Thursday, 9 July 2009

Banks slammed for involvement in palm oil fund-raising

Banks slammed for involvement in palm oil fund-raising

London, 9 July: Three European banks have come under fire from environmentalists for their involvement in a fund-raising by palm oil producer Golden Agri-Resources (GAR), which NGOs claim is involved in rainforest destruction.

Singapore-listed GAR is expecting to raise at least S$311.1 million ($213 million) from a rights and warrants issue currently underway. Credit Suisse, UBS and BNP Paribas are listed as the joint lead-arrangers and underwriters for the fund raising.

But the Berne Declaration and the Bruno Manser Fund have slammed the banks for involving themselves in the deal, pointing to a Greenpeace Indonesia report which earlier this year linked the company’s subsidiary Sinar Mas Group with rainforest destruction. Greenpeace Indonesia has been targeting Sinar Mas for some years, blocking shipments of palm oil from reaching port and holding protests at the company’s headquarters.

A Credit Suisse spokesman said: "Following an in-depth review of the transaction by our experts, we concluded that the transaction is consistent with our global forestry policy and other relevant industry policies.”

BNP was unable to return requests for comment before press time and a UBS spokesman declined to comment. GAR has said the accusations are based on “false information”.

Greenpeace claims that Sinar Mas plans to develop 2.8 million hectares of rainforest in Kalimantan and Papua, in Indonesia – a figure which GAR disputes. “The vast majority of future expansion is likely to involve deforestation, some on peatlands and in the habitats of the critically endangered orangutan,” Greenpeace said in the report.

But GAR denies these accusations, saying it is an "active member" of the Roundtable on Sustainable Palm Oil. It said in a recent statement that it avoids development on primary forest and has a zero burning policy. “GAR aims to be a leader in the oil palm industry underpinned by its high operational excellence, environmental sustainability and highest level of professionalism,” it added.

It also questioned Greenpeace’s information: “Most often, these organisations have limited experience and understanding of the real condition as they refrain or refuse to get into the field to verify what is actually happening.”