Are ANZ financing ‘blood sugar’?

Recently sugar’s been getting a bit of a bad rap.  Health experts have this gathered in Auckland in February at the Fizz symposium, aiming to highlight the role of sugar, and sugary drinks in particular, in fueling obesity in NZ. A recent poll shows that 46% of kiwi adults think there should be “definitely” be limits on sugar in drinks and further 32% said “possibly”. Excessive sugar consumption is linked to obesity, heart disease, tooth decay, and premature ageing.

But this isn’t the only impact the food industry has on blood sugar. Sugar plantations are leaving a trail of suffering and human rights abuses in Cambodia, and NZ’s most profitable bank, ANZ has been implicated.The bank came under scrutiny last month over allegations of financing a Cambodian sugar plantation that has been responsible for child labour, military-backed land grabs, forced evictions and food shortages.

ANZ are  alleged to have financed a 23,000 hectare sugar plantation through its Cambodian subsidiary ANZ Royal Bank. The project was run by Phnom Penh Sugar and situated in the impoverished Kampong Speu province of Cambodia. The plantation is made up of three adjacent blocks, two granted in February 2010 to ruling party Senator Ly Yong Phat and his wife, and another granted in 2011 after protected land was reclassified by sub-decree of Prime Minister Hun Sen. Yong Phat’s political connections allow him to flout the Cambodian Land Law, which limits land concessions to 10,000 hectares. He has interests in ten sugar and rubber plantations and a special economic zone, totaling 86,000 hectares.

A 2013 human rights impact assessment of Cambodian sugar supply chains notes the surge in forced displacement resulting from Cambodian land concessions to develop sugar plantations.It describes the forced eviction of local farmers whose land and homes lay inside PPS’ concessions:

With no prior notice and no court order, company staff accompanied by military, police and local authorities began clearing the villagers’ land in February 2010. One village, Pis, was totally destroyed and its residents were forcibly relocated onto small residential plots of rocky land at the foot of the mountain. During the clearing, some of the resident were instructed to collect 25 USD for moving costs at the office of the sugar company.

In all areas studied these farmers lost rice, small plantations and orchards, livestock, and other common resources that sustained their livelihoods.  1805 hectares of forest in Kampong Speu was destroyed to make way for one concession.

Accusations of neocolonialism have been leveled at similar instances landgrabbing that have become common across Southeast Asia. According to the Clean Sugar Campaign:

In rural areas, more than 2 million hectares – 12 percent of Cambodia’s total landmass – has bee granted to private companies as concessions for the development of agro-industrial plantations … Over the last several years there has been a rapid expansion in the Cambodian sugar industry, with at least 75,000 hectares in land concessions being granted to private companies for industrial sugarcane production.

Responding to questions from the Sydney Morning Herald a representative of Phnom Penh Sugar, has vigorously denied the allegations. However if the allegations are correct, they reflect extremely poorly on ANZ. ANZ are one of 79 signatories to the Equator Principles, a risk management framework adopted by financial institutions for assessing environmental and social risks.

In 2006 ANZ’s  financing of an OceanaGold mining project in the Philippines which was similarly marred by accusations of forced evictions, threats of violence, public misrepresentation and the illegal demolition of homes. Investigation by the Philippine Human Rights Chairperson confirmed the claims, and a case proceeded against Oceanagold. ANZ asserted throughout the period that their human rights policy was in compliance with the OECD Guidelines on Multinational Enterprises, despite updating it in 2009.

David Pred of Inclusive Development International said ANZ should explain to its shareholders why it has financed Senator Phat’s company. “This case seriously calls into question the credibility of ANZ’s due diligence process. Since ANZ does not disclose any of the corporate loans it makes, its shareholders are only left with its good word that it actually upholds the rigorous standards that it purports to apply to its corporate lending operations.”

Further, ANZ need to explain to its customers why they are playing such an active role in intensifying global inequality. It has been regularly reported on in the Cambodian press, and it is hard to believe that they have somehow just missed this.

How long has ANZ’s head office known of these human rights  abuses, and how many other ANZ-financed projects are generating abuses?

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Filed under ANZ, human rights, Inequality, Neocolonialism

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