Banks & Agriculture

Asian Banks Urged to Uphold Rights in Agricultural Sector

Asian banks are failing to offer adequate support to promote human, women’s and labor rights in the region’s agricultural sector, a new study reveals
Vegetable vendors at a market in Phnom Penh. Kiripost/Siv Channa
Vegetable vendors at a market in Phnom Penh. Kiripost/Siv Channa

Banks are not doing enough to promote human rights, women’s rights, and labor rights in Asia’s agribusiness sector, a network of civil society groups has said, urging ASEAN governments and financial institutions do more to commit, in policy and in practice, to respecting and upholding international human rights conventions and global standards.

The remarks came after a roundtable, “Galvanizing Sustainable & Responsible Finance in ASEAN” in Phnom Penh on September 29, which was hosted by Oxfam and supported by Fair Finance Asia (FFA) and Oxfam’s Gender Transformative and Responsible Agribusiness Investments in Southeast Asia (GRAISEA) program.

The roundtable, “Galvanizing Sustainable & Responsible Finance in ASEAN” in Phnom Penh on September 29, 2022. Kiripost via Oxfam
The roundtable, “Galvanizing Sustainable & Responsible Finance in ASEAN” in Phnom Penh on September 29, 2022. Kiripost via Oxfam

FFA Program Lead, Bernadette Victorio, said that from January 2016 to December 2020, a new study “Harvesting Inequality” found that 125 of the largest ASEAN agribusinesses received $22.6 billion from global and regional financial institutions, while 90 percent of these agribusinesses ignored issues related to fair labor practices, transparency and accountability, and gender parity.

“Harvesting Inequality” is jointly FFA-GRAISEA funded. It explores the social impact of financial institutions’ investments in Asia’s agribusinesses and to synthesize and refine gender and sustainable finance policy asks for the ASEAN Chairpersonship under Cambodia this year.

The study also found that 54 highly consequential financial institutions active in the 13 Asian countries covered in the study, scored, on average, two out of 10 for gender equality, human rights, labor rights, and transparency and accountability, based on criteria set out by the Fair Finance Guide International Methodology (FFGI), Victorio said.

“ASEAN governments, and financial institutions must do more to commit, in policy and in practice, to respecting and upholding international human rights conventions and global standards in human, labor, and women’s rights,” she said.

In Cambodia, Phean Sophoan, National Director of Oxfam in Cambodia, said that Oxfam welcomes the participation of top government, business, and civil society experts in this multi stakeholder dialogue focused on sustainable finance and gender issues in agribusiness.

Citing the ‘Harvesting Inequality’ report, Sophoan said that 99.8 percent of female workers in Cambodia’s agriculture sector have informal status, which means they cannot access benefits and protections under the Labor Law.

“As such, they are more vulnerable to chronic poverty, low wages, illness, injury, exploitation, and other socially harmful practices. Oxfam calls on agribusinesses, the Cambodian government, and financial institutions to ensure that the rights of women farmers and workers, and other marginalized groups, are protected,” she said.

GRAISEA Program Lead, Ashley Aarons, said that now is the time for the financial sector to finally take gender equality seriously. This would not just benefit the financial sector as a whole, but also support agribusinesses that rely on an inclusive investment environment.

He added that the financial sector has a huge role to play in promoting resilience and recognizing the rights and agency of women and men farmers to contribute to the agricultural value chain and reduce poverty and inequality in the long-term.

Khut Chandara, member of the Commission on Planning, Investment, Agriculture, Rural Development, Environment, and Water Resources of the National Assembly, said he welcomes the study. However, how the data and mythology has been conducted and collected is still being discussed.

Chandara, who attended the roundtable, said that definitions of terms should also be matching ones set out by the government, including a term of “informal status”, which is different from country-to-country.

He added that the government gave out cash to factory and service workers of $40 each per month during Covid-19 and that researchers of the study compared workers with farmers, who are not registered as a business.

“In reality, we must admit to knowing how many farmers are registered. I talked about this and the roundtable has also recognized this. Only farmers in developed countries are registered, farmers in developing and underdeveloped countries are not registered,” Chandara told Kiripost.

Being registered means that people have to pay taxes, he said, adding that mixing up terms by the researchers of the study cannot solve any issues.

“When looking at the numbers, it is bad but in fact, they do not understand the reality, not just us, the Philippines, Indonesia also talked about it. I forgot everyone who talked about it, this issue is similar for all,” he said. “If we all go to the field together, things are not that dark.”

He added that banks have not been able to issue many loans to businesses due to the risks of economic recessions after Covid and the war in Ukraine.