- Date filed
- 12 December 2022
- Keywords
- Countries of harm
- Current status
-
No resolution
- Sector
- NCP
Allegations
On 12 December 2022, three NGOs – Cambodian League for the Promotion and Defense of Human Rights (LICADHO), Equitable Cambodia (EC) and FIAN Germany – filed a complaint against Oikocredit at NCP Netherlands. Oikocredit is a global ‘social’ or ‘impact’ investor headquartered in the Netherlands. The complainants allege that Oikocredit has failed to conduct adequate due diligence on its investments in Cambodia’s microfinance sector since at least 2017, despite evidence of harms directly linked to those investments. They also claim that Oikocredit refused to engage safely with local stakeholders as part of its due diligence processes, despite repeated requests from local groups and concerns about reprisals.
In February 2022, LICADHO and EC filed complaints on behalf of affected borrowers against several of the microfinance institutions (MFIs) funded by Oikocredit at the Compliance Advisor Ombudsman (CAO) of the International Finance Corporation.
Outcome
On 15 September 2023, the Dutch NCP accepted the complaint and offered its good offices to the parties. Both parties accepted the offer.
On 19 March 2024, the parties published a joint statement on ‘Strong common ground and commitment to further steps in NCP dialogue relating to microfinance loans in Cambodia’. The parties met to discuss the issues during a dialogue on 13-15 March:
“During the dialogue, there was strong common ground between the parties in their commitment to improve the livelihoods of Cambodian borrowers. There was also a joint recognition of the urgent issues in the Cambodian microfinance sector and the need to take action to address them. The parties have identified and committed to concrete next steps towards a positive outcome of the dialogue.”
On 25 and 28 Janaury 2025, Oikocredit and the civil society complainants issued, respectively, statements acknowledging the close of the mediation process. The complainants regret that no agreement was reached to ensure remedy for impacted parties and address the underlying “widespread, systematic predatory and unethical lending practices of microfinance institutions (MFIs) and banks across Cambodia”. Oikocredit committed in its statement to develop a “framework for an independent mediation mechanism in Cambodia and a complementary solidarity and relief facility.” Oikocredit asserted it had “contracted the services of a consultant” to work with stakeholders to develop the mechanism in line with international standards, including the OECD Guidelines. Oikocredit also committed to operate a pilot of this mechanism and facility. The complainants note that “such a mechanism is desperately needed in Cambodia,” and “regret that Oikocredit’s pledge lacks any specifics around how much money would be provided for relief, or when such a mechanism will begin operating.”
Following the parties’ failure to reach agreement, the Dutch NCP is proceeding to evaluate the claims made and issue a final statement, in which the NCP may issue determinations assessing Oikocredit’s (mis)alignment with the Guidelines and recommendations to support alignment and resolution of the issues in future.
More details
- Defendant
- Company in violation
- Complainants
- Affected people
- Date rejected / concluded
- 25 January 2025