Kiwibank: No to palm oil, porn, & predatory lending, but terrorism?...
The curious tale of the Kiwi bank and the terrorist group
If there is one sympathy to be had for modern big corporates it’s this: in our ever-more polarised world, brand alignment can be a fraught marketing tightrope. Balancing the competing pressures to go, or resist, ‘woke’ is now a real strategy and performance consideration for companies, with very real share price risks and opportunities.
What’s generally not seen as contentious however is brand alignment with terrorist organisations. So when I when I recently read a right-wing blogger’s article about an independent journalist’s story on a left-wing activist group supporting a terrorist group via a Kiwibank account, I was curious to know more.
So, what’s the claim?
Right-wing Political activist and blogger David Farrar recently wrote about a Chris Lynch story on the New Zealand group PFLP Solidarity Aotearoa fundraising for the Popular Front for the Liberation of Palestine (PFLP) using a Kiwibank account. A cursory check of their site and listed bank account confirms this is an accurate claim.
His quarrel is the PFLP is designated as a terrorist organisation by the United States, Canada, the European Union, and several other countries. As such, this raises some significant ethical and legal questions about the involvement of a prominent New Zealand financial institution potentially facilitating the transfer of funds to a designated terrorist group.
So, who are the PFLP?
PFLP Solidarity Aotearoa describes the PFLP as a secular left-wing liberation movement who have been actively resisting Israeli occupation for over fifty years.
The United States National Counterterrorism Center takes a slightly more critical view, describing the PFLP as a terrorist group combining Arab nationalism with Marxist-Leninist ideology who see the destruction of Israel as integral to the struggle to remove Western capitalism from the Middle East, and ultimately seek to establish a Communist Palestinian state with Jerusalem as its capital.
As we have seen throughout history (and the Star Wars saga) - one person’s freedom fighter is another persons terrorist.
Founded in 1967, the PFLP has engaged in numerous operations over the years, including airplane hijackings, bombings, and assassinations.
It’s understood that while their ‘operational tempo’ has reduced in the last five years, they remain active and maintain relationships with other terrorist organisations, such as Hezbollah and Hamas.
The PFLP’s view, unsurprisingly shared by PFLP Solidarity Aotearoa, is the right of the Palestinian people to resist occupation by the Israeli state.
While it’s the fashion to argue sides and signal virtue on the unimaginable situation in Gaza, I’m a fan of diplomacy and reason as first principles. What HAMAS did on October 7 2023 and since is barbaric. Israel’s response has been horrific. In a perverse dance of justification, malice, pig-headedness and inhuman cruelty - to me at least both side’s representatives have forfeited the moral high ground while civilians once again bear the tragic consequences.
But the fact remains - the PFLP are currently a designated terrorist organisation by New Zealand’s allies.
Kiwibank's Involvement and the Ethical and Legal Implications
Kiwibank's association with fundraising efforts for the PFLP is concerning. While they are free to take a stance on social issues, they aren’t as free when it comes to New Zealand’s Anti-Money Laundering and Countering Financing of Terrorism Amendment Act 2017 or international law.
Kiwibank’s Responsible Business Banking policy outlines the entities they wont provide banking services to. Interestingly, while Kiwibank are commendably taking a stand against palm oil, porn, and predatory lending, they notably don’t rule out terrorist entities here. I’m not a banking policy expert, but this strikes me as somewhat of an oversight.
When one digs further into ‘Kiwibank’s Code’ however, they are more explicit:
“Kiwibank complies with economic and trade sanctions imposed by New Zealand and other jurisdictions and international bodies. These sanctions prohibit us from doing business with certain countries, organisations and individuals who have been identified as having links to terrorism or other criminal activity.”
This to me seems more cut and dry. Yet the situation stands which begs the question, why? Financial institutions play a critical role in preventing the flow of funds to terrorist organisations. Aside from being contrary to their own code, by allowing its services to be used for such purposes (regardless of it’s potential views on the Gaza conflict), Kiwibank are jeopardising their reputation and potentially putting themself in an ethical, legal and policy conflict of their own.
So, where to from here?
Regardless of where one sits on the Gaza conflict, whilst the PFLP is designated as a terrorist organisation by New Zealand’s allies, Kiwibank should do two things.
Firstly it should take immediate and decisive action to sever any ties with fundraising efforts for the PFLP, and any other terrorist group. As a responsible financial institution, and in line with it’s own code, it has a duty to ensure its services are not used to support terrorism whether it agrees with the designation or not.
Secondly, it should update it’s Responsible Business Banking policy to include terrorist entities - if it’s going to be explicit on tobacco, it should be explicit on terrorism.
Meanwhile, if PFLP Solidarity Aotearoa believe there is a justified argument for removing the terrorist designation on the PFLP, they should lobby the New Zealand Government with supporting evidence to pursue that objective through the appropriate diplomatic channels. Freedom of speech and freedom of association do not translate to freedom from the rule of law.
As for Kiwibank customers and the relevant oversight bodies, it will remain to be seen how they respond to Kiwibank’s handling of the situation, or not, from here.
As always, stay curious.