On 5 July 2019, Milieudefensie/Friends of the Earth Netherlands, WALHI/Friends of the Earth Indonesia, and Sustainable Development Institute/Friends of the Earth Liberia filed a specific instance against ING Group at the Dutch NCP. The complaint argues that ING Group has breached the OECD Guidelines by contributing to specific adverse environmental, human rights, and labour rights impacts caused by ING’s palm oil clients Noble Group Ltd., Bolloré Group/Socfin Group S.A., and Wilmar International Ltd. or their subsidiaries.
The complaint is the first one filed by NGOs that charges a bank with having contributed to harms of its clients. The complaint argues that ING was initially only directly linked to these specific impacts through the business relationship between ING and these three clients. However, due to the high degree of foreseeability of the harmful impacts and ING‘s failure to actually mitigate or decrease the risk of impacts and continued provision and renewal of loans of a substantial total amount to these clients, ING has come to be in a position of contributing substantially to the harmful impacts.
The complainants are seeking the Dutch NCP’s good offices to encourage ING to take several steps, including to:
- Cease contribution to the harms identified in the case examples by responsibly divesting from the clients named in the complaint;
- Participate independently or with its clients in the remediation of the impacts identified;
- Include improved sustainability and disclosure criteria in its financing contracts moving forward;
- Develop improved due diligence criteria that guarantee credible and timely information about clients’ actual and potential impacts;
- Improve its public disclosure on its engagement with clients about their actual or potential impacts based on its due diligence; and
- Develp clear procedures on when and how it will divest responsibly from clients.
Relevant OECD Guidelines
- Chapter II
- Chapter II Paragraph A10
- Chapter II Paragraph A11
- Chapter II Paragraph A12
- Chapter IV
- Chapter IV Paragraph 2
- Chapter IV Paragraph 3
- Chapter IV Paragraph 5
- Chapter IV Paragraph 6
On 5 July 2019, ING issued a response expressing its willingness “to explain or elaborate on [its] approach, either directly to Friends of the Earth or through the NCP.
On 20 January 2020, the Dutch NCP accepted the complaint.
On 7 April 2022, the Dutch NCP published its final statement. The NCP recounted that the dialogue between the parties ended prematurely. The parties could not reach agreement on whether improvements of ING’s due diligence policies and practices regarding palm oil were required and, if so, what potential improvements would look like. The parties also could not reach agreement on whether ING contributed (or would contribute) to adverse impacts, and whether ING was were (or would be) directly linked to these impacts by its business relationship. The NCP recommended the parties remain in contact about the issues raised in the specific instance, including the shift from directly linked to contributing, the requirements for proper due diligence, and engagement with (or disengagement from) large-scale palm oil production in relation to RSPO certification.
The NCP also made several observations regarding the shift from companies being ‘directly linked’ to ‘contributing to’ an adverse impact:
- “In practice, there is a continuum between ‘contributing to’ and having a ‘direct link’ to an adverse human rights impact: a bank’s involvement with an impact may shift over time, depending on its own actions and omissions. For example, if a bank identifies – or is made aware of – an ongoing human rights issue that is directly linked to its operations, products or services through a client relationship, yet over time fails to take reasonable steps to seek to prevent or mitigate the impact, it could eventually be seen to be facilitating the continuance of the situation and thus be in a situation of ‘contributing.’ Such reasonable steps could for instance be: bringing up the issue with the client’s leadership or board, persuading other banks to join in raising the issue with the client, making further financing contingent upon correcting the situation, etc.”
- In relation to the responsibility of banks to address adverse impacts, including engaging with multi-stakeholder initiatives: “Regarding ING’s due diligence approach through the RSPO, the NCP would follow in principle the line of argument set out in the Friends of the Earth – Rabobank case. Enterprises can collaborate in carrying out due diligence, for instance through multi-stakeholder initiatives. However, participation in such an initiative does not shift responsibility from the enterprise to the initiative for adverse impacts that it causes, contributes to or to which it is directly linked; the enterprise itself remains responsible for ensuring that its due diligence is carried out effectively (OECD 2018, p. 19, 53). Where an enterprise (such as in this case ING) engages in collaboration in carrying out due diligence it should first assess the quality of the initiative (see OECD 2018, p. 53 on what this assessment includes). Acknowledging the increasing criticism, available in the public domain, of RSPO since 2016, the NCP emphasizes the importance of periodic reviews by ING of the appropriateness of its reliance on multi-stakeholder and industry initiatives it participates in as part of its due diligence, such as RSPO. This should include reviewing their alignment with the OECD Due Diligence Guidance for Responsible Business Conduct and their contribution to the enterprise in helping to identify, prevent or mitigate adverse impacts linked to its business, taking into account the independence of these initiatives (OECD 2018, p. 32).”
The Dutch NCP proposed that an evaluation be conducted of its recommendations in winter 2022/2023. The NCP will invite the parties to come together for this evaluation.