted.

Compensation – for the few who received anything – was a small fraction of the market value. Stripped of their farms and ability to make a living, the families have fallen into debt and further poverty. In a cruel twist, some of the victims now find themselves with no option but to undertake back-breaking, dangerous work for the very company that grabbed their land – including children as young as seven, according to dozens of interviews we conducted with their parents.

Rather than use its vast financial resources to make things right, ANZ has wiped its hands of the matter. The bank severed ties with Phnom Penh Sugar after it was encouraged to repay the loan prematurely in July. ANZ now claims that it no longer bears any responsibility to the families.

This is a shocking and callous abdication from a bank that advertises itself as being ethical.

On the contrary, ANZ does bear responsibility for the suffering it helped make possible. The bank made a sizeable profit by financially backing a business built on the impoverishment of more than a dozen local communities.

Ignorance is not an excuse. If the bank had done any amount of due diligence before the deal – a simple Google search would have sufficed – it would have learned that Phnom Penh Sugar’s owner, Cambodian tycoon Ly Yong Phat, has been implicated in a number of other large-scale land grabs and human rights abuses. If it chose not to do this basic research, that’s sheer negligence.

Either way, ANZ has a legal – and moral – obligation to provide reparations to those affected.

In October, with the support of our organizations, 681 displaced families filed a complaint against ANZ with the Organization for Economic Cooperation and Development. ANZ has pledged to follow OECD’s Guidelines for Multinational Enterprises, which require companies to ensure that they are not causing or contributing to human rights violations. Investing in Phnom Penh Sugar was a flagrant violation of those guidelines.

Social and environmental guidelines such as these are vital in today’s globally connected economy. As this case shows, decisions made in a boardroom in Melbourne can have devastating consequences for villagers farming the rice paddies of southern Cambodia – and beyond.

Corporations and financial institutions, whose business dealings stretch across continents, must do everything in their power to ensure that they are not causing or enabling human rights abuses. And when abuses occur, they must come clean and work with affected communities to make things right.

ANZ’s directors no doubt hope that this unpleasant business goes away. This week, they’ll want the focus to be on the enormous financial returns they have generated for their shareholders, not a controversy in far-off Cambodia.

But unlike ANZ, victims like Chorm Srey Noun can’t walk away from this disaster. Chorm owes a local bank at least $5,000, money she borrowed to rebuild her life after the theft of her land. That’s a fortune for a 53-year-old Cambodian villager with no land and no real prospect for employment.

In a turn worthy of Kafka, Chorm spent 134 days in jail after a local court convicted her of “stealing” her own land from Phnom Penh Sugar, despite having documents proving she owns it. Living in fear of re-arrest, she has little faith that Cambodia’s institutions will rectify her situation.

ANZ’s corporate slogan is “We live in your world.” The phrase suggests empathy for other cultures. For Chorm and thousands of Cambodians, though, these words have taken on a terrible and sinister meaning. If ANZ wants to continue advertising itself as an ethical business, then it must divest itself of this ill-gotten gain and use those funds to help the victims get back on their feet.

David Pred is the founder and managing director of Inclusive Development International. Eang Vuthy is the Executive Director of Equitable Cambodia. The two organizations are representing the displaced families in their complaint to the OECD.

Read the original article at www.cambodiadaily.com