Australian banks financing companies accused of land grabs, child labour


Oxfam report accuses Big 4 of financing illegal activites. Photo: SMH

Australia’s leading ‘Big 4’ banks – National Australia Bank (NAB), Commonwealth Bank (CBA), Westpac and ANZ – have been accused of supporting land grabbing, child labour, forced evictions, inadequate compensation, food shortages and illegal logging, according to an Oxfam report released in April.

The report, entitled ‘Banking on Shaky Ground’, identifies a number of cases in which Australia’s biggest banks have been directly or indirectly supporting companies suspected of such activity – causing a major stir amongst members of financial and human rights sectors around the country.

The multi-thousand word report identifies four cases in Cambodia, Papua New Guinea, Indonesia and Brazil where banks have been accused of investing in questionable companies; focusing primarily on ethical standards of the banks and how investments into these regions are hypocritical in relation to their own practice methods.

Included in the report, Oxfam Australia Chief Executive, Helen Szoke says the Big 4 are not living up to their image of global leaders in sustainable banking, and that the financial institutes should be held accountable for their subsequent actions:

“From PNG and Cambodia to Indonesia and Brazil, our banks have backed companies accused of forcing people from their land,” Szoke said.

“There is a gap between what the big four banks say they do and what they actually do,” she said.

The report continues to outline how our banks are investing in Asia and the Pacific, and have trumpeted these regions as an opportunity for growth. However, the evidence showed they were unaware of or failing to respond to the risks of doing business there, particularly in the agricultural and timber industries.

According to Oxfam’s research, the banks’ exposure to companies in the agricultural commodities industry is in excess of $20 billion.

“We think there is a real problem around due diligence – around them actually focusing on their investment practices and making sure they put their money where their mouth is, in terms of ethical and sustainable investment practices in these agricultural businesses overseas,” said Dr. Szoke.


  • The National Australian Bank provided $200 million in loans to the Singaporean palm oil giant Wilmar which is under investigation for illegal land grabs. NAB has continued its funding even after 2012 when Wilmar was named the company with the worst environmental policies by Newsweek.
  • Commonwealth Bank invested $14 million in the company Bunge in Brazil, one of the largest commodity companies, which has also been accused of gaining sugarcane from stolen land of the indigenous population after laws determined they own the land.
  • In Cambodia, ANZ Bank is financing a sugar plantation that has involved child labour, military backed land grabs, forced evictions and food shortages.
  • Westpac is supporting illegal logging in PNG. Corporate records reveal that Westpac’s PNG subsidiary has had a 19-year relationship with a timber company that is logging pristine rainforest in defiance of an explicit finding by PNG’s Commission of Inquiry into Special Agricultural Business Leases that its lease was invalid and should be revoked.

Banks are on shaky ground with these investments, and are facing potential asset write downs. There is also the possibility that foreign governments and courts will shut down land deals, resulting in significant financial loss and shareholder value for each bank.

Land grabs are a significant issue that has already been recognised by leading corporations including Coca-Cola and Pepsi, and international financial institutions such as the World Bank, which have all adopted tough due diligence policies to prevent their involvement in land grabs. Of course, the same is applied to all illegal activity and the report is calling for banks to be more transparent in their investments.

“It’s in the banks’ best interests to know that when they invest in a company that has an agricultural business that the company is actually producing what it says it’s going to produce, that it’s actually acquired the land legally and then it looks after the communities that are impacted by that investment,” Dr. Szoke said.

The chief executive of the Responsible Investment Association of Australasia, Simon O’Connor, says the report raises some serious questions about how the banks manage risk as they continue to expand into Asia and other developing markets.

“This is very much a changing world for them. What we as investors hope is … there are strict due diligence processes and that they are understanding these risks before diving into these markets,” he said.

Oxfam urges the banks now to comply with their promise of sustainable banking and to adopt a zero-tolerance approach to land grabs and a higher transparency about their investment projects.

Responding to the investigation, the four banks have pledged to work with Oxfam to deal with the claims. It is believed that ANZ and Westpac are considering severing their ties with the companies accused of impropriety.


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