Cambodian sugar

ANZ bank compensates Cambodian community in landmark agreement

ANZ bank has agreed to pay compensation to a Cambodian community displaced by a sugar company in Kampong Speu province in a landmark agreement for human rights

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February 27, 2020
ANZ bank compensates Cambodian community in landmark agreement
A sugar cane plantation in Kampong Speu province. Photo: Thomas Cristofoletti

A landmark agreement has been reached between Cambodian families forcibly displaced by a sugar company and the ANZ bank who loaned them money, setting a human rights precedent for the global banking sector. 

The ANZ Bank has agreed to pay the revenue and interest earned on a loan given to the Phnom Penh Sugar company, after a complaint was filed in 2014 on behalf of 1200 Cambodian families who were forcibly relocated to make way for a sugar plantation in Kampong Speu province in 2011.

According to Equitable Cambodia – one civil society group leading the complaint along with Inclusive Development International (ICI) – the financial package payout will help “alleviate hardships” faced by families who lost their land to the sugar plantation.

Executive director for Equitable Cambodia, Eang Vuthy, told the Globe that after five years of negotiations, they are pleased about the outcome. “This is a very good move and we’re very happy. It is very important that ANZ acknowledge the suffering caused, although not through direct activity, but how it contributed to [the community’s] suffering.”

Vuthy also hopes the result will set a precedent for other banks in similar situations, who may now be conscious that they can be held accountable for the impact of the loans they provide, especially in developing nations. However, he acknowledges compensation cannot replace the land taken from the community. 

“[It] will not replace what they lost, but will prove a significant contribution. The land is very important to them, and we hope the government will look into giving the land back.”

Soeung Sokhom, a representative of the affected families said in a statement the contribution will greatly help their situation. “We have experienced huge difficulties with our livelihoods since the sugar company took our land almost ten years ago.”

“The whole affected community, including me, are deeply grateful that ANZ has resolved our complaint,” he added.

The complaint was brought to the Australian National Contact Point for the OECD Guidelines for Multinational Enterprises after leaked documents found ANZ were in breach of their own standards.

They found the ANZ’s loan was inconsistent with the banks own policies and OECD’s ethical business guidelines as they provided significant financing to a company already embroiled in conflict with hundreds of families in the Thpong and Oral districts of the Kampong Speu province. Phnom Penh Sugar, a refinery owned by Cambodian senator and tycoon Ly Yong Phat, have also previously been linked to the use of child labour, deforestation and illegal logging.

According to the complaint, the Phnom Penh Sugar company’s sugar plantation was “established by seizing homes, rice fields, orchards, grazing land and community forests relied upon by local farmers in at least 21 villages” in Kampong Speu.

Equitable Cambodia was not able to disclose the payout amount due to a confidentiality agreement signed by the concerned parties. But according to news reports, the ANZ loaned $40 million to Phnom Penh Sugar in 2011. 

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