A new Global Witness report reveals how more than 300 financial institutions funnelled money into global beef, leather, palm oil and rubber firms linked to deforestation
More than 300 banks and investors were named as financing firms linked to commodity-driven deforestation.
Six of the world’s “most harmful
agribusinesses” with operations impacting tropical forests are backed by $44bn
of financing from more than 300 banks and investors, including household names
such as Barclays, HSBC, Santander, Goldman Sachs, JP Morgan, and Morgan Stanley,
a new Global
Witness report reveals.
Based on financial research by
consultancy Profundo covering the period 2013-2019, the report found funders
lending to or investing in agriculture operations that drive global
deforestation – often in violation of the banks’ own forest conservation
The six agribusiness firms
featured include three major Brazilian ranchers and meatpackers JBS S.A.,
Marfrig Global, and Minerva Foods, Cameroonian rubber plantation owners Halcyon
Agri Corp of Singapore, Gabonese oil palm plantation developers Olam Group
(also of Singapore), and Rimbunan Hijau Group, a Malaysian conglomerate with
vast oil palm holdings in Papua New Guinea (PNG).
The companies are variously
accused of massive deforestation – often illegal – in the production of the
commodities they trade, including beef and leather, rubber, and palm oil.
In Brazil, the world’s biggest
meatpacker, JBS S.A., has been repeatedly found to buy cattle from illegally
deforested ranches, including
in 2019. In 2017 the company was fined R$24.7m (£6.5m) for cattle purchases
linked to illegal deforestation. The same year its parent company was fined a
further R$10.3bn (£2.4bn) in a leniency agreement with state prosecutors for
making illegal campaign donations to 1,829 candidates from 28 political parties
over more than ten years.
Yet the Global Witness report
finds that JBS has maintained major financiers among its significant
shareholders, including the Brazilian Development Bank BNDES ($2.7bn in JBS
stock as of April 2019), Capital Group ($800m of JBS shares), Blackrock ($218m
of JBS shares), and Deutsche Bank ($11m of JBS shares).
Last month an Earthsight investigation revealed
JBS’s Brazilian beef has for years been used for UK military operational ration
packs supplied by Vestey Foods. Vestey – a major customer of JBS – has also
held catering contracts with the armed forces of Ireland, France and Denmark.
Vestey also has a ration packs contract with the United Nations, and has
received shipments from JBS described as ‘RP Minced Beef … UN Halal’.
In May, Earthsight also
identified JBS’ beef being sold in major EU supermarkets including
Sainsbury’s, Asda, Lidl, Morrisons, and Carrefour.
In the Congo Basin, the report
found that the Netherlands’ third-largest bank ABN Amro and Singapore’s DBS
Bank had facilitated a $388m revolving credit facility for Singaporean firm
Halcyon Agri Corp, which had taken control of tens of thousands of hectares of
The plantations adjoin Cameroon’s
Dja Faunal Reserve, a UNESCO World Heritage site. Greenpeace have accused the
local Cameroonian operator Sudcam of clearing 11,600 hectares of forest between
2011 and December 2018.
The report found that while the
world’s largest sovereign wealth fund – the Norwegian Pension Fund Global – had
divested its stake in Halcyon on environmental risk grounds, China Development
Bank – a state owned “policy bank” remained Halcyon’s biggest shareholder.
In PNG, the report focussed on
financing for the Rimbunan Hijau Group which controls tens of thousands of
hectares of palm oil operations in the country. Previous Global Witness
research had identified “credible allegations of fraud and forgery perpetrated
at the expense of indigenous landowners” and 20,000ha of deforestation at its
plantations in the province of East New Britain since 2008.
Financial research flagged up $6m
of Rimbunan Hijau Group shares held by the office of Sarawak’s State Financial
Secretary of Malaysia and $33m in loans from Malaysia’s Affin Bank.
Global Witness highlights the
role of such deforestation in driving biodiversity loss, human rights
violations and climate change, and argues that “Governments’ failure to
regulate the financing of deforestation has left the foxes in charge of the
The report calls for government regulation of the finance sector to “stop the financing of, and investment in, deforestation”, as well as for financiers themselves to commit to “Deforestation and Land Grab free” policies, implementation of due diligence on investments, enforcement of such policies, and active support for government regulation.