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OECD NCP Australia & New Zealand - ACF et al. vs. ANZ Bank

Papua New Guinea, 2006

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The Complainants alleged that ANZ Bank financially supports logging companies engaged in human rights abuses and environmental destruction in Papua New Guinea (PNG). Specifically, the Complaint stated that ANZ was “actively facilitating and supporting” the PNG operations of Malaysian logging giant Rimbunan Hijau (RH), a company whose operations involve “serious human rights abuses, environmentally devastating logging practices and repeated, serious illegal conduct”.The Complainants alleged that:

- By failing to take basic steps to ensure that its clients respect human rights, ANZ becomes closely associated with violations of those rights.

- While ANZ had discussed community concerns with RH on these issues, this engagement had not demonstrated positive outcomes and was likely to be ineffective, as it did not occur within an articulated and binding framework of acceptable minimum environmental and human rights standards required as a condition for doing business with the bank.

- ANZ had not adopted a system of environmental management appropriate to its business in that it had not adopted forestry and human rights policies that set acceptable minimum standards for client engagement, in contrast to a number of other multinational financial institutions.

Through the specific instance mechanism of the Guidelines, the Complainants sought the following outcomes and commitments:

- ANZ adopt meaningful forestry and human rights policies that set basic standards for its clients across all its business operations, in accordance with international best practice for financial institutions;

- ANZ immediately disengage from the socially and environmentally destructive forestry operations in PNG;

- ANZ explore and actively foster community-based forestry operations conducted on a sustainable basis in PNG; and,

- ANZ advocate for positive solutions to forestry and human rights issues in Australia and in PNG.[1]

Two OECD Guidelines Complaints against ANZ were filed: the first at the Australian NCP (ANCP) by ACF et al. and the second at the New Zealand NCP (NZ NCP) by the Green Party of Aotearoa New Zealand. 


In seeking to determine whether this case was admissible as a specific instance under the Guidelines, the ANCP sought to establish whether there was an investment nexus between ANZ and RH.After filing the first complaint in August 2006, ACF submitted supplementary evidence to the ANCP regarding the existence of an investment nexus between ANZ and RH in September 2006.In October 2006, the ANCP rejected the complaint, claiming that ANZ’s loans and guarantees did not constitute an “investment nexus” between the bank and the logging company. The ANCP also claimed it was unable to ascertain whether ANZ’s degree of influence was sufficient to trigger the supply chain provision in the Guidelines.

- The ANCP considered the Complainants’ view that the performance-related bank guarantee given to the PNG Forestry Authority constituted an ANZ investment in RH because of its contingent nature.

- The ANCP noted that a business investment typically involves an element of residual risk bearing by the investor which appears to be absent in the bank guarantee.

- Moreover, the ANCP noted ANZ’s advice that its financial services, including the bank guarantee, were provided on a fee-for-service basis to RH.

These facts led the ANCP to conclude that it would be difficult to characterise ANZ’s financial links with RH as an investment as intended by the Guidelines.[2] ACF responded by stating its disappointment in the ANCP’s highly restrictive interpretation of the “investment nexus”. According to ACF, the Australian NCP excluded consideration of the Complaint despite an undisputed debt-financing link between ANZ Bank and the logging company. In addition, the rejection appears to be inconsistent with other Complaints in which debt-financing relationships have triggered the Guidelines’ complaint procedure.

The second Complaint in New Zealand was rejected by the NZ NCP in February 2008. The NCP argued that, given the lack of a sufficient link between RH and ANZ’s New Zealand-based business and the previous examination of the issue by the Australian Government, further examination of the Complaint was not warranted and would not contribute to the purposes and effectiveness of the Guidelines

In 2010, OECD Watch reported that despite the rejection of the complaint, pressure by NGOs on the bank to articulate clear sustainability standards continued.[3] ANZ Bank became the first Australian bank to adopt a formal forestry and bio-diversity policy in 2007, developed in consultation with civil society groups and industry. Among others, this policy includes clear commitments to not support illegal forestry or large-scale conversion. And ANZ’s CEO has publicly criticised Rimbunan Hijau, even as the bank continues actively to urge Rimbunan Hijau to improve its operations.


1. ANCP Final Statement

2. ANCP Final Statement

3. OECD Watch '10 Years On: Assessing the Contribution of the OECD Guidelines for Multinational Enterprises to Responsible Business Conduct (2010): 17.

OECD Watch case story page: