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.
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.”
