Deutsche Bank no longer holds any significant stock in Vietnamese rubber giant Hoang Anh Gia Lai (HAGL) Global Witness has learned. The decision comes after the campaign group’s research revealed a wide range of environmental and human rights abuses in HAGL’s plantations in Cambodia and Laos. However the bank would not confirm if the decision came in response to Global Witness’ call last week for HAGL’s investors to divest following repeated failure to address these concerns.
“Deutsche Bank has refused to explain why it has dropped its stake in HAGL, but we were informed of its decision just six days after making our recommendation that they divest. This move sends a clear message to HAGL and other companies that lack of action to stamp out this kind of abuse is unacceptable and poses a financial and reputational risk to investors,” said Global Witness’ Megan MacInnes.(1)
Deutsche Bank has invested in HAGL for many years, and its subsidiary (Deutsche Bank Trust Company Americas) acted as HAGL’s depository bank when the company listed on the London Stock Exchange in 2011. In May 2013, Global Witness’s Rubber Barons report revealed how the company, one of Vietnam’s biggest, was routinely bulldozing local communities’ land and clearing large areas of intact forest.
Since August 2012, Global Witness has made repeated requests to HAGL to bring its operations in line with local law, resolve disputes with affected communities and publicly disclose details of their concessions. Despite making a range of commitments when the report was launched, Global Witness’ consultations with villagers affected by the company’s concessions indicate that very little has improved on the ground.(2)
In a press statement issued on 14th November 2013, Global Witness said that HAGL now represented a reputational and financial risk to investors, and that its financial backers should divest from the company. In an email to Global Witness dated 27th November, Deutsche Bank confirmed information that it no longer held any significant stock in HAGL, retaining only ‘minor residual holdings’.
“Deutsche Bank’s decision is good news, but it won’t bring justice for the people who have lost their farms to HAGL’s plantations”, said MacInnes. “HAGL must stop breaking the law, resolve its disputes with communities and publish details of its holdings. Current efforts to implement what the company calls ‘social programmes’ have not helped and appear to be little more than a cheap PR exercise.”
Cambodia and Laos are undergoing a land grabbing crisis that has seen more than 3.7 million hectares of land handed over to companies since 2000, forty percent of which is for rubber plantations. The secrecy that pervades such land and forest deals allows elites in both countries to profit at the expense of people and the environment. Global Witness is campaigning for deals to be done with the consent of the people who live on the land, and to end private finance for land grabs and deforestation.
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Contact: Megan MacInnes, [email protected], or Oliver Courtney [email protected], +44 (0) 7912 517147
Notes to editors:
(1) When asked by Global Witness between April and September 2013, HAGL denied any disputes with local communities or involvement in law-breaking.
(2) When questioned by Global Witness on 13th November 2013, HAGL refuted the lack of progress made towards its commitments to change. The company stated it had provided jobs and implemented economic and social development projects (including building roads, houses and hospitals), but that the monsoon and Cambodia’s national election had prevented the company from accessing affected communities. HAGL claimed that their moratorium was being followed, describing the satellite evidence provided by Global Witness as “untrustworthy”. In addition, HAGL says it is “looking for an independent consulting firm to help HAGL make the survey and give advice to HAGL to improve the issues related to the communities” but that such consultants must be accompanied by company staff in order to “assure the consultant’s independency of their findings”.