Australian banks urged to ‘cut ties’ with palm oil firms as $6.4bn investments revealed


Friends of the Earth report says that in financing the likes of Wilmar and Olam International, major banks are complicit in illegal deforestation and human rights violations

The study details 68 reports of human rights and environmental violations in the supply chains of palm oil companies revealed to be funded by four Australian banks. Photo: Friends of the Earth Netherlands

Four of Australia’s largest banks have helped enable deforestation and environmental abuses in global palm oil supply chains by providing more than $6 billion in financing to some of the sector’s largest and most suspect operators, a new Friends of the Earth Australia (FoE) report has claimed.

Via a series of loans, bond holdings and shareholdings, ANZ, Westpac, Commonwealth Bank of Australia and National Australia Bank invested AUD9.5 billion ($6.4 billion) in six companies between 2010 and 2018, according to analysis in the Draw the Line report published in June.

According to the report around AUD$1.3billion ($928 million) would be directly exposed to the palm oil business, given that the companies are involved in various other business sectors.

All four banks were found to have a financial relationship with Wilmar – the world’s largest palm oil firm – as well as separate dealings with Astra International, Goodhope Asia, Noble Plantations Pte, Olam International and Triputra Agro Persada.

The study details 68 reports of human rights and environmental violations – from land grabbing to rainforest destruction – across the palm oil companies’ supply chains.

From 2010 to 2017, the report estimates the four banks had a financial involvement worth AUD2.9 billion ($2 billion) with Wilmar and its subsidiaries and in doing so have supported a company that has been a “notorious subject of scandal”.

In 2018, Greenpeace named Wilmar as buying from multiple Indonesian producers guilty of deforestation, its subsidiaries in Sumatra have reportedly conducted illegal land evictions, while this month Earthsight linked Wilmar’s purchases in Malaysia to illegal deforestation and corruption in Indonesia.

FoE said that the banks’ refusal to “recognise the disastrous consequences” of investing in a sector linked to the widespread destruction of global forests and marginalisation of communities shows the failure of sustainability policies.

“The real challenge is around due diligence as these banks refuse to recognise the disastrous consequences of providing finance to the palm oil sector,” FoE economic justice campaigner Nisha Skillbeck said.

“It is high time the Australian government regulated the banks with regards to their human rights and environmental impact overseas. We call on the banks to cut financial ties with the palm oil sector and to acknowledge that financing this sector carries too much risk for rainforests and the people whose lives and livelihoods depend on them.”

More from Blog

There Will Be Blood / Four key takeaways from our latest report

Continue reading
UK Environment Act / Analyses show exemptions would create dangerous loopholes

Continue reading

Leather / BMW fails to substantiate allegations against Earthsight’s research

Continue reading
It is essential that a mandatory public list of non-compliant businesses is included in the final regulation to curb EU-driven deforestation and forest degradation

Continue reading
Brazil / World’s largest sovereign wealth fund finds beef giant guilty of driving illegal deforestation

Continue reading
Grand Theft Chaco II / Paraguay Senate seeks accountability from government following Earthsight illegal deforestation exposé

Continue reading
EU anti-deforestation law / Suspect timber firms lobby for certified wood ‘green lane’ in draft proposal

Continue reading
Open letter / Paraguay must halt invasions, deforestation of indigenous Ayoreo lands

Continue reading
FSC hall of shame / The ethical wood label’s long line of scandals

Continue reading
Open letter / Ethical wood label FSC is no longer fit for purpose and must urgently reform

Continue reading

Stay up to date with all Earthsight news & updates

Receive email updates for the latest news and insights from Earthsight and be among the first to read our new investigations.

We keep your data secure and don’t share anything with third parties. Read full terms.