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ANZ exonerated over logging links

July 2007

An accusation that Australia’s ANZ Bank has supported unsustainable logging in Papua New Guinea has been rejected.

The complaint was that the bank had breached guidelines for multinationals laid down by the Organization for Economic Co-operation and Development (OECD) by giving financial support to Rimbunan Hijau, a Malaysian logging company. Rimbunan Hijau has been accused of ‘serious human rights abuses, environmentally damaging logging practices and repeated, serious illegal conduct’ in Papua New Guinea.

The allegations, made to the OECD and placed before the Australian National Contact Point (NCP), were rejected on the grounds that the loans and guarantees did not amount to an ‘investment nexus’ between the bank and the logging company and that it was impossible to say that the bank’s influence was sufficient to trigger a supply chain investigation.  

One of the complainants, the Australian Conservation Foundation, regretted that the notion of an investment nexus was interpreted narrowly and that the Australian NCP therefore did not consider the debt financing link between the bank and the logging company.

The difficulty of establishing whether there is an investment nexus between a company and one of its subsidiaries or suppliers is one of the commonest criticisms levelled by non-governmental organizations against the OECD guideline procedures.

The other complainants were the Human Rights Council of Australia, the Environmental Law Centre, the Papua New Guinea Eco-Forestry Forum, and the Centre for Environmental Law and Community Rights.



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