Oxfam Australia has released a report showing that the big four Australian banks have financial connections with agri-business interests that are involved in major land grabs and exploitation.
Over the last 13 years, and especially since the rise in food prices in 2008, 36 million hectares of land have been acquired in agri-business land deals, mainly driven by the international demand for sugar, palm oil, soy and timber. South East Asia is the region most affected by this trend.
There is no common agreement about the reasons for this growth in the demand for land, but certainly a key factor is the continued aggressive expansion of capitalism in countries like China and India. During the last 30 years, this has caused over a billion rural small-holders and peasant farmers to migrate to the cities and join the urban proletariat, where they've generated healthy profits for the growing semi-comprador bourgeoisie. The net effect is a sharp rise in demand for agri-business products - processed foods, cereals, and animal feed for livestock farming. This is due both to the proletarianization of massive numbers of former peasants who no longer produce as much of their own food, as well as the new wealth of the semi-comprador urban bourgeoisie.
For example, demand for palm oil, a common ingredient in processed foods, has exploded in the last 20 years, with an eightfold increase in land under cultivation, and high levels of meat consumption are driving land acquisition for soy production. Only 16% of soy is used directly for food - the vast majority is used for animal feed.
The involvement of Australian banks in all this should not be a surprise. The big four banks - Commonwealth Bank, Westpac, ANZ and NAB - control over 500 billion Australian dollars in household deposits, equivalent to a third of Australia's GDP, and Australia in on the door step of the two leading nations for large-scale land grabs - Indonesia and Papua New Guinea.
Westpac, for example, has a 19 year old banking relationship with the Papuan operations of the controversial Malaysian logging company WTK Group. According to the Oxfam report, Westpac extends a line of credit and finance to WTK, secured by an interest in the WTK Papuan operators. The WTK parent company manages millions of hectares of forest concessions around the world. In 2012 the Norwegian Government Pension Fund withdrew its holdings in the WTK parent company because of 'unacceptable risk that the company is responsible for severe environmental damage..'. In 1995, the year that Westpac began its relationship with WTK, the then PNG Labour and Employment minister stated in his resignation speech that 'Logging companies are the worst offenders for corruption. Some of the managing directors of these companies have a direct line to our national leaders'. The specific companies supported by Westpac were the subject of a review in 2003 by PNG's Department of National Planning and Monitoring that alleged company use of armed police to threaten villagers and that women employed as domestic servants were expected to provide sexual favours to expatriates in the logging camps. According to Oxfam's own research, WTK also controls a number of SABL's - Special Agricultural and Business Lease Schemes. Since 2003, 12% of land under customary ownership has passed into the hands of logging companies under these schemes. The SABL scheme was supposed to encourage agricultural development, but has been exploited by loggers, and is partly responsible for PNG becoming the world's second biggest exporter of tropical hardwoods. WTK owns several companies involved in these operations via a complicated web of front companies.
Paradoxically, Westpac were lauded as the 'most sustainable firm in the world' at the 2014 World Economic Forum.
ANZ, another of the big four banks, is involved in financing the Phnom Penh Sugar Company, a company that has been associated with child labour and the use of armed gangs to effect evictions. ANZ is believed to have loaned funds to the company via its subsidiary ANZ Royal Bank. Last year, the Cambodian government granted the company a concession to operate two sugar plantations in Cambodia's most impoverished region - Kampong Speu. An investigation by NGO's Equitable Cambodia and Inclusive Development International found a significant number of school-aged children working on the plantation. Phnom Penh Sugar blamed contractors for the practice.