NATIONAL BANK INVESTS IN COMPANY ACCUSED OF SELLING MACHINERY USED BY ISRAEL TO DEMOLISH PALESTINIAN HOMES

BGL BNP Paribas is one of the largest banks of Luxembourg’s financial centre. On its website, the French group BNP Paribas, the latest to acquire the historic Banque Générale à Luxembourg (BGL), points to its dominant position in the banking sector at national level. [1] Indeed, on 1 January 2021, the bank employed 4,050 staff, making it the largest employer in the sector and the seventh largest employer in the country. [2]

On its website, BGL BNP Paribas dedicates a large section to its corporate social responsibility activities, explaining how it actively contributes to the SDGs by assuming its « economic responsibility” and its duty to “finance the economy ethically”. [3] The bank further stresses that, “as an economic actor in Luxembourg, it has a responsibility towardsall its stakeholders : its customers, its employees, civil society, its economic partners and its shareholders”.

A closer look at the 2020 annual report shows that the bank is in a business relationship with entities of JCB, a controversial UK group. At the end of 2020, the bank held 25% of the shares of JCB Finance Holdings Ltd, [4] a joint operation between BNP Paribas Lease Group and JCB Financial Solutions UK, fully owned by JCB Service. [5] BGL BNP Paribas also holds shares of the branches of JCB Finance in Germany, Italy and France, indicating a clear business relationship as defined by the UNGP. [6]

JCB is a British manufacturer of construction, agricultural, waste handling and demolition equipment. In September 2018, Lawyers for Palestinian Human Rights (LPHR) called on JCB to ensure that its products were not involved in the imminent demolition of the Palestinian village of Khan al-Ahmar in the West Bank planned by the Israeli government. [7] As there was no response by JCB, and after exhaustive evidence had been gathered on the use of JCB products “in a number of specific demolition and displacement incidents”, LPHR filed a complaint against JCB for involvement in human rights violations in the occupied Palestinian territory with the UK National Contact Point (NCP) for the OECD Guidelines in December 2019. [8]

In February 2020, JCB was listed on the UN database of all companies involved in activities related to Israeli settlements in light of its involvement in “the supply of equipment and materials facilitating the construction and the expansion of settlements and the wall, and associated infrastructures”. [9] The international community considers settlements built on land occupied by Israel to be in violation of international law.[10]

In its conclusions published on 12 November 2021, the UK NCP declared that JCB “did not take any steps to conduct human rights due diligence of any kind despite being aware of alleged adverse human rights impacts and that its products are potentially contributing to those impacts”. [11] The UK NCP recommended JCB to “write a statement of policy which expressly states its commitment to respect human rights” and to “carry out human rights due diligence to assess actual and potential human rights impacts”.

Amnesty International UK published a report in November 2021 entitled “JCB Off Track” which concluded that “JCB’s failure to conduct proper human rights due diligence on the end use of its products represents a failure to respect human rights. This is something the company must do at all times in line with international human rights standards for business, regardless of business opportunity or expediency”. [12]

The UNGP apply to all business enterprises, including commercial banks and other entities in the financial sector, regardless of “size, sector, operational context, ownership and structure”. [13] To meet their responsibility to respect human rights, banks such as BGL BNP Paribas should conduct due diligence. Such a due diligence process “should cover any impacts a bank may cause, those that it may contribute to through its own activities and impacts that may be directly linked to its operations, products or services through its clients or customers (i.e. its ‘business relationships’).” This means that a bank’s own activities include actions and decisions (including omissions) involving third parties, such as providing financial products and services to companies like JCB.

[1] https://www.bnpparibas.lu/fr/bnp-paribas/bnp-paribas-luxembourg/ [2]https://statistiques.public.lu/stat/TableViewer/tableView.aspxReportId=13298&IF_Language=eng&MainThe me=4&FldrName=1 [3] https://www.bnpparibas.lu/fr/bnp-paribas/responsabilite-sociale-environnementale/ [4] BGL BNP Paribas: Annual Report 2020, p. 119 (www.bgl.lu/content/dam/publicsite/pdf/documents- officiels/donnees- financieres/rapports-annuels/en/web_EN_Rapport_annuel_2020_0621_BGL.pdf ) [5] JCB Finance Holdings Limited Directors’ report and financial statements for the year ended 31 December 2020 https://find-and-update.company-information.service.gov.uk/company/06545359/filing-history JCB Service is fully owned by JCB Group Holdings, which is under the direct control of the Bamford family. [6] According to the Guiding Principles, “business relationships” are understood to include relationships with business partners, entities in its value chain, and any other non-State or State entity directly linked to its business operations, products or services, page 16. [7] Lawyers for Palestinian Human Rights (18.09.2018): LPHR urges JCB to ensure its products are not involved in the demolition of Khan al-Ahmar (www.business-humanrights.org/de/neuste-meldungen/lphr-urges-jcb-to- ensure-its-products-are-not-involved-in- the-demolition-of-khan-al-ahmar/). [8] Lawyers for Palestinian Human Rights (10.12.2019): LPHR files OECD Guidelines complaint against JCB for involvement in human rights breaches in the occupied Palestinian territory (www.business- humanrights.org/de/neuste-meldungen/lphr-files-oecd- guidelines-complaint-against-jcb-for-involvement-in- human-rights-breaches-in-the-occupied-palestinian-territory/). [9] Report of the United Nations High Commissioner for Human Rights (12.02.2020): A/HRC/43/71 (https://undocs.org/en/A/ HRC/43/71). [10] Resolution 2334 (2016) adopted by the Security Council at its 7853rd meeting on 23 December 2016 [11] UK National Contact Point (12.11.2021): Final Statement: Lawyers for Palestinian Human Rights complaint to UK NCP about JCB (www.gov.uk/government/publications/lawyers-for-palestinian-human-rights-complaint- to-uk-ncp-about-jcb/final-statement- lawyers-for-palestinian-human-rights-complaint-to-uk-ncp-about-jcb). [12] Amnesty International (2021): JCB off Track. Evading responsibility for human rights violations committed with JCB machines in the Occupied Palestinian Territories, p. 5 (www.amnesty.org/en/wp- content/uploads/2021/11/MDE1549852021ENGLISH.pdf). [13] United Nations High Commissioner for Human Rights (12.06.2017: OHCHR response to request from BankTrack for advice regarding the application of the UN Guiding Principles on Business and Human Rights in the context of the banking sector (www.ohchr.org/Documents/Issues/Business/InterpretationGuidingPrinciples.pdf ).