Who's financing companies that abuse human rights?

Posted By Adam Lewis Wednesday, December 12, 2007 - 7:35 PM Share

Apparently everybody. A report released today by the Belgian group Netwerk Vlaanderen takes a look at international banks that provide loans and investment services to companies with less-than-stellar human rights records. The companies receiving this capital are in industries such as mining, defense contracting and oil and gas—no surprises there.

But what types of abuses are we talking about? Some examples:

Anglo-Indian mining firm Vedanta Resources is accused of forced relocations and allowing its operations to poison local drinking-water supplies in India and Zambia.
Europe's EADS owns shares in Chinese defense contractor AviChina. While EU regulations prohibit EADS from selling equipment to China, investments in AviChina by EADS may have helped the company to supply weaponry to Sudan and Burma.
Even Arkansas-based Wal-Mart makes the list for systematically driving down labor conditions. The report accuses the retailer of purchasing goods made by firms in the developing world known to severely abuse workers.

All told, 121 banks in 24 countries provided the 13 companies highlighted in the report with $13 billion in loans and helped them obtain a combined $43.2 billion in investments. Here are some of the worst banks listed in the survey and the number of questionable companies they each invested in:

Citigroup (United States): 10 companies
Deutsche Bank (Germany): 10
HSBC (United Kingdom): 9
UBS (Switzerland): 9
JPMorgan Chase (United States): 9
Royal Bank of Canada (Canada): 7
Société Générale (France): 7

The really sad part of this entire situation is that many of the banks have internal policies that prohibit investments in companies that violate human rights. In some cases, national laws also prohibit investments. Yet loopholes allow the capital to flow anyway. We can only hope that these same loopholes that allow money to flow to rights-abusing companies don't also allow funding to reach terrorist groups...

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