Mackenzie Financial Investments linked to illegal rainforest destruction

Feature story - April 11, 2012
UPDATE: Mackenzie Investments has announced that it will no longer be investing in Asia Pulp and Paper’s (APP) pulp operations. Until APP stops destroying rainforests and critically endangered Sumatran tiger habitat, it will keep shedding customers and remain a pariah in the investor community.

Sumatran Tiger (Panthera tigris sumatrae), one of an estimated 400 remaining remaining in the wild. © Fotosearch

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Greenpeace reveals Canadian investment giant Mackenzie Financial is investing $24 million in an Indonesia mill owned by pulp and paper giant Asia Pulp and Paper (APP), which launders illegal timber to fuel its operations. 

“As an Imagine Canada Caring Company, Mackenzie Financial claims to embrace corporate citizenship and commits, in theory, to following ethical and environmentally responsible business practices,” said Shane Moffatt, forest campaigner for Greenpeace Canada. “Mackenzie’s investment in APP’s rainforest destruction not only makes a mockery of their commitment to corporate citizenship, but is also both economically unsound and environmentally destructive.”

 

“As an Imagine Canada Caring Company, Mackenzie Financial claims to embrace corporate citizenship and commits, in theory, to following ethical and environmentally responsible business practices,” said Shane Moffatt, forest campaigner for Greenpeace Canada. “Mackenzie’s investment in APP’s rainforest destruction not only makes a mockery of their commitment to corporate citizenship, but is also both economically unsound and environmentally destructive.”

Major companies like Xerox, Staples, Mattel and Lego have cancelled contracts with APP as a result of the grave peril posed to their brand by the supplier’s toxic reputation. Without significant change and a commitment to sustainable operations, contract cancellations will continue to grow and undermine the financial benefits of investing in APP.

After a yearlong investigation, Greenpeace recently revealed that the Indah Kiat mill is systematically violating Indonesia’s laws protecting ramin, an internationally protected tree species. In addition to sourcing illegal timber, the mill’s destructive practices wreak havoc on the habitat of critically endangered species like the Sumatran tiger, down to an estimated 400 in the wild.

Stockpiles of timber at PT Indah Kiat pulp and paper plant in Perawang owned by the APP group. © Greenpeace / Daniel Beltrá

 

“Until APP cleans up its act and follows through on its commitment to stop destroying natural rainforest and critically endangered Sumatran tiger habitat, Mackenzie Financial has no business investing in their destructive operations,” said Moffatt.

APP is mainly privately held by family insiders, but continues to have subsidiaries listed on the Jakarta stock exchange. This includes Indah Kiat, whose share price fell a massive 25 per cent last year. In a January interview with the Globe and Mail, famed emerging markets investor and executive chairman of Templeton Emerging Markets Group, Mark Mobius, described APP as his “worst investment ever.”

 

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