Statement on the ending of the Dutch National Contact Point mediation process from The Cambodian League for the Promotion and Defense of Human Rights (LICADHO), Equitable Cambodia and FIAN Germany:

The mediation process that followed a specific instance filed to the Dutch National Contact Point (NCP) in December 2022 regarding harmful human rights abuses in Cambodia's microfinance sector has ended on Friday without an agreement between the NGOs and Oikocredit.

We regret that mediation did not result in timely remedy and tangible relief for Cambodian borrowers. They desperately need and deserve a functioning grievance mechanism and financial compensation from international investors, who continue to profit as borrowers continue to suffer.

Several things remain as true today as they were when this process began more than two years ago. Cambodian borrowers are still being harmed by widespread, systematic predatory and unethical lending practices of microfinance institutions (MFIs) and banks across Cambodia, including those Oikocredit has previously invested in and those it continues to invest in. It is clear to us that Oikocredit's investments contributed to harms and failed to comply with the OECD Guidelines. Investors such as Oikocredit have failed to meaningfully contribute to remedy for those harms. It is disappointing and frustrating that an agreement could not be reached to address these problems.

While we believe Oikocredit has a responsibility to act, this responsibility also applies to other investors in the sector. It is long past time for all international investors to acknowledge the harms on the ground and provide meaningful remedy to help suffering borrowers. Just weeks ago, an investor made up primarily of European state development banks sold its majority ownership of one of Cambodia's largest MFIs in a deal valued at $550 million USD. European development banks such as FMO, AFD, KfW, and the International Finance Corporation are still reaping the financial rewards of over-indebtedness and predatory lending practices in Cambodia, while borrowers continue to suffer alone, with nowhere to turn and no relief. This crisis has been escalating for years, and yet there remains no end in sight.

In its statement announcing the end of the NCP process, Oikocredit pledged to develop a framework for an independent mediation mechanism and a solidarity and relief facility, in-line with international standards, including the UN Guiding Principles on Business and Human Rights. Such a mechanism is desperately needed in Cambodia. We regret this pledge lacks any specifics around how much money would be provided for relief, or when such a mechanism will begin operating.

For our clients, a pledge does not feed their children, protect their land from rapacious credit officers, or prevent a debt-driven suicide in their family. Only timely and financially significant contributions to remedy provide that relief. We will continue to pursue such remedy from all the investors in Cambodia's microfinance sector. We again call for all investors in Cambodia’s microloan sector to provide immediate financial remedy to borrowers suffering human rights abuses due to their loans.

We thank the Dutch NCP for providing its good offices. It provided professional and impartial mediation, and we deeply appreciate its work and commitment to promoting the OECD Guidelines for Responsible Business Conduct.

This joint statement is endorsed by:
1. The Cambodian League for the Promotion and Defense of Human Rights (LICADHO)
2. Equitable Cambodia (EC)
3. FIAN Deutschland e.V. (FIAN Germany)

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)

PDF: Download full statement in English - Download full statement in Khmer