A report released last month by Oxfam revealed that Australia's big four banks have invested in land grabs that have dispossessed local land owners across the world.
The report, Banking on Shaky Ground, explains that large-scale land acquisitions have risen due to the rise in global food prices since 2008. Companies are eager to acquire more land to grow food in order to benefit from rising prices on the global food markets.
A large-scale land acquisition is defined as being more than 200 hectares. Not only is this 10 times the size of a typical small farm, but it is also larger than the average land holding in all but three developing countries.
There have been more than 900 large-scale acquisitions since 2000, covering 35.6 million hectares ― the size of Germany. Such acquisitions become “land grabs” when they violate human rights, ignore social, environmental and economic impacts, or lack democratic planning.
South-east Asia is the main target for acquisitions. In Laos, foreign interests now controlled 30% of land. By last year, Cambodia had leased 2.6 million hectares, equivalent to 73% of its arable land, affecting 400,000 people.
Indonesia and Papua New Guinea lead the world in terms of land acquisitions. Each year in Indonesia, 330,000 hectares of forest are targeted for conversion into palm oil plantations. This involves almost 700 investors ― 75% of whom are foreign.
Papua New Guniea has been facing controversy over its Special Agricultural Business Leases (SABL), which have led to the acquisition of 12% of its land. These were meant to provide agricultural development, but a recent government review found almost all were issued fraudulently and have had negative impacts on local people and the environment.
Oxfam's report uses case studies to show Australian banks' links to land grabs. Westpac has a 19-year-old banking relationship with WTK Group, a Malaysian logging company operating in PNG.
In 2003, a PNG government review of WTK's logging operations found concerns regarding the use of violence, sexual misconduct toward local women, environmental damage and possible illegal logging.
One of WTK's SABLs in the community of Turubu was meant to lead to oil plam development. But after five years, the only operation was logging of old-growth forest.
The Commonwealth Bank owns $14.21 million of shares in Bunge. The agribusiness company owns a sugar mill that sources cane from 8800 hectares of Brazilian land that is in the process of being returned to its indigenous owners.
A Brazilian federal prosecutor requested that Bunge stop sourcing sugar cane from these lands, which it has refused to do. As well as losing their land, at least 60 families from the Jatayvary community are now living on the border of sugar plantations that supply Bunge. They are exposed to pesticides and smoke from the burning of sugar cane straw, pollution of waterways and heavy traffic.
ANZ is financing Phnom Penh Sugar, a Cambodian sugar plantation implicated in child labour, military-backed land grabs, forced evictions and food shortages. At least 1000 families have been forcibly removed, many now living on infertile land that is barely able to support them.
NAB has lent more than $218 million to Singaporean company Wilmar, the world's leading palm oil processor and trader. NAB's first loan to Wilmar was in 2010, when the World Bank Group suspended lending to the entire oil palm industry based on complaints about Wilmar's operations.
Another loan was approved last year, soon after Newsweek ranked Wilmar as the least sunstainable company in the world for the second-year running. The report notes that with Wilmar being the largest palm oil company, “the sheer number of conflicts and controversies surrounding its operations and those of its many subsidiaries are virtually impossible to document”.
Oxfam's report only describes these four examples of land grabs in detail, but it notes there is an extensive list of allegations against the big four banks that simply could not be covered in one report. The big four banks have a total of $21.7 billion invested in the agricultural industry outside Australia.
Oxfam also looks into the ethical policies of the banks. Westpac, NAB and ANZ have policies that are meant to ensure they only invest in socially, environmentally and economically sound operations. As for the Commonwealth Bank, Oxfam “could not find any public formulations for how the CBA as a Group interprets and applies its human rights responsibilities and defines and manages ESG [environmental, social and corporate governance] risk”.
Oxfam's solution to this problem is to improve the banks' ethical standards and practices, because the “banks’ actions also impact the international reputation of Australian business”.
The report says: “It is essential that Australian business in the region model best practice, supporting long-term and sustainable investment, and build a reliable reputation that can endure political and social upheaval.”
But it is naive to think that any business can be trusted to monitor its own conduct. As the report shows, these banks have already failed to follow their own policies. The report details how hard it is to obtain accurate information about the banks’ investments. Even monitoring by governments is susceptible to corruption.
The reality is that capitalism fosters ruthless global practices. As long as profit remains the guiding principle, this sort of exploitation will continue.
Big banks and corporations use their wealth and power to find ways to subvert, override or ignore measures intended to moderate their actions. A democratic socialist economy that prioritises the interests of people and the environment is the only long-term guarantee of our rights.