Tag Archives: logging

Bankers with Chainsaws; how logging corporations cheat through the HSBC

Some big banks do little more than pay lip service to environmental issues. HSBC likes to think of itself as different. It has signed up to many initiatives, including the Equator Principles, a set of social and environmental standards launched in 2003 for project financiers….

Sarawak (Malaysia) has lost more than 90% of its “primary” forests to logging and has the fastest rate of deforestation in Asia. Sarawak has only 0.5% of the world’s tropical forest but accounted for 25% of tropical-log exports in 2010. As timber stocks have become depleted, the loggers have moved into the palm-oil business, clearing peat-swamp forests to make way for plantations. The deforestation has been accompanied by abuses against indigenous groups, including harassment and illegal evictions. Allegations of corruption and abuse of public office dog Abdul Taib Mahmud, Sarawak’s chief minister, finance minister and planning-and-resources minister, who is believed to have firm control over the granting of logging licences. Mr Taib has long denied being corrupt.

Global Witness, a campaigning group, has analysed the publicly available financial records of seven of Sarawak’s largest logging and plantation companies.  [Report in PDF] It identified loans and other financial services from HSBC that it estimates have generated at least $116m in interest payments and $13.6m in fees for the bank since 1977. Although lending has declined over the past decade, HSBC continues to list Sarawak loggers among its clients, in apparent violation of its own Forest Land and Forest Products Sector Policy.

On paper HSBC’s forest policy gets high marks, including from BankTrack, a network of NGOs that monitors lenders. When it was drawn up in 2004, the policy required clients to have 70% of their activities certified by the Forest Stewardship Council (FSC), or equivalent, by 2009, with evidence that the remainder was legal. (The FSC is a global non-profit body that sets standards and does independent certification for logging and forest products.)

Not only did the seven firms analysed fail to meet that deadline, but none has any FSC-certified operations today. Ta Ann Holdings, for example, listed HSBC as a “principal banker” in its 2011 annual report. Ta Ann does not have FSC certification, and has failed to obtain full verification of the legality of its Sarawak concession under the independent “Verified Legal Origin” scheme. The firm has been accused of clear-felling rainforest that is home to endangered orangutan and of cutting down conservation forest for plantations. Ta Ann told Global Witness it is “collaborating closely with HSBC towards achieving full compliance” with its forest policy.

Another forestry conglomerate that is still banking with HSBC, according to its annual report, is WTK Holdings, whose intensive logging is widely believed by pressure groups to have caused landslides that ended up blocking a 50km (31-mile) stretch of river in 2010. None of WTK’s operations is FSC-certified.

In all, Global Witness identified six loans, totalling $25m, made by HSBC to non-compliant Sarawak loggers since the bank introduced its forest policy. HSBC said in 2004 that it would stop doing business with clients that failed to make a reasonable effort to comply by 2009.  The Economist asked HSBC to comment. The bank declined to discuss its clients because of confidentiality, but said it is “not accurate” to state that its clients are in violation of its forestland and forest-products policy. It said current data show that 99% of its forest-sector clients worldwide (by size of lending) are “compliant” or “near-compliant” with its policy. What precisely it means by “near-compliant” is unclear…..HSBC’s  continued involvement, however modest, allows logging firms to claim credentials they don’t deserve. Ta Ann, for instance, has run adverts saying it holds forest-policy certification from HSBC. That looks like a figleaf.

Deforestation in Sarawak: Log tale, Economist, Nov. 3, 2012, at 75

Ready for Rio 2012? Amazon Rainforest, Deforestation and Satellite Tracking

Eight South American countries pledged  to boost cooperation to protect one of the planet’s largest natural reserves from deforestation and illegal trafficking in timber and minerals.  Representatives of Brazil, Bolivia, Colombia, Ecuador, Guyana, Peru, Suriname and Venezuela gathered in Manaus, northern Brazil, also vowed to speak with one voice at next June’s UN conference on sustainable development in Rio.

The Amazon, the world’s largest tropical rainforest, is one of the world’s largest reserves of fresh water.  Tuesday’s (Nov. 22, 2011) meeting involving signatories of the 1978 Amazon Cooperation Treaty (OTCA), focused on the Amazon Fund, a joint initiative launched in 2008 to combat deforestation and support conservation and sustainable development.  “The Brazilian government is committed to revitalizing the Amazon Cooperation Treaty (OTCA),” said Foreign Minister Antonio Patriota as he opened the one-day meeting. “A stronger OTCA is in the interest of member states.”  Also present were his counterparts Ricardo Patino of Ecuador, Suriname’s Winston Lackin, Venezuela’s Ricardo Maduro as well as representatives of other OTCA parties.  They reviewed agreements signed to protect the Amazon and discussed navigation rules on the Amazon river and a joint stance at next year’s Rio conference.

Earlier a Brazilian diplomat, speaking on condition of anonymity, said Brazil, which has the largest tract of Amazon rainforest, was keen on “expediting the process to implement the Amazon Fund.”  The initiative has received donations of nearly $58 million (42 million euros) over the past two years, well short of the initial target of one billion dollars.  It notably seeks to improve satellite tracking of forest deforestation and environmental plans in border areas.  “Sharing forest data among Amazon countries will facilitate the adoption of coordinated policies to combat deforestation and will ensure that we are better prepared for international discussions on sustainable development,” Patriota said.

Last year the Amazon lost 7,000 square kilometers (2,702 square miles), down from the historic peak of 2003-2004, when more than 27,700 square kilometers were deforested.  Officials say Amazon logging mainly results from fires, the advance of agriculture and cattle farming as well as illegal trafficking in timber and minerals.

Ecuador is meanwhile pushing an innovative proposal to combat global warming under which it would not exploit its oil reserves in the Amazon in exchange for international compensation of $3.6 billion dollars over 12 years.

Covering an area of seven million square kilometers, the Amazon is home to 40,000 plant species, millions of animal species and some 420 indigenous tribes, including 60 who live in total isolation.  According to OTCA, 38.7 million people live in the region, roughly 11 percent of the eight Amazon countries’ population.

By Hector Velasco, Amazon countries vow to enhance conservation efforts, Agence France Presse,Nov. 23, 2011

Forest Ownership: government or the people?

Indonesia remains Asia’s most-forested nation, but it has suffered serious deforestation in recent decades, contributing to Indonesia’s status as the third-largest emitter of carbon after the U.S. and China.  And perhaps there is no starker example than Borneo — roughly three-quarters of which belongs to Indonesia, the rest to Malaysia and Brunei.  Conservationists are urging Indonesia’s government to respect the Dayak’s rights to their traditional lands and to affirm their stewardship of the forests based on their animist religion. But in much of Borneo, it appears too late.

Where forests once stood, towns now hum with traffic and commerce. According to Indonesian government statistics, 60 percent of Borneo’s rainforests have been cut down. Only 8 percent of its virgin forests remain, mostly in national parks. Western Borneo is the most denuded.  Efforts to combat deforestation are under way. In May, the Indonesian government announced a two-year moratorium on cutting down virgin forests. As well, a U.N.-backed scheme will see developed countries paying Indonesia to protect its rainforests.  But it’s too soon to say how effective these measures will be, calling into question the sustainability of Indonesia’s current economic boom, which is largely dependent on the extraction of natural resources.

Andy White, a coordinator at the Washington, D.C.-based Rights and Resources Initiative, a coalition of groups focusing on land rights, says confusion over property rights [generates conflict]. “Seventy percent of the territory of the country, tens of millions of people are essentially squatters on their own historic lands,” he says. “And over 20,000 villages are in this contested status, basically sitting on land that they think is their own and the ministry of forestry claims as their own.”  In the future, the children and grandchildren of the indigenous people will not own these lands. They will become beggars or criminals, because the bounty before their eyes is no longer theirs.  Corruption is endemic at all levels of government in Indonesia, but some observers point to the forestry ministry as an egregious example. A recent expose in Indonesia’s Tempo magazine accuses officials from the forestry ministry of filling their political party’s war chests with bribes, which businessmen pay in exchange for tracts of forested land.  The ministry denies the allegations. But Kuntoro Mangkusobroto, a troubleshooter for Indonesia’s president and the chairman of a government task force on deforestation and climate change, says the reports are “not surprising.”  Indonesia’s Corruption Eradication Commission will investigate suspected illegal grants of forested land, but Kuntoro says that the problem has become deeply entrenched and hard to root out. “Forests are a means for the power holder to maintain his power, by giving concessions to the military commander in the regions, governors or those who can support the regime,” he explains. “You cut trees, you got money, OK? And it’s been practiced like that for 40 years.”

Conservationists’ hopes of saving Borneo’s rainforests and its inhabitants’ traditions may be unrealistic, romantic, or simply too late. They may also obscure indigenous peoples’ fight to control the terms on which they develop and modernize. Some Indonesians see the Dayaks as culturally backwards, and many Dayaks themselves seem unsentimental about shedding the ways of their forefathers.

White, of the Rights and Resources Initiative, notes that forests can be re-grown to support communities and store carbon. Indigenous people have the right to choose their own path of development, he adds, and the issue of rights will not go away with the destruction Indonesia’s forests.  “Of course it’s sad, of course it should be stopped, but that does not diminish the importance of this issue,” he says, “or the potential of these lands to be restored and for these communities to live much better lives in the future and for these areas to contribute much, much more to their country’s development.”

Excerpts from Anthony Kuhn, Battle Is Under Way For The Forests Of Borneo, NPR, Aug.21, 2011

See also Rights and Resources Initiative