HSBC funding destruction of Indonesian Rainforest, report claims - Politics Forum.org | PoFo

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Independent wrote:A major British bank is financing the destruction of vast areas of rainforest in Indonesia, a new report claims.

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HSBC has allegedly helped provide billions of pounds in funding for companies that destroy natural forests to make way for palm oil plantations, in some cases illegally - despite the bank promising to not finance deforestation.

The London-based bank is part of a group that provided over $16 billion (£13.2 billion) in loans and a further $2 billion (£1.7 billion) in corporate bonds to six palm oil producers, according to Greenpeace International.

​Greenpeace alleges the companies have, between them, been involved in a range of illegal or dubious practices, including destroying vital rainforest without permission, exploiting workers, using child labour and seizing land from local people.

HSBC’s sustainability policy says it does not “knowingly” finance deforestation. The allegations about many of the firms it has been involved in lending to have been well publicised.

Annisa Rahmawati, Greenpeace’s Senior Campaigner for Southeast Asia, said: “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?”

HSBC said it was “not aware” of any of its customers breaking the terms of its sustainability policy.

In a statement, a spokesman said: “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.

“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.”

The spokesman declined to comment on the details of loans provided to palm oil producers or confirm whether HSBC would be investigating the claims about it alleged customers.

Endangered orangutans return to rainforest after charity intervention
Greenpeace trawled through financial records and company statements to uncover what it says is HSBC’s financing of six palm oil producers involved in deforestation and other environmental offences.

In one case, HSBC reportedly helped arrange two loans to Bumitama Agri Ltd., which the charity alleges is responsible for clearing and planting 160,000 hectares of palm oil plantations in Indonesia – much of it land that was previously natural peatland and rainforest home to endangered orangutan species. Campaigners have claimed much of the clearing and planting was done illegally, without proper permits or compensation paid to local communities.

HSBC was also closely involved in helping to launch Bumitama on the Singaporean stock exchange in 2012. The company said this move would allow it to “increase the size of our land bank and planted area through selective external acquisitions and additional concessions from the Indonesian government”.

It promised to turn an additional 13,000 hectares per year into palm oil plantations and “clear existing vegetation in such uncultivated land…for planting”.

In its prospectus, Bumitama boasted of its “aggressive planting programme” and said it had turned 120,000 hectares of land into palm oil plantations since 2004. Greenpeace says well over half of this land was planted without full ownership rights or permits being secured. The Independent has contacted Bumitama for comment.

HSBC also reportedly helped arrange $360 million of financing for companies in the Salim Group. Greenpeace alleges “extensive forest destruction” has taken place on the group’s plantations in Kalimantan, Indonesia.

In 2013 the Centre for Orangutan Protection released images it said showed orangutan nests in a forest that was being bulldozed to make way for a Salim Group palm oil plantation. Campaigners rescued several of the orangutans, including two babies.

One of the group’s companies, Indofood, has also been accused of using child labour and abusing workers. An assessment by Accreditation Services International, which carries out assessments of members of the Roundtable on Sustainable Palm Oil industry group, found the company was paying some workers less than the minimum wage.The Independent has contacted the Salim Group for comment.

The other palm oil companies HSBC is said to have funded are Goodhope Carson Cumberbatch, IOI, Noble Group and POSCO Daewoo.

The bank’s own sustainability criteria state: “HSBC will not knowingly finance operations that are illegal, fail to protect high conservation value forests/land or violate the rights of workers and local people.”

The company’s October 2016 statement on climate change claims its criteria “prohibit the finance of deforestation” and admits the destruction of forests is a ‘particularly important’ factor behind global warming.

Analysis suggests 31 million hectares of rainforest in Indonesia have been destroyed since 1990 – an area almost the same size as Germany. Indonesia has now surpassed Brazil as the country with the highest rate of deforestation.

Across the world, up to 15 million hectares of forest are lost every year – equivalent to 48 football pitches every minute.

The destruction of natural forests has been shown to be a leading factor behind global warming, as forests play a crucial role in absorbing carbon dioxide in the environment. 15 per cent of all greenhouse gas emissions are estimated to be a result of deforestation.

Destruction of natural habitats has also placed a number of species at risk of extinction, including orangutans, which are now classed as “critically endangered”. Deforestation and illegal hunting mean the number of orangutans in the world is forecast to drop by 86 per cent between 1973 and 2025.

Deforestation for palm oil plantations has also been blamed for a series of forest fires and resulting air pollution, including a spate of fires in Indonesia in 2015.

A study by scientists at Harvard and Columbia universities estimated almost 100,000 people had died prematurely in Indonesia as a result of smog caused by the 2015 fires. The World Bank estimated the cost of the disaster to Indonesia’s economy was as much as $16 billion (£13.2 billion).

Independent
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It's always nasty to see a large corporation/bank to have absolutely no regard for the nature and environment, though it's hardly surprising.
Problem being with palm oil, none of us is innocent, it's one of the most profilic ingredients of the way of our life.
Take almost any household item you have and it's very likely it contains palm oil, wether it's toothpaste or chocolate chip cookies.
It's the stuff that allows groceries to have longer shelf life in the supermarket, we need it not knowingly because we need those full shelves. Palm oil is one of those ingredients that has shaped the western world to this.
And in countries like Indonesia where they grow it, can we blame the locals for living in a third world country with little opportunity and one possible way to make money is to burn some forest and plant some trees and collect?
They don't have the same education about the harms of what it does, and frankly, I don't think they care, because their life is alot simpler than ours; it's about surviving, getting food on the table.

If palm oil plants could only grow in Canada or Switzerland I think we would have alot better regulation towards how to go about cultivating land for those palms.
Luckily for the thousands of companies who use and need palm oil, this is not case.
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