The UK National Contact Point for Responsible Business Conduct, a government body that monitors the operations of British multinational enterprises, has accepted a complaint against Standard Chartered bank for co-financing the construction of four coal-fired power plants in the Philippines, which have caused environmental, economic and health-related harms in surrounding communities.
“To this day, communities suffer from worsening air and water pollution, deteriorating health conditions, and the loss of their livelihoods, and they face the threat of reprisal. Acceptance of this complaint provides a glimmer of hope to remediation of direct, indirect and cumulative harms. Co-financiers must ultimately be held accountable for adverse investment outcomes—for funding destructive and harmful projects. There is a real opportunity here for Standard Chartered to realize corrective actions. It must start by acknowledging the problem and its responsibility,” said Aaron Pedrosa, Legal Counsel of the Philippine Movement for Climate Justice, representing the coal affected communities.
The complaint was submitted on behalf of the affected communities by a coalition of non-governmental organizations, including the Philippine Movement for Climate Justice (PMCJ), BankTrack, Inclusive Development International and Recourse. It alleges that Standard Chartered failed to conduct effective due diligence and contributed to human rights violations and a range of adverse environmental and social impacts by financing the plants’ construction, which it now has a responsibility to help remediate.
High-profile harms
The four coal plants have long been the subject of community opposition and scrutiny from environmental and human rights groups. In addition to the climate impacts of coal-fired power itself, the plants continuously produce fly ash that scatters into the surrounding environment, polluting water sources, croplands, and grazing areas for livestock. Local communities have reported increased respiratory and skin disease, land dispossession, eviction and impoverishment directly resulting from the construction of the power plants.
An investigation prompted by a 2017 complaint to the Compliance Advisor Ombudsman of the International Finance Corporation (an IFC financial intermediary client was also among the plants’ co-financiers) concluded that the plants had likely caused harm “of a significant nature,” including public health and economic impacts, impacts related to displacement and resettlement, and threats against and intimidation of community activists. Greenpeace protesters have been assaulted by guards protecting one of the plants addressed by the complaint and, tragically, the high-profile murder of Filipino land defender Gloria Capitan occurred following her activism opposing one of the coal plants owned by San Miguel Corporation that was co-financed by Standard Chartered. Standard Chartered has an ongoing banking relationship with San Miguel.
An opportunity to make amends
“Standard Chartered financed these plants despite the health and environmental harms it knew—or should have known—would follow. Standard Chartered says in its Human Rights position statement that it will provide remedy or cooperate in remediation processes when it contributes to adverse impacts. So far, it has failed to live up that promise, but now it has an opportunity to come to the table with representatives of the affected communities and put its human rights commitments into practice,” said David Pred, Executive Director of Inclusive Development International.
Complainants are calling on Standard Chartered to enter into mediations aimed at repairing the harms that the communities have suffered, both by using its leverage with the coal companies it financed—and in some cases continues to finance—to implement the remedial recommendations that arose from CAO investigation process and to contribute directly to remedial actions and mitigation measures where it can. The remedial actions sought by complainants include the early closure of three of the coal plants (SMC Limay, SMC Malita and Masinloc), a resettlement audit, health interventions, livelihood restoration programmes, and measures to monitor and improve air and water quality. They are also asking the bank to strengthen its policies and practices on remediation and harm prevention more broadly for the future.
“By continuing to finance San Miguel, Standard Chartered remains entangled with a conglomerate that keeps aggressively expanding fossil fuels. The impacts lamented by these Philippine communities are clear examples of the appalling human rights violations that are often linked to coal-fired power plants and that San Miguel is willingly perpetrating for profit. Standard Chartered should not leave its human rights commitments merely on paper, but instead recognise its role in these violations, join the mediation process, and ensure remedy for the affected communities,” said Camilla Perotti, Banks and Coal Campaigner at BankTrack.
“By financing these coal plants, Standard Chartered not only harmed local communities, but also increased the climate vulnerability of the Philippines which is facing increasingly severe climate impacts and typhoons each year. While Standard Chartered has since recognised the damage that coal finance can do to people and planet, and has committed to stop, it should do the right thing and help to remedy the problems that its past financing has caused,” said Daniel Willis, Finance Campaign Manager, Recourse
Now that it has reviewed and accepted the complaint, acknowledging that the allegations merit further examination, the UK National Contact Point will offer voluntary mediation to both parties. If either party declines, it will then conduct a further examination of the complaint to determine whether the company acted consistently with the OECD Guidelines.
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For more information, please contact:
Daniel Willis, Finance Campaign Manager, Recourse (UK time zone)
dan[at]re-course.org, +447595054391
Mignon Lamia, Communications Director, Inclusive Development International (U.S. Eastern Standard time zone): mignon@inclusivedevelopment.net