Cambodian families who were forcibly displaced by The Phnom Penh Sugar Company have received compensation payments from ANZ bank, which financed the sugar company from 2011-2014.
This was the first time known globally that a bank has provided any form of financial compensation to communities harmed by the activities of a corporate lending customer. It was an important human rights precedent, which hopefully helps to entrench the norm that when a financial institution contributes to harm through its financing activities, it has a duty to contribute to remedy.
In 2020, ANZ acknowledged that its due diligence on the project funded by its loan was inadequate and agreed to provide the displaced families with a financial package equivalent to the profit the bank had earned from its loan. Equitable Cambodia and Inclusive Development International then worked with community representatives to devise and carry out an inclusive process to distribute the settlement funds to affected families, identifying and certifying 1,096 families eligible for the funds and taking steps to ensure that they received an equitable share. A portion of the settlement was set aside to fund local development projects, designed by the communities themselves.
ANZ set twin human rights precedents for the banking sector through its financial contribution to the families who were harmed by Phnom Penh Sugar and its launch of a new human rights grievance mechanism. ANZ’s actions place pressure on its peer banks worldwide to strengthen their human rights due diligence, and they solidify the norm that when financial institutions contribute to harm, they have a responsibility to contribute to remedy.