We report on photometric , spectroscopic and polarimetric monitoring of the optical and near-infrared ( NIR ) afterglow of GRB020405 . Ground-based optical observations , performed with 8 different telescopes , started about 1 day after the high-energy prompt event and spanned a period of \sim 10 days ; the addition of archival HST data extended the coverage up to \sim 150 days after the GRB . We report the first detection of the afterglow in NIR bands . The detection of Balmer and oxygen emission lines in the optical spectrum of the host galaxy indicates that the GRB is located at redshift z = 0.691 . Fe ii and Mg ii absorption systems are detected at z = 0.691 and at z = 0.472 in the afterglow optical spectrum . The latter system is likely caused by absorbing clouds in the galaxy complex located \sim 2 ^ { \prime \prime } southwest of the GRB020405 host . Hence , for the first time , the galaxy responsible for an intervening absorption line system in the spectrum of a GRB afterglow is spectroscopically identified . Optical and NIR photometry of the afterglow indicates that , between 1 and 10 days after the GRB , the decay in all bands is consistent with a single power law of index \alpha = 1.54 \pm 0.06 . The late-epoch VLT J -band and HST optical points lie above the extrapolation of this power law , so that a plateau ( or “ bump ” ) is apparent in the VRIJ light curves at 10-20 days after the GRB . The light curves at epochs later than day \sim 20 after the GRB are consistent with a power-law decay with index \alpha ^ { \prime } = 1.85 \pm 0.15 . While other authors have proposed to reproduce the bump with the template of the supernova ( SN ) 1998bw , considered the prototypical ‘ hypernova ’ , we suggest that it can also be modeled with a SN having the same temporal profile as the other proposed hypernova SN2002ap , but 1.3 mag brighter at peak , and located at the GRB redshift . Alternatively , a shock re-energization may be responsible for the rebrightening . A single polarimetric R -band measurement shows that the afterglow is polarized , with P = 1.5 \pm 0.4 % and polarization angle \theta = 172 ^ { \circ } \pm 8 ^ { \circ } . Broad-band optical-NIR spectral flux distributions show , in the first days after the GRB , a change of slope across the J band which we interpret as due to the presence of the electron cooling frequency \nu _ { c } . The analysis of the multiwavelength spectrum within the standard fireball model suggests that a population of relativistic electrons with index p \sim 2.7 produces the optical-NIR emission via synchrotron radiation in an adiabatically expanding blastwave , with negligible host galaxy extinction , and the X–rays via Inverse Compton scattering off lower-frequency afterglow photons .