ANZ and Westpac: employees in close network with ASIO

Wall Street assesses the Freeport damage

Concerns about Freeport were discussed quietly on Wall Street. It was generally perceived that the company had massive potential social and environmental liabilities. As a result, Freeport was shunned as a target in the merger and acquisition wave that swept the world copper sector in the mid 1990s. No one wanted to take them over. The perceived risks of acquiring Freeport were too great – in financial terms, it was considered a toxic target with an unsustainable business model and massive potential liabilities. Further, under the US Alien Tort Claims Act, which was widely realised for the first time in 1995 to be a threat to US corporations, foreigners – including indigenous people in Indonesia, were potentially able to sue U.S. corporations in U.S. courts for damages committed outside the U.S.

Freeport critics rightfully claim that lending agencies, and institutions such as Australian commercial banks Westpac and ANZ which were part of the syndicate of banks that financed Freeport in West Papua in the 1990s, should demand environmental and social accountability from their clients and in turn provide accountability and transparency to their own shareholders about such investments. Without such demands, foreign banks lending money to finance Freeport and Grasberg appear to accept the corrupt business practices that prevailed under Suharto and subsequent governments.

Indeed, ANZ was lambasted in The Sydney Morning Herald as recently as 2014 for its failure to uphold reasonable social and environmental standards of the projects it finances, as it claims it does. A confidential 58 page social and environmental audit was leaked of the Phnom Penh Sugar Company’s massive plantation project the bank had funded in Cambodia that used child labour and involved the forced removal of villagers from their land. The article called into question ANZ’s due diligence and sincerity of its commitment to environmental and social standards which appear to be a marketing ploy for retail customers in Australia rather than as a core value despite the bank being a signatory to the ‘Equator Principles’ a voluntary code for which 78 financial institutions globally have committed to avoid financing projects that were socially and environmentally unsound. It appeared as if little had changed in a practical sense from the days the bank openly financed egregious resource projects in out of the way places like Freeport McMoran in West Papua.

David Pred, the managing associate of Inclusive Development International, said ANZ should explain to its shareholders why it financed Senator Phat’s company, especially when the English-language Cambodian press had regularly reported on its links to the army and role in forced evictions.

“Since ANZ does not disclose any of the corporate loans it makes, its shareholders are only left with its good word that it actually upholds the rigorous standards that it purports to apply to its corporate lending operations,” Mr Pred said.[1]

Companies, such as Freeport McMoran, that are listed on the New York Stock Exchange and followed by Wall Street, hold analyst conference calls once a quarter, or more often if required. For these, stockbroking and fund manager analyst’s, sitting at their desk in New York, Boston or wherever, telephone into a company presentation of results. There might be 20, or 50 or 100 analysts’ listening to the call, after which the brokers generally send a report to their firms’ clients.

On one such teleconference call in 1996, Freeport management was presenting the results of the Dames and Moore environmental audit of the Grasberg mine. One of the criticisms of the various environmental audits undertaken by Freeport, including the Dames and Moore report, aside from it not being strictly independent as it was paid for by Freeport, was that the consultant did not take its own measurements and collect its own environmental data but relied on Freeport’s data which was not in the public domain.

Some of the analysts on that conference call expressed disbelief at the way Freeport management represented the audit findings, as if it gave the company a clean bill of health. Management, however, acknowledged that aspects of the report remained inconclusive and that further follow up work had been recommended.

It took many years, but Wall Street concerns were partially vindicated when in June 2006, the Government Pension Fund of Norway, a sovereign wealth fund, announced it had dumped and blacklisted the Freeport’s shares in a widely reported statement due to concerns over Grasberg’s environmental track record. (report).

ANZ and Westpac employees’ connection to ASIO

Companies that had commercial relationships with Freeport acted in other ways to further their commercial interests and some of their employees [names to be provided] aligned with ASIO in a further indication of their disregard for observing even basic human rights.

ANZ, an Australian commercial bank has a specialist natural resources investment banking team and large investment in Freeport through its loan portfolio of many tens of millions of dollars. Its senior mining finance employees engaged in bizarre, hostile behaviour towards me. Senior ANZ staff whom I had never met bad mouthed me to my boss at the company I was working at in Sydney. It came back to me – people asked me if I knew so and so from ANZ and why might he be making such toxic remarks about me. I had never heard of this guy or his sidekick. It made no sense at the time.

I did not stay long with the company. After leaving, a well connected consultant to the firm called me at home and asked: “Who is doing this to you? We want to know.” Directors at the company wanted to know who was behind this assault and why. I could only point to the savage response that had originated from my years at Warburg (now part of UBS). At the time, I did not know that behind all the interference was an attack being co-ordinated by ASIO and their allied foreign intelligence agencies. He asked if I knew certain individuals in the ANZ mining team. I did not. never heard of them. But ANZ had played a significant role in financing Freeport and likely at that time continued to carry that exposure on its books.

Later, ANZ senior employees were exceedingly hostile in response to my job search. It was very tightly managed – harsh and flippant multi pronged response from different team members intended to be disruptive and counterproductive to my job search. Some of the specific details of their behaviour was recounted back to me by the FBI during an interview in 2003.

Similarly senior mining finance employees at Westpac, a lender to Freeport, behaved inexplicably. While I was still living and working in NY, after publishing the report on Freeport I started to receive strange and unexpected visits from a Westpac fund manager from Sydney and was contacted by another Westpac fund manager – both of whom later revealed a connection to ASIO. Another executive in the resource advisory section, some years later after I had moved back to Sydney, [K] stood me up at an interview, he was a no show without explanation. When I did catch up with someone there briefly, they were rude, dismissive and wasting my time; the executive excused himself and left me to speak with a junior. It was odd and unusual treatment. [Further details to come].


[1] Richard Baker and Nick McKenzie, 23 January 2014 ANZ ethics under scrutiny over Cambodian sugar plantation, Sydney Morning Herald.


About mininganalystnow

Former Wall Street Analyst (working for SBC Warburg – now part of UBS) targeted by US and Australian intelligence agencies (FBI and ASIO) after publishing report touching on US State Department investigation into allegations US copper/gold mining company Freeport McMoran was involved in the killing of indigenous protestors in West Papua, Indonesia.
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