On the 5th of July 2019, Milieudefensie / Friends of the Earth Netherlands lodged complaint before the Netherlands National Contact Point of the OECD (Organisation for Economic Co-operation and Development). This specific instance establishes how ING Group (ING), a Dutch multinational banking and financial services corporation, has breached several provisions of the OECD Guidelines by contributing to specific adverse environmental, human rights, and labour rights impacts caused by subsidiaries of ING’s clients Noble Group Ltd., Bolloré Group/Socfin Group S.A., and Wilmar International Ltd. ING is, amongst European banks, one of the top ten biggest creditors of selected palm oil companies.

The complaint argues that ING was initially only directly linked to these specific impacts through the business relationship between ING and the three clients. However, due to the high degree of foreseen harmful impacts that will be caused by its clients and the failure of ING to take any action that will actually mitigate or decrease the risk of impacts, the bank has come to be an accomplice to the harmful impacts. It is argued that the repeated loans by ING to the Corporation have exacerbated impacts. In other words, although the impacts were highly foreseen, there are no indications that ING made any deliberate efforts to prevent it. The complaint asserts that, as a contributor to the impacts, ING now has a heightened responsibility to cease its support and contribute to remedying the impacts.[1]

AEFJN joined other Belgian NGOs who participated and supported the complaint which echoes the claims addressed for several years to ING Belgium. NGOs have informed ING of violations committed by the palm oil industry since the beginning of the century.[2] “In Belgium too, NGOs have been asking ING for more than four years to stop financing Socfin but the dialogue has yielded no significant result”.[3] The so-called strategy of ING to support problematic companies towards more sustainable practices should be taken only with a grain of salt. However, following the “Stop Greenwash-ING” campaign led by a coalition of NGOs, ING bank announced in January 2019 the suspension of all new financing to Socfin, and strangely backed down on its decision two months later. “The lack of public regulation pushed Belgian NGOs to support this complaint in order to compel the multinationals and the financial sector to respect their commitments and human rights.”[4]

The French and Belgian National Contact Points for the OECD Guidelines have already determined that Socfin, an ING client, has not complied with these principles. Several other financial institutions have ended their relations with controversial palm oil companies, such as the Noble Group.  The Norwegian government pension fund, for example, has stopped funding no less than 33 palm oil companies. In the Netherlands, insurance company Aegon has withdrawn from the entire palm oil sector.[5] Yet, for reasons best known to them, the ING bank is head bent on funding this Corporation.

  • In a statement released the same day that the complaint was filed, the bank says that its approach to engagement and collaboration is consistent with the recommendations of the International Union for Conservation of Nature (IUCN) – the international organisation for nature conservation and sustainable use of natural resources. Even if the growing demand for palm oil across global supply chains raises questions about the environmental and social sustainability of palm oil plantations, it is still a better option. According to ING, alternative oil crops need seven to nine times more land. Therefore, replacing oil palms with another type of oil crop would increase the demand for agriculture land. The bank can’t always prevent environmental and social issues in its clients’ operations, but can collaborate with them to find solutions based on its environmental and social risk policies, the Equator Principles and the IFC (International Finance Corporation) Performance Standards.[6] 

Nevertheless, the palm oil industry is a leading driver of land grabbing, deforestation, climate change, and loss of biodiversity as well as violation of the human and labour rights of impacted communities and workers. In Indonesia for example, “the industrial palm oil sector has been one of the main drivers of deforestation. Every Euro European financiers have been putting into rogue companies meant further expansion of plantations onto peoples’ lands and into forests. Illegalities in the palm oil sector undermine the impact of the Indonesian moratorium on the expansion of industrial activities into primary forests and peat areas.”[7]  In West Africa, “Liberia is at the frontier of industrial palm oil developments and people are suffering from human rights violations. Workers’ rights and child labor are two of their concerns and violations are systemic in the exploitative model of industrial palm oil production. The largest remaining forest areas of the Upper Guinea Forest face depletion if these companies continue to do business as usual.”[8]

Odile Ntakirutimana

[1] Complaint Milieudefensie v. ING Bank: https://userfiles.mailswitch.nl/files/2486-a76b7e1cd0f8d8548255d36db120e43a.pdf

[2] Evert Hassink, Policy Officer at Milieudefensie (Friends of the Earth – Netherlands)

[3] Florence Kroff, coordinator of FIAN Belgium

[4] Sébastien Mortier, Research Fellow at FairFin.

[5] Aegon Netherlands, 2018: https://nieuws.aegon.nl/aegon-nederland-stapt-uit-palmolie/

[6] https://www.ing.com/Newsroom/All-news/ING-reaction-to-NCP-notification-on-palm-oil.htm

[7] Oslan Purba, head of programmes at WALHI /Friends of the Earth Indonesia

[8] James Otto, programs coordinator SDI / Friends of the Earth Liberia