World Bank Group's financial intermediaries linked to various human rights abuses in Southeast Asia; companies & the IFC respond

 

Inclusive Development International, in collaboration with Bank Information Center, Tarkapaw Youth Group, Urgewald, 11.11.11, Accountability Counsel, and Ulu Foundation allege in this report that various banks and investment groups have invested millions of dollars to operate or fund local companies in Southeast Asia that are linked to human rights abuses including land grabbing and forced evictions.

Business & Human Rights Resource Centre invited the companies named in this report to respond – the responses are linked below. The following sent responses: International Finance Corporation, Dragon Capital, Indonesia Infrastructure Finance, and Raiffeisen Bank International.

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Article
2 May 2017

Full report - "Reckless Development: The IFC's Dodgy Deals in Southeast Asia"

Author: Inclusive Development International, Bank Information Center, Tarkapaw Youth Group, Urgewald, 11.11.11, Accountability Counsel, and Ulu Foundation

"Out of control: The World Bank's reckless private sector investments in Southeast Asia exposed", March 2017

Dozens of harmful and high-risk projects in Southeast Asia have received hidden funding from the World Bank Group, an ongoing investigation by Inclusive Development International has revealed... 

The IFC’s financial-sector clients have funded some of the region’s most destructive projects, contravening the Performance Standards, the institution’s social and environmental guidelines. These projects include mega-hydropower dams in Vietnam and Cambodia, dirty coal-fired power plants and mines in the Philippines, Vietnam and Myanmar, and massive agro-industrial land grabs in Cambodia and Laos...

“Once again we have found that outsourcing the World Bank Group’s development mandate to private financial institutions is a recipe for disaster,” said David Pred, Managing Director of Inclusive Development International...

Read the full post here

Article
1 May 2017

International Finance Corporation response

29 April 2017

...We have read IDI’s report and while we share concern for the communities negatively impacted by some of the projects mentioned, we find many factual inaccuracies in the report. As it has been communicated to IDI on numerous occasions during the report compilation, many of the sub-projects mentioned either pre-date or fall outside the scope of IFC's investment with the financial institutions (FIs) mentioned. In many other cases, the FIs have no exposure to the projects cited...

In leveraging our reach and scale through financial intermediaries, however, IFC cannot have the same level of oversight of the sub-projects supported by our FI clients as with our direct investments. But this work is a development imperative, and we are committed to supporting our clients and reducing the E&S risks in our portfolio. As part of this ongoing process, we are making some important additional improvements to the way we work, as our CEO, Philippe Le Houérou explains in his blog “Re-examining our work with financial institutions”...

Download the full document here

Company response
30 April 2017

Dragon Capital response

Author: Dragon Capital

24 April 2017

These allegations are historic. Dragon Capital can confirm that it actively engaged with the NGOs on issues raised relating to HAGL in March 2013. It now has in place a robust CSR system which is endorsed by several multinational development finance institutions. None of Dragon Capital’s investment mandates, including VEIL, are invested in Hoang Anh Gia Lai or Gemadept, and have not been invested in them since 2014 and 2016 respectively. Dragon Capital questions the validity and purpose of bringing up historic allegations in this way, which is perhaps counterproductive to encouraging DFIs and intermediaries to address issues raised by NGOs in a fair manner.  

Article
30 April 2017

Indonesia Infrastructure Finance response

Author: Indonesia Infrastructure Finance

21 April 2017

...In its operations, IIF applies best practices based on international standards in its credit, risk management and all aspects of its corporate governance. IIF implements international social and environmental protection standards to ensure sustainability of infrastructure development in Indonesia....

Contrary to the claim that IIF only began disclosing some information about its activities following civil society campaign, IIF has started disclosing such S&E documents of Project since August 2013...

In every project, IIF conducts S&E Due Diligence to obtain facts on hand relating to affected people and environment, and design a customized corrective action program to provide assistance to the project adversely affected people to get proper compensation based on: physical, economical (including job loss) and access displacements...

Download the full document here

Company response
30 April 2017

Raiffeisen Bank International Response

Author: Raiffeisen Bank International

24 April 2017

We are aware of how increasingly important a responsible behavior is - especially with regard to human rights and environmental topics.  Therefore, we have implemented several measures in our internal guidance to ensure social, ecologic and economic responsibility.  Some of them can be seen in our code of conduct as published on the RBI homepage.  Our guidelines are also subject to constant adaptations to follow the changing social, economical and environmental needs.

Refering to your request we would like to inform you that RBI is not a shareholder of Energy Earth (our role is only as a custodian) and RBI has no exposure to this company. Furthermore we trust in your understanding that we cannot provide any comments or information with regard to specific companies.

Company non-response
30 April 2017

Rizal Commercial Banking Corporation did not respond

Company response
30 April 2017

Vietnam Investment Group response

Author: Vietnam Investment Group

25 April 2017

...Vl Fund ll has assisted Gemadept to try to operate the plantation according to IFC Performance Standards on environmental and social sustainability. As part of this effort, Gemadept has engaged consultants AECOM (previously known as URS), Cambodian Rural Development Team (CRDT) to undertake Environmental lmpact Studies, Biodiversity and Social Surveys, Biodiversity and Community Development Plan and consulted with the following NGO's: World Wildlife Fund, GlobalWitness, Flora & Fauna lnternational and Birdlife lnternational. The following actions have been undertaken:

  • Compensation of farmers in 2011
  • Offered local and indigenous families work as plantation workers (the plantation employs over 1,200 workers in planting season)
  • Built housing, sanitation, water treatment, education facilities on the plantation...

Download the full document here

Company non-response
29 April 2017

BDO Unibank did not respond

Company non-response
29 April 2017

China-ASEAN Investment Cooperation Fund did not respond

Author: China-ASEAN Investment Cooperation Fund

Company non-response
29 April 2017

Energy Earth did not respond

Author: Energy Earth Public Company Limited