No sooner had German financial institution Deutsche Bank divested itself of a Vietnamese company accused of massive land grabbing than another European finance house has emerged in its place.
Environmental watchdog Global Witness said Credit Suisse became the largest institutional shareholder in rubber giant Hoang Anh Gia Lai (HAGL), in direct contravention of Credit Suisse’s commitments to human rights.
The investment was apparently made just two weeks after Global Witness exposed a range of environmental and human rights abuses in the company’s plantations in Cambodia and Laos.Enjoying this article? Click here to subscribe for full access. Just $5 a month.
“This is very worrying. Credit Suisse became a major shareholder in HAGL just when any responsible investor would be blacklisting them,” said Megan MacInnes from Global Witness.
“What kind of checks can Credit Suisse have done if it thought this was a good time to provide finance to a company like HAGL?”
German financial institution Deutsche Bank divested its investments in HAGL earlier this year after a landmark Global Witness report was released detailing land grabbing practices by Vietnamese companies in Laos and Cambodia.
That report went a long way towards unraveling some of the corporate mysteries surrounding land grabbing by rubber producers in Vietnam.
According to that report, privately owned HAGL and state-owned Vietnamese Rubber Group (VRG) acquired more than 200,000 hectares of land through a series of deals with the Lao and Cambodian governments that lacked transparency.
The deal was backed by the World Bank’s International Finance Corp (IFC) and Deutsche Bank, resulting in widespread devastation to the environment and to local livelihoods. The report noted that these investments stand in stark contrast to both institutions’ public commitments to ethics and sustainability, as well as the World Bank’s core mandate to end global poverty.
“Credit Suisse talks a good game, but it’s actively enabling the land-grabbing crisis that’s sweeping across Cambodia and Laos by financing this company. The bank trades heavily on signing up to ethical initiatives like the UN Global Compact and the Equator Principles, so why is it profiting from the misery of those who’ve lost their land and forests to HAGL?” MacInnes added.
Credit Suisse obtained its stake through a bond swap while HAGL founder and chairman, Doan Nguyen Duc, remains the company’s biggest shareholder.
Global Witness is urging Credit Suisse to review its due diligence processes to ensure its investments fund fair and sustainable development models rather than land grabs and deforestation.
Luke Hunt can be followed on Twitter at @lukeanthonyhunt.