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Financial institution complicity/compliance with OECD Guidelines of projects they finance.
The Center for Human Rights and Environment (CEDHA) and the Bellona Foundation submitted a Specific Instance against Nordea for its complicity in anticipated breaches of the OECD Guidelines for Multinational Enterprises (henceforth “the Guidelines”) as a result of its support to the Botnia SA Orion pulp mill project (Orion) currently under construction in Fray Bentos Uruguay.
The Original Press Release Filed by CEDHA in the case:
June 28, 2006 – Cordoba, Argentina/Oslo, Norway – An international partnership of environmental organisations formed by the Center for Human Rights and Environment (CEDHA) in Argentina and the Bellona Foundation headquartered in Norway, has filed a Specific Instance complaint citing breaches to the OECD Guidelines for Multinational Enterprises by Nordea Bank, the Nordic region’s largest bank, concerning its involvement in Botnia’s pulp mill investment in Uruguay.
Nordea is the mandated lead arranger for USD480 million of external finance required by Botnia of Finland for its mega pulp mill factory located on the shores of the River Uruguay, the waterway which forms the international frontier between Argentina and Uruguay. The Specific Instance refers to Nordea’s breaches of the OECD Guidelines General Policies, Environmental Recommendations, Disclosure Policies with respect to its involvement with the Botnia project referring to the vital role to be played by Nordea, the most important member of Botnia’s investment supply chain, such that without the banks participation, the entire project and resulting Guideline violations would not be feasible.
The Specific Instance against Nordea follows attempts by CEDHA to establish a dialogue with Nordea to discuss the bank’s accountability to communities who are already beginning to feel the adverse affects of the project under construction. In communication with CEDHA, Nordea refused to comment on violations to the Guidelines, International Human Rights Law, environmental norms and breaches to the banks own Corporate Social Responsibility obligations, commenting that ‘appropriate governing bodies’ must handle such complaints. The OECD, as one such governing body, was requested by CEDHA and the Bellona Foundation to solicit Nordea’s cooperation taking into account the basic principles of participation, transparency and access to information.
The complaint is based on the Botnia Specific Instance which has been accepted by the Finland National Contact Point (NCP) and is under investigation, meanwhile another, separate Specific Instance directed at Finnvera, the Finnish export credit agency, and its breaches of the Guidelines, is being assessed by the Finland NCP
Swedish National Contact points establishes that an investment nexus does indeed exist and that financial institutions must adhere to OECD Guidelines with regards to the projects they finance.
Contributor(s): This article was modified by Jdtaillant (1).