HSBC Denies Deforestation Loans for Indonesian Palm Oil Industry
27 Jan 2017 --- HSBC is denying involvement with funding deforestation in Indonesia following a Greenpeace International report that claims the bank loaned hundreds of millions of US dollar to what it describes as “destructive palm oil companies.”
Greenpeace International’s “Dirty Bankers” report says that in the past five years alone, HSBC has been part of banking syndicates that arranged US$16.3 billion of loans (and nearly US$2 billion of bonds) to companies whose palm oil operations have destroyed vast areas of rainforest, peatland and orangutan habitat in Indonesia.
It is widely acknowledged that deforestation and peatland destruction by palm oil companies operating in Indonesia, the world’s largest producer of palm oil, are the root causes of forest fires and haze.
“HSBC claims it’s a respectable bank with responsible policies on deforestation. But somehow these fine words get forgotten when it’s time to sign the contracts. Deforestation causes devastating fires that threaten the health of millions across Southeast Asia, and our global climate. So why is HSBC helping to raise billions for the companies fanning the flames?” says Annisa Rahmawati, senior forest campaigner for Greenpeace Southeast Asia.
The environmental group claim that companies in Indonesia’s palm oil sector use deliberately complicated corporate structures to avoid scrutiny. But by analyzing corporate financial data and company accounts, as well as through field research, Greenpeace International has traced those responsible for forest destruction back through their parent companies to HSBC and a host of other international banks.
“The smoke that comes from clearing forests and draining peatlands puts my family in danger, year after year. The banks and companies driving this crisis must take responsibility for polluting our air,” said Nilus Kasmi Seran, an indigenous Dayak and volunteer firefighter from Ketapang, West Kalimantan.
However, HSBC has strongly denied that it is knowingly involved with financing “illegal” operations.
“HSBC’s policies prohibit the financing of operations that are illegal, damage high conservation value forest/landscaping or violate the rights of workers and local people,” says a statement sent to FoodIngredientsFirst.
“HSBC does not knowingly provide financial services which directly support palm oil companies which do not comply with our policy. We are not aware of any current instances where customers are alleged to be operating outside our policy and where we have not taken, or are not taking, appropriate action.”
Greenpeace analysis of figures released by the Indonesian Ministry of Environment and Forestry suggest 31 million hectares of Indonesia’s rainforest has been destroyed since 1990 - an area nearly the size of Germany.
Indonesia has now surpassed Brazil as the country with the world’s highest rate of deforestation, and today less than half of its peatlands remain forested.
The Greenpeace report follows a trend of campaign groups and industry scrutinizing the palm oil sector, particularly in Indonesia and Malaysia. There is increasing pressure on companies to clean up their supply chains.
Earlier this month Unilever signed a three-year Memorandum of Understanding (MoU) with provincial and central governments in Indonesia to drive the sustainable palm oil sector and support a jurisdictional approach to sourcing at village level.
While Cargill received plaudits for the environmental management of its palm oil mills in Indonesia. Cargill’s palm oil mills at PT Hindoli and PT Harapan Sawit Lestari were praised for green practices by Indonesia’s Ministry of Environment and Forestry and Ministry of Industry.
And just yesterday, DuPont Nutrition & Health announced its further commitment to sustainability by completing its switch to 100% certified sustainable palm oil and palm oil derivatives used in its Global emulsifier production. The achievement is the latest milestone since the company pioneered the introduction of sustainable palm oil emulsifiers in 2009.
The new development means that the remainder of the company’s entire global range of palm-based emulsifiers is now based on RSPO-certified sustainable palm oil and derivatives, which promotes the production of palm oil with greater consideration of its environmental and social impacts.
by Gaynor Selby
