ANZ failed to meet human rights standards: government report
By Richard Baker & Nick McKenzie
11 October 2018 — 12:10pm
ANZ Bank failed to meet its own human rights standards when it financed a Cambodian sugar plantation that was linked to forced evictions, child labour and workplace deaths, according to an Australian government investigation.

The criticism of the banking giant is made in a report by the Australian National Contact Point, a little-known Treasury division responsible for overseeing the nation’s corporate commitments to the Organisation for Economic Cooperation and Development.

“When its human rights standards were applied to ANZ’s commercial relationship with its former client Phnom Penh Sugar, it is arguable that most (if not all) of them would not be satisfactorily met,” the Australian Treasury division found.

But the Australian Treasury division stopped short of endorsing a suggestion by non-government organisations that ANZ be forced to divest its profts from the sugar plantation loan to provide financial redress to hundreds of Cambodian families.

The human rights criticism comes at a bad time for Australia's banking industry, which has been found by the Hayne Royal Commission to have been motivated by greed and to have regularly put profit ahead of its clients' best interests.

The OECD is made up of 36 countries committed to ethical and transparent trade and commerce policies. Australia has been a member since 1971.

Fairfax Media revealed in 2014 that ANZ had backed Phnom Penh Sugar’s plantation and refinery through its Cambodian banking subsidiary, ANZ Royal Bank.

Hundreds of poor Cambodian families were forcibly removed from their homes to make way for the sugar crop, with many receiving just $100 in compensation.

The sugar company is owned by a prominent Cambodian politician, Senator Ly Yong Phat, who is also one of the country’s richest men. The Royal Group is owned by another tycoon, Kith Meng. Both Mr Meng and Senator Phat are close associates of Cambodia’s recently re-elected Prime Minister HE.

Almost 700 poor Cambodian farming families were behind the ANZ complaint, which was lodged with the Australian Treasury division in late 2014 by non-government organisations, Equitable Cambodia and Inclusive Development International.

After an assessment and investigation process that took almost four years, the Australian Treasury division found, “it is difficult to reconcile ANZ’s decision to take on PPS as a client with its own internal policies and procedures”.

“The potential risks associated with this decision would likely have been readily apparent.”

Representatives of affected Cambodian families told the inquiry that the sugar development was associated with “arbitrary arrests and intimidation of villagers, the use of child labour and dangerous working conditions which have resulted in death”.
https://www.smh.com.au/business/banking ... 508z2.html

Australia government body criticises ANZ for Cambodia land rights violations
by Thomson Reuters Foundation | Thomson Reuters Foundation
Thursday, 11 October 2018 09:00 GMT
By Rina Chandran

BANGKOK, Oct 11 (Thomson Reuters Foundation) - The Australia and New Zealand Banking Group (ANZ) violated global human rights standards by financing a sugar company accused of seizing land from Cambodian farmers, an Australian government body said on Thursday.

In a complaint to the Australian National Contact Point (ANCP), which monitors corporate behaviour overseas, two rights groups had said ANZ and its Cambodian subsidiary had breached rights guidelines in lending to Phnom Penh Sugar Co. (PPS).

The advocacy groups, Equitable Cambodia and Inclusive Development International, said in their 2014 complaint that PPS forcibly removed families and took their land, intimidated villagers and used child labour in its operations.

Such actions violated an ethical business code set by the Organisation for Economic Cooperation and Development (OECD), which Australia endorsed, ANCP said.

"It is difficult to reconcile ANZ's decision to take on PPS as a client with its own internal policies and procedures, which appear to accord with the OECD Guidelines," the ANCP said in its final statement on the case.

The decision is part of a broader trend of companies coming under greater scrutiny for their actions overseas.

Differences in legislation and inadequate protections for workers and residents in poorer countries can lead to rights violations that foreign investors must be held responsible for, activists say.

But the ANCP said that although it appeared that Cambodians had been "adversely affected" by the PPS, "what is less clear is the extent to which ANZ can be held responsible for any harm."

Hundreds of families forced off their land by PPS received little compensation, and continue to suffer nearly a decade on, said Eang Vuthy, executive director of Equitable Cambodia.

The ANCP's decision affirms that ANZ "should not have financed a company that was involved in a land conflict with thousands of local farmers," he said in a statement.
But "while this offers some measure of vindication for the families, it doesn't address their immediate situation, which remains desperate," he said.

The lender told the ANCP that it cut ties with PPS in 2014.

A spokesman for ANZ said the lender has acted on ANCP's recommendations, and that it had pushed PPS to clean up its operations.

"Phnom Penh Sugar left the bank after we sought to influence change," the spokesman told the Thomson Reuters Foundation by e-mail.
"We regret we were not able to make more progress."

In their complaint, the rights groups said ANZ must use profits from the PPS loan to provide reparations to the 681 families, but the bank declined to do so, the ANCP noted.

While the ANCP was right to call out ANZ's "reckless behaviour", it failed in not pressing the lender to provide adequate redress for the damage caused, said Keren Adams at the Human Rights Law Centre, an Australian non-profit.

"This is ultimately just a slap on the wrist," she said. (Reporting by Rina Chandran @rinachandran. Editing by Jared Ferrie. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's rights, trafficking, property rights and climate change. Visit news.trust.org to see more stories.)

ANZ boss says bank will consider compensating Cambodians forced off farms for sugar plantation
By Holly Robertson
12 October 2018

ANZ will consider whether to compensate hundreds of Cambodian families who were forcibly evicted from their farms to make way for a sugar plantation and refinery partially financed by the bank, chief executive Shayne Elliott has told a parliamentary committee.

Rights groups said Phnom Penh Sugar, which received a $40 million loan from ANZ joint venture ANZ Royal Bank in 2011, forced hundreds of families off their farming land to make way for a sugar plantation and refinery in Cambodia's Kampong Speu province, and employed child labourers in dangerous conditions.

While testifying at a parliamentary committee on Friday, Mr Elliott said the bank provided financing for 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.

Though Mr Elliott had not yet read the report, he said the bank would consider whether to compensate those affected by the project.

"The profit on something like that would have been quite de minimus, but that doesn't mean we shouldn't do the right thing," he said.
http://www.abc.net.au/news/2018-10-12/a ... m/10370648

Behind this story:
- The ANZ Royal (Australia, New Zealand, Cambodia) bank financed a Cambodian sugar company that has been repeatedly held responsible for human rights' abuses, such as land-grabbing and child labor.
- NGOs and media brought this to the attention of the global public.
- The sugar company rapidly repaid the loan, and ANZ Royal washed their hands of the affair.
- In 2018, an Australian government body finds that in financing the company Phnom Penh Sugar, the ANZ Royal actions violated an ethical business code set by the Organisation for Economic Cooperation and Development (OECD), endorsed by Australia.
- Until now, the ANZ has refused to use any part of the money made from the loan to compensate Cambodian villagers forcibly evicted by the sugar company.

ANZ Royal financing 'blood sugar' plantation
23 January 2014

The bank’s involvement was outlined in two audits commissioned or instigated by the bank itself and obtained by the Post yesterday.

The initial audit – which revealed ANZ Royal as a potential financier at the time – was carried out in 2010 by Bangkok-based International Environmental Management (IEM), which made dozens of recommendations ranging from environmental protection to workers’ health and safety, to the monitoring of relocation sites.

A follow-up audit by the company in 2013 revealed the sugar company had obtained financing from ANZ Royal to help build a plantation and construct a sugar-processing refinery, while ignoring 60 per cent of recommendations made in the 2010 report.

https://www.phnompenhpost.com/national/ ... antation-0

From 2016:

However, Eang Vuthy, executive director of rights group Equitable Cambodia, said ANZ’s response was lacking in specifics and that the affected villagers still had not found justice.
“ANZ has to really respond to this situation or their name will keep being repeated in the media to make them accountable,” he said.

https://www.phnompenhpost.com/national/ ... loan-oxfam

https://www.oxfam.org.au/2016/02/how-ex ... your-bank/

ANZ mulling payout to sugar project victims
01 November 2018 | 11:36 ICT
The victims of Ly Yong Phat’s Phnom Penh Sugar Company development project in Kampong Speu province’s Oral district said they are “happy” to hear that ANZ Bank had declared to the Australian Parliamentary Committee that it would consider compensating those affected by the project.

A representative of the victims, Khon Khorn, 60, from Oral district’s Trapaing Chor commune, told The Post on Wednesday that though the bank has not confirmed the date it will pay the compensation, the gesture shows that ANZ Bank is responsible and willing to solve the matter for her community.

“According to [Shayne Elliott’s] declaration, we, the victims, are happy even though the compensation is not going to be as much as we expect. At least it will help reduce the problems affecting our livelihood,” she said.

She continued that her community is currently living under poor conditions, with most of them owing money to banks and microfinance institutions following eviction from their farmlands.

“We want the bank to calculate the compensation as soon as possible because we need it to pay debts and open small businesses to earn [a living],” said another victim of the project Soeung Sokhum.

Equitable Cambodia executive director Eang Vuthy appealed to ANZ Bank to create a “clear plan” to appease the community, observing the processes of similar sugar factory development projects in the Kingdom.

“At least, they should pay attention to what they have done to the community through this investment project."
https://phnompenhpost.com/national/anz- ... ke6CRXZsBI

'Important precedent': ANZ pays Cambodian families hurt by project it funded
By Charlotte Grieve
February 27, 2020 — 9.00am
ANZ has agreed to compensate more than one thousand Cambodian families that were forcibly displaced by a sugar company it loaned money to in 2011. Advocates are calling the step a watershed for human rights in the global banking sector.

The decision to pay the families with interest earned by the loan as well as offering an admission that the bank failed to conduct proper due diligence on the project ends one of the ugliest chapters of ANZ's 13-year expansion into Cambodia.

It started in 2011 when ANZ's Cambodian arm approved a loan to Phnom Penh Sugar, a company that had seized and destroyed the land and homes of 681 families from Kampong Speu Province in the country's south-west in collusion with the state authorities and armed forces, according to non-government organisations representing the families.

The sugar company was owned by LYP group, a conglomerate run by Cambodian senator Ly Yong Phat who is widely regarded as a business tycoon "notorious for engaging in unethical, corrupt and illegal business practices", according to local media reports. At the time the sugar company was seeking finance, activists and international media publicised its use of child labour as well as its violent clashes with local groups.

The initial complaint, filed by NGOs Equitable Cambodia and Inclusive Development Cambodia, said the report commissioned by ANZ Royal Bank to examine the environmental and social impacts of the project flagged the need for a more thorough investigation, yet this never occurred.

The complaint was picked up by the Australian National Contact Point, a little-known Treasury division responsible for overseeing the nation’s corporate commitments to the Organisation for Economic Cooperation and Development, in 2014. It later found it was "difficult to reconcile" ANZ's decision to take the sugar company on as a client due to the "readily apparent" risks associated.

"There is some doubt in this case around the extent to which ANZ's actual business practices aligned with its stated approach to human rights," the ANCP's 2018 report found.

In February, ANZ met with the Cambodian families and acknowledged that its initial due diligence before making the loan had been inadequate and its efforts to pressure the sugar company to make up for its human rights breaches unsuccessful. ANZ recognised the continuing hardships faced by the affected communities and committed to reviewing its human rights policies, including its customer social and environmental screening processes.

The NGOs representing the families welcomed ANZ's move to compensate the families.
https://www.watoday.com.au/business/ban ... 544tw.html

UPDATE - Same sugarcane plantation, different problem
Ly Yong Phat’s sugarcane plantation in Oral district is still causing concerns, but of a different nature, as local residents and school children are suffering from breathing problems, due to sugarcane dust pollution expelled from factory chimneys situated close to Chrakcha Primary School.

Dust from Ly Yong Phat’s Sugarcane Plantation a Hazard for School Children
21 January 2022 5:29 PM
Sorn Sarath
Khuon Narim

Kampong Speu Province-Oral district: A factory belches reams of dust into the air, covering trees, pagodas, homes and the nearby school — in which students’ desks are also coated with the grime.

So bad is the pollution from CPP senator Ly Yong Phat’s sugarcane plantation and factory in Oral district’s Phlorch village that teachers, parents and activists say children are suffering health issues from breathing in the dust.

“We worry about the health of children, their eyes and lungs,” one local mother, Ngok Thy, told CamboJA, saying her two sons’ eyes are often red. Several other parents told reporters similar stories about their families getting sick from the dust.

The school has tried to find solutions by blocking classrooms’ ventilation outlets with plastic bottles and foam to try prevent the sugarcane dust from entering. Teachers also tell the students to wear face masks, but are at a loss over what to do about their eyes.

“We have to stay inside the classroom when the wind blows and we cannot even eat meals outside,” said one teacher, who did not want to be named.

“We cannot teach the students because the dust gets into their eyes, so when the wind is particularly strong we ask students not to come at all.”

The dust is a problem between January and April every year when the company starts crushing the harvested cane. Locals say it’s been this way since the factory opened in 2012, after more than 1,500 families were evicted to make way for a Phnom Penh Sugar Company mega-plantation. They were each given compensation of about $500.

Locals say they’ve repeatedly asked authorities to intervene, but that because the 9,000-hectare concession, which got initial investment of $150million, is connected to powerful people, no action has been taken.

Asked for comment Seng Nhak, who is the LYP Group’s CEO, told reporters: “Before you write the news, please go and see the site and investigate yourself first.”

CamboJA reporters did so, and found the situation as described above — a blanket of dust over the area.

Pat Srey Nich, 22, lives in a house about 1km away from the factory and said her family members often get colds and sore throats, while Kin Kream, 40, said her son is at Chrakcha Primary School, and his eyes were swollen for two days from the dust this month.

Oum Harm, 83, chief monk at a pagoda which is about 600 meters from the factory, said he has asked the company many times to reduce the dust, but with no success.

“When the sugarcane dust gets into the eyes, it causes you to tear up,” he said.

Ham Prich, 40, father to a 12-year-old student, said he was at a loss for what to do.

“We can do nothing. Teachers have called for intervention from authorities many times but there’s still no solution,” he said. “We, the people, dare not because they are powerful.”

The factory at Phnom Penh Sugar Company in Kampong Speu province’s Oral district. Photo taken on January 18, 2022. CamboJA/ Khuon Narim

Trapaing Chor Commune Chief, Tep Nem, said that teachers had raised the issue with commune authorities a year ago, but they’d never sent an official request for intervention.

“Since then, commune authorities have not brought the issue to the upper level,” he said. “Almost no-one is interested in this issue as it mostly affects the school and a few families nearby the factory.”

However, Nem encouraged people to submit a letter to the commune, so that they could refer this issue to a higher level.

“We would take the matter to the company to solve,” he said.

But Prum Kimthon, president of Oral district education office, said that the problem had been raised multiple times at a higher level, to no avail.
Full article: https://cambojanews.com/dust-from-ly-yo ... -children/