DeutscheWelle, 3 December 2013
Germany’s
largest bank, Deutsche Bank, confirms that one of its funds has sold its
shareholding in a Vietnamese company accused of rights abuses in Laos and
Cambodia.
Deutsche
Bank's statement confirming the sale was brief. Spokesman Michael West said one
of the bank's funds, which he did not name, had sold its “small shareholding”
in the controversial Vietnamese firm Hoang Anh Gia Lai Group (HAGL).
West
provided no further details of the sale, except to say that the fund in
question was managed by Duxton Asset Management. West did not say whether the
sale was linked to a campaign by UK-based non-profit organization Global
Witness which had called for the bank to divest.
"Deutsche
Bank upholds the highest standards in the area of sustainability,” West wrote.
“The small shareholding referred to was through funds managed by a third party
on behalf of external investors."
On its
website, Duxton describes itself as “the delegated manager of Deutsche Asset
Management's DWS Vietnam Fund and DWS Global Agricultural Land &
Opportunities Fund.”
DW was
unable to find information about the holdings of the second fund. However, the
June 30, 2013 interim report of the DWS Vietnam Fund reports that it held 4.1
million shares in HAGL worth around 4.05 million US dollars, or around 1.5
percent of the fund's total value. That amount totals around 0.3 percent of
HAGL.
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Deforestation has been 'the concern of the world,' Son Chhay |
Serious
allegations
In May
2013, HAGL was the subject - along with the state-owned Vietnam Rubber Group -
of a highly critical report by Global Witness. In the report titled “Rubber
Barons,” HAGL was accused of numerous rights abuses in relation to tens of
thousands of hectares of land the Cambodian and Laotian governments have
granted it.
Global
Witness' report assessed the environmental and social effects of HAGL's rubber
plantations in Cambodia and Laos. It stated that the company was flouting the
law when it came to protecting the land rights of indigenous people, was
illegally clearing forest, and held tracts of Cambodian land nearly five times
greater than the 10,000 hectare legal limit.
“Families
affected are impoverished, face food and water shortages, and get little or no
compensation,” Global Witness said at the time. “Indigenous minority peoples'
spirit forests and burial grounds have been destroyed. When they resist,
communities face violence, arrest and detention, often at the hands of armed
security forces that are on the investors' payroll.”
For its
part, HAGL has long denied the allegations, saying it abides by local laws. On
Tuesday, December 3, HAGL's chief of finance, Vo Truong Son, reiterated that,
adding too that the company was not “in receipt of any information from
Deutsche Bank stating their capital withdrawal.”
“We take
the view that we always show consideration and make every effort to assure HAGL
stockholders of [the] highest profitability,” he wrote in an email. “We operate
our business and investments in compliance with the laws of the home country
towards international standards and practices. We confirm our compliance with
that principle so far.”
Six months
Megan
MacInnes, Global Witness' campaign leader on land issues, told DW on Tuesday,
December 3, that when the organization's report was issued in May, it had given
HAGL six months to make changes.
“We
presented these problems to the company and made a series of recommendations
for what HAGL needs to do to bring its operations in line with the law, provide
compensation to households, for example, who have lost their fields, and to
also provide greater disclosure about its operations in general,” MacInnes
said.
“And we
asked HAGL's investors like Deutsche Bank to use their leverage, their
financial leverage, to also put pressure on the company to undertake these
changes,” she said.
However
HAGL's pledges made during its meetings with Global Witness, she said, had
amounted to nothing of value.
“Communities
have repeatedly told us since May that the problems have continued, and that
HAGL is not willing to take their concerns around, for example, land disputes
seriously.”
For that
reason, Global Witness last month called on Deutsche Bank to sell its shares.
Although Deutsche Bank would not say why its fund had sold its stake, “from the
timing we do believe there to be a relationship between our call and the bank's
action to get rid of its shares in the company,” MacInnes said.
Welcome
news
Whatever
the motivation, the chief whip of the opposition Cambodia National Rescue Party
(CNRP), Son Chhay, welcomed the news. He said it showed that Deutsche Bank,
which touts itself as a socially responsible corporation, would no longer
continue with “its direct support to this deforestation in Cambodia.”
“It's quite
encouraging because we know [that] what's happening in our forests – and which
directly affects the indigenous people as well as our environment – has been
the concern of the world, not just the Cambodian people,” Son Chhay said.
News of
Deutsche Bank's divestment in HAGL comes shortly after the world's largest
beverage company, Coca-Cola, promised “zero tolerance” for land grabbing by its
suppliers and bottlers. Its decision follows a high-profile campaign by Oxfam
to press the world's largest sugar purchasers - including Coca-Cola, Pepsico
and the UK's ABF - to take responsibility for their products' supply chains.
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Global Witness is optimistic that large investors are starting to view environmental matters differently |
In recent
years, for example, hundreds of Cambodian families have lost their land to
sugarcane companies. Those companies' exports to the European Union benefit
from the Everything But Arms initiative, a trade preferences deal that allows
unlimited duty-free imports to the wealthy bloc, and which has been linked
directly to significant rights abuses in Cambodia.
Son Chhay,
an outspoken critic of the Cambodian government's opaque land sales, says
Coca-Cola's stance is commendable. However, he wants such companies to do more.
“They
should also support those activists who are working on the issue – not just
stopping it,” he said. “If they really care, they should also encourage and
support those who work risking their lives to report all these problems in
countries like Cambodia.”
Scrutiny
driving change?
Global
Witness says that since 2000, more than 3.7 million hectares in Cambodia and
Laos alone have been handed to companies, with 40 percent of that land set
aside to grow rubber. Stories of human rights abuses are commonplace.
But Global
Witness is optimistic that large investors such as Deutsche Bank and some
companies in the agricultural supply chain are starting to view matters
differently, particularly when it comes to their environmental and social
responsibility.
“From Global
Witness' perspective - and we work on land issues not just in Cambodia but
across the world and especially at the international policy level of
discussions – we are definitely seeing some major changes,” says MacInnes.
And, she
adds, recent decisions - Coca-Cola's in particular with regards to its sugar
purchases – contain a timely message for the Cambodian government, which for
years has been accused of complicity in land grabs and brutalising its own
people.
“The
actions … send a very clear message to the Cambodian government that if it
wants to be seen as a safe place for investments in land and agri-business, the
government really needs to take these kinds of issues seriously,” she said.
MacInnes
stresses that the problem is not a lack of laws; they are already in place.
“It's just
a case of implementing it on the ground,” she said, “and making sure that
companies … are not allowed to get away with the bad practices that they are
currently responsible for.”
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