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Australian banks agree to work with Oxfam on 'land grab' funding in PNG | Pacific Beat

Australian banks agree to work with Oxfam on 'land grab' funding in PNG

Australian banks agree to work with Oxfam on 'land grab' funding in PNG

Updated 29 April 2014, 14:44 AEST

Australia's big four banks have agreed to work with Oxfam to look into issues raised in the development organisation's new report on the involvement of financial institutions in dubious land dealing in developing countries.

In Papua New Guinea, Oxfam found Westpac and the ANZ had relationships with companies adversely named by a recent Commission of Inquiry for being involved in land deals that failed to obtain landowner consent.

The report also named the National Australia Bank for its involvement with Wilmar, the world's largest palm oil company, which has just begun operations in PNG.

WTK's lawyer in Port Moresby rejected accusations the company was linked to any of the agricultural leases. Its lawyer Robert Bradshaw said if WTK Realty was involved in SABLs it "would have been summonsed to give evidence in the commission of inquiry."

Presenter: Jemima Garrett

Speaker: Helen Szoke, chief executive, Oxfam Australia

SZOKE: We've heard the banks make their public announcements that they want to be consistent with their own ethical and sustainability frameworks. From Oxfam's perspective we want the banks to do three things. We want them to be transparent about where they are making these investments, which companies they are making investments in so that people can make an assessment on the ground as to what the impact of those investments are. The second thing that we are doing is that we are asking the banks to commit to what we call a 'zero tolerance around land grabs', not to make investments in companies where the land has been acquired illegally or unethically. And the third thing we are asking the banks to do is to basically, where they have found that their investments have resulted and impacted adversely on people, and we have seen examples of deforestation, of processes which have left people with food shortages and health problems from water pollution, particularly in Papua New Guinea, where they find cases of that, we want them to put pressure on those companies to ensure those people are adequately compensated.

GARRETT: Your report found Westpac and ANZ have relationships with companies that are involved with land leases in Papua New Guinea that were made without permission of the landowners. What will you be asking the banks to do specifically in those cases?

SZOKE: Well, we want the banks to actually act on the evidence that is being presented to them in this case. They have made investments in these companies. In the case of Westpac they have had a 19-year financing relationship with the WTK Group. That is enough time to actually indicate that they can put pressure on that company to make appropriate restitution and compensation for the damage that has been done to communities in Papua New Guinea. Once logging starts in these areas, if it is not carefully managed, and the interests of the communities aren't managed, then it does result in food shortages and health problems. We have shown pictures of the polluted waterways and for many of these communities there is a cultural aspect in terms of the destruction of sacred sites. These are big impacts on communities that lead very modest lives and who live in poverty, and that is the concern of Oxfam, the banks have a really important role in helping to lift people out of poverty and making sure that they are not hungry.

GARRETT: Wilmar, Asia's biggest agribusiness group and the world's biggest oil palm company has just begun operations in Papua New Guinea, and your report found the National Australia Bank has loaned Wilmar more than $200 million since 2010. What concerns does that raise for you?

SZOKE: Well, what concerns us is that the NAB bank actually continued to invest in Wilmar after it was ranked as the least sustainable company in the world for its environmental performance for two years running. Now, Wilmar has since come out with some appropriate policies that say they are going to deal with issues of sustainability and protection of communities. We are saying now to the NAB, if you are going to continue investing in them, then use your investment power to make sure that they apply their policies on the ground to look after the communities when they go into Papua New Guinea with their investments. This is a real issue of saying let's close the gap between the policy rhetoric and what actually happens on the ground as it impacts on people's lives in countries like Papua New Guinea and Cambodia and Indonesia and other countries that are cited in the Oxfam report.

GARRETT: This is not the first report that Oxfam has done into dubious land dealings in developing countries. What did earlier reports look at and what came out of them?

SZOKE: Well, I think what is heartening from some of our earlier reports is actually that we have seen that big multi-national companies, when they are presented with evidence, actually change their practices. So, for example, when we presented the evidence of land grabs in relation to sugar plantations to Coke and Pepsi, basically they said we are going to adopt a zero tolerance policy in terms of where we source our sugar. Oxfam says if it is good enough for Coke and Pepsi to step up to the mark then it is good enough for Australia's four big banks who claim this international reputation in terms of being leaders of the pack in terms of ethics and sustainability policy frameworks.

GARRETT: The banks fall back on confidentiality of financing relationships and they won't necessarily admit to involvement in wrong-doing. Does that make them a harder nut to crack than some of these other companies?

SZOKE: What Oxfam found with its research is that we started with the complaints from the communities and then we traced the investment trail back. Yes, it is very hard to go behind the firewalls of the securities registers to work out who the investors are and that is why we are calling for the big four banks to be transparent in terms of who they are making their investments with overseas. There is over $20 billion worth of money that is being invested in these agribusinesses and we think the ordinary Australian depositors and investors most of whom bank with the top four banks, want to know that their money is being used in a responsible way in these investment practices and agribusinesses across the world.

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