Illegal logging under way. It only takes ten minutes to cut down trees like this one, which can be as old as 200 years.
Given this, you might be surprised to learn that the World Bank
is investing in a company that is dealing in illegal timber from
the rainforest and has also obtained land in breach of the
country's moratorium. But that's exactly what's happening.
The World Bank's website says that "the Bank does not fund
logging anywhere in Africa and our main advice to the Government of
DRC is not to expand industrial logging". Yet the International
Finance Corporation (IFC), part of the World Bank Group, has
invested heavily in Singapore-based trading group Olam
International to the tune of millions of dollars over the past four
years - at the end of the financial year for 2006, IFC held US$11.2
million in the company's loans and guarantees.
Just two weeks ago, we heard that the DRC provincial authorities
had seized illegal timber shipments from Olam due to non-payment of
local taxes - the barges were carrying $500,000 of illegally-logged
rainforest timber. The area's forest minister CoCo Pembe accused
the company of trading in illegal timber, cut by local companies
whose logging permits have expired. Yet the World Bank denies that
IFC is doing anything wrong.
In addition, we have clear evidence that Olam has purchased
logging titles in breach of the 2002 moratorium which expressly
forbids the allocation of more land for logging.
Right hand not talking to left?
It would seem that the left hand of the World Bank doesn't know
what the right hand is doing, and it's not just this distant and
impersonal institution exhibiting double standards - some high
street banks are also funding forest trashing activities. Take
HSBC, whose recent advertising campaign would lead you to believe
it was the greenest bank around. Its 'Forest Land and Forest
Products Sector Guidelines' state that it "will not provide
facilities and other forms of financial assistance [for] logging
operations that are in violation of local or national laws in
respect of illegal logging". And yet, along with the Royal Bank of
Scotland, they provide financial services directly to Olam.
A woman from a forest dependant community
When questioned by our campaigners about the relationship with
Olam, HSBC CEO Stephen Green said that he was unable to comment
further on the relationship for "legal and regulatory reasons"
although he was keen to reassure us that "where issues are brought
to my attention they are thoroughly investigated and acted upon if
they are found to be in conflict with our environmental standards
All well and good, Stephen, but surely the point of having a
sound environmental policy is to prevent HSBC getting into bed with
dodgy companies in the first place. Especially companies like Olam,
whose activities directly contradict HSBC's own forest policy. Mind
you, it's not just HSBC - both Barclays and Prudential are
shareholders in Olam.
If financial institutions put their money quite literally where
their mouth is, they can force companies to adopt more responsible
practices - without investment, companies like Olam can't continue
to make vast profits from environmental destruction. The World Bank
could look a bit more closely at its own guidelines and make sure
its funds are used to increase forest protection and alleviate
poverty instead of funding rainforest destruction.
Meanwhile, it's always worth looking more closely at what your
own bank gets up to - without our hard-earned cash, they can't
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