A screenshot of Oikocredit's website taken on 18 September 2023.

The Netherlands’ National Contact Point for Responsible Business Conduct (Dutch NCP) has accepted and will proceed with a complaint alleging that Oikocredit, a global social investor based in the Netherlands, has contributed to severe adverse human rights impacts in Cambodia’s microfinance sector.

The complaint followed extensive public evidence of widespread and systematic human rights abuses in Cambodia’s microfinance sector, including reports of violations associated with the microloan providers that receive direct funding from Oikocredit. The complaint alleges that Oikocredit was aware of reports of predatory lending, coercive collection practices, and related serious harms in Cambodia’s microfinance sector since at least 2017 yet continued and even increased its investments through 2022.

The Dutch NCP determined in its Initial Assessment published on 15 September that the complaint “merits further examination” after reviewing the allegations against the NCP’s admissibility criteria. The criteria include “whether the issue is material and substantiated, plausible and related to the [OECD Guidelines for Multinational Enterprises]” and “whether there seems to be a link between the enterprise’s activities and the issue raised in the specific instance”.

The complaint was jointly filed to the Dutch NCP in December 2022 by two Cambodian human rights organisations, the Cambodian League for the Promotion and Defense of Human Rights (LICADHO) and Equitable Cambodia (EC), as well as FIAN Germany. The Dutch NCP is a government-supported grievance mechanism for complaints regarding Dutch companies’ responsible business conduct and compliance with the OECD Guidelines.

The next phase of the NCP process will be a dialogue between parties, such as mediation or conciliation, which the Dutch NCP has offered to facilitate. The Dutch NCP will issue a public Final Statement on the case following the parties confidential attempt to reach an agreement. While there is no time limit on the negotiations, if the parties cannot reach an agreement the Dutch NCP will examine the issues and provide recommendations consistent with the OECD Guidelines, before issuing its Final Statement.

“Serious human rights violations in Cambodia’s microfinance sector have been escalating for almost a decade while foreign investors have turned a blind eye,” said Naly Pilorge, outreach director at LICADHO. “Oikocredit and other investors claim to improve the lives of low-income communities. So we expect them to actually remedy the problems faced by long-suffering borrowers.”

LICADHO and EC have published five reports on abuses in Cambodia’s microfinance sector since 2019. Debt Threats, the most recent study co-published by LICADHO and EC in August 2023, details the food insecurity, pressured land sales, child labour, migration, and other abuses associated with overwhelming levels of microloan debt.

LICADHO and EC also filed a complaint on behalf of Cambodian borrowers in February 2022 with the independent accountability mechanism for the International Finance Corporation (IFC) regarding the IFC’s Cambodian microfinance investments. The IFC complaint is currently in the Compliance Investigation phase.

“We are pleased to see the process is moving forward,” said Vuthy Eang, executive director of Equitable Cambodia. “It is time for Oikocredit and other ‘social impact’ investors to stop delaying and start taking concrete measures to remedy the harms they have contributed to.”

For more information, please contact:
▪ Vuthy Eang, Executive Director of Equitable Cambodia, on Signal at (+855) 12791700 (English and Khmer)
▪ Naly Pilorge, Outreach Director of LICADHO, on Signal at (+855) 12214454 (English)
▪ Mathias Pfeifer, Program Officer at FIAN Germany, on Signal at (+49) 17654113988, Email: m.pfeifer@fian.de (English and German)

PDF: Download full statement in English - Download full statement in Khmer
MP3: Listen to audio version in Khmer