Friends of the Earth Australia media release. June 26, 2019
The Big four banks who were found to be exploiting Australians in the royal commission have been exposed in new research by Friends of the Earth to be financing even worse practices overseas. During the 2010–2018 period, the big four Australian banks had a total financial involvement (across loans, underwriting, bond holdings and shareholdings) of at least US$6.4 billion(AUD $9.5 Billion) in six major companies involved in the palm oil supply chain. Approximately $928 million (AUD$1.3billion) of this would be directly exposed to the palm oil business, given that these companies are involved in a number of business sectors of which palm oil is one.
The report found all four banks had a financial relationship with Wilmar International, who’s subsidiary in West Sumatra, Indonesia, is accused of intimidating locals inhabitants off their native land. Yet this is just the tip of the iceberg. The study uncovers 68 reports of human rights and environmental violations by the palm oil companies that receive funds from Australian banks. From land grabbing to rainforest destruction, these harmful practises are systemic in the palm oil business.
Pak Armis, a village leader of Koto Baru in Indonesia, said “It’s incomprehensible that companies like Wilmar are active on this indigenous land. We’ve worked this land for centuries without any problems. Since PT PMJ [palm oil plantation] came, we are suffering.”
On paper, the four Australian banks have safeguards to prevent funds from being directed to the type of violations uncovered in this report. Yet the sustainability policies of these banks appear primarily to be paper tigers, lacking effectiveness, leadership and transparency when it comes to delivering on the ground. Banks continue to finance palm oil companies which are alleged to be systematically involved in land grabbing and a leading cause of deforestation globally.
Nisha Skillbeck, Friends of Earth Economic Justice campaigner, said "There is a huge lack of transparency for the overseas investments of the big four banks. The real challenge is around due diligence as these banks refuse to recognise the disastrous consequences of providing finance to the palm oil sector. 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” she said.
A full copy of the report is available for download here
For further comment contact
Sam Cossar, Friends of the Earth, Economic Justice campaigner
Email: [email protected]
Phone: 0413 496 570