Logo of Phnom Penh Post newspaper Phnom Penh Post - ANZ sugar fallout broadens

ANZ sugar fallout broadens

ANZ Royal bank signage in Phnom Penh. It was revealed this week that ANZ’s joint venture in Cambodia is financing a controversial sugar plantation
ANZ Royal bank signage in Phnom Penh. It was revealed this week that ANZ’s joint venture in Cambodia is financing a controversial sugar plantation in the Kingdom. POST STAFF

ANZ sugar fallout broadens

Shareholders will want answers from ANZ bank after it was revealed this week that the banking giant’s joint venture in Cambodia financed ruling party senator Ly Yong Phat’s controversial sugar plantation, the Responsible Investment Association Australia (RIAA) said yesterday.

Environmental audit documents obtained by the Post on Tuesday linked ANZ Royal Bank, a joint venture with Cambodia’s Royal Group, to Phat’s Phnom Penh Sugar Company, which has been at the centre of forced land evictions and child labour scandals.

The documents, which contain two audits initiated by ANZ Royal and carried out by International Environmental Management (IEM), reveal that Phnom Penh Sugar has ignored 60 per cent of IEM’s recommendations on a variety of issues, including worker health and safety.

But it is outside of Cambodian shores where the bank’s business may feel the pinch.

In Australia, home to ANZ’s head office and largest business base, there is rising demand for investments in companies meeting socially responsible criteria, according to Simon O’Connor, CEO of RIAA. These investors, O’Connor added, are connected to 16 per cent of the total assets under management, amounting to about $1 trillion.

“Beyond the financial risks, it is worrying for responsible investors and Australians at large that any Australian company could be involved in a project that is allegedly breaching environmental standards and poorly treating workers,” he said. “Many of our members will be concerned about the allegations made about ANZ’s Cambodian partner, ANZ Royal Bank, and its financing of Phnom Penh Sugar, and would expect that this majority-owned subsidiary would be operating to the same standards as the parent bank.”

The investment arm of the Uniting Church in Australia is one such shareholder that has already demanded answers from the bank.

Mark Zirnsak, an executive director of offices in Victoria and Tasmania, said that as a starting point, he was satisfied with the official response received from ANZ, but he would be monitoring the situation closely.

“If we don’t feel that these issues are being addressed by the Phnom Penh sugar company, we will engage with ANZ again and say, well, either you get the client to really address the issues or we need to exit the relationship,” Zirnsak said from Melbourne yesterday.

The church may not be the bank’s largest shareholder, but they are big enough to be heard, having raised concerns over unethical investments with the bank in the past. Zirnsak also bought in to question Royal Group’s part ownership of ANZ in Cambodia. He said less control meant greater risk to reputation.

“That might be a matter for them really making tough decisions about how they actually make sure that the Cambodian branch stacks up to the standards that would be expected for the rest of the bank,” he said.

ANZ declined to respond to questions regarding brand risk yesterday. But the bank met with Phnom Penh Sugar, NGOs and local community members last week to address concerns, according to a company statement.

“Where impacts are identified that are not consistent with ANZ’s policies, our aim is to be a positive force for engagement and for change,” it said.

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