One of Australia's biggest agricultural lenders, National Australia Bank (NAB), will no longer finance businesses non-compliant with animal welfare rules.
NAB is the first of the big four banks to crack down on poor treatment of animals by implementing animal welfare principles that will guide future lending decisions.
The principles apply to any businesses involving animals and were announced as part of the 2019 NAB Sustainability Report, which sets out the major bank's performance and approach to animal welfare and environmental issues.
In a statement, a NAB spokesperson said it understood the agricultural industry was a fundamental part of Australia's economy and maintaining its integrity was critical to its long-term sustainability.
"The new animal welfare principles reflect balanced input from a number of industry associations, animal welfare organisations, and other stakeholders," the spokesperson said.
"NAB will review the principles periodically against the latest developments in relevant legislation, standards, regulations, and animal welfare science."
Other financiers may follow
NAB said the principles were based on "generally accepted, contemporary, scientific understanding of animal welfare" and were in line with international conventions, and Federal and State Government regulations.
The bank expected customers to meet the needs of animals in the domains of nutrition, health, behaviour and mental state and will cease dealing with businesses if there is evidence of a significant breach of welfare rules.
The RSPCA welcomed the move and its scientific officer for farm animals, Melina Tensen, said it reflected increasing community expectations around the treatment of animals.
"We certainly had some input into earlier drafts of the policy and we're encouraged to see NAB and other banks are coming to us for advice on what appropriate animal welfare lending policies might be," she said.
"We're hoping this announcement by NAB will encourage other major banks to see animal welfare as a core part of their business and lending practices."
Paul McKenzie is a WA-based agribusiness consultant with Agrarian Management and has 16 years' experience in rural finance.
He said NAB's animal welfare principles provided good, sensible lending guidelines for customers and staff.
"Financial institutions are risk-averse, particularly in a post-Hayne royal commission world. Having said that, I don't view this as a publicity stunt or anything that might be branded as such by cynics," Mr McKenzie said.
"The banking sector could be called a compliant oligopoly because when one bank does something the rest tend to follow shortly afterwards."
Mr McKenzie did not think farmers had anything to be worried about.
Mixed industry reaction
Western Australian Farmers Federation vice-president and livestock producer Steve McGuire said any bank lecturing farmers on ethics was "laughable".
"NAB has the right to do it, just as any farmer has the right not to deal with NAB," he said.
"Just as NAB would lend money to someone with a criminal record, we must always allow someone who has done the wrong thing in the past the chance to show they've reformed."
Holly Ludeman is a veterinarian in the live export industry and is part of the Sheep Collective, which is an organisation that advocates for the live export industry.
She supported the bank's new lending policy and said the industry was providing information and education for anyone doing due diligence on the live export industry.
"We're offering vessel tours and feedlot tours specifically for the banking sector and insurance companies, so they can … understand what they're making decisions about," Ms Ludeman said.
Ms Ludeman said the proactive approach would, hopefully, prevent bankers from making "reactionary" decisions.
