-Caveat Lector-
Subject:
FORESTS: Financial Institutions Threaten Rainforests
Date:
Sat, 10 Mar 2001 22:17:47 -0600 (CST)
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WORLDWIDE FOREST/BIODIVERSITY CAMPAIGN NEWS
Financial Institutions Deforest Indonesia, Threaten Other Rainforests
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Forest Networking a Project of Forests.org, Inc.
http://forests.org/ -- Forest Conservation Portal
http://forests.org/web/ -- Discuss Forest Conservation
03/06/01
OVERVIEW & COMMENTARY
Irresponsible financial institutions are the engine driving the
growth machine devouring the World's ecosystems. A recent report
highlights the extent to which Indonesia's pulp and paper production
was financed by government-backed export credit agencies. Without
government subsidies, the magnitude of industrial logging would have
been much less. Below are two articles regarding the worsening
situation in Indonesia. Illegal logging, driven by demand created by
the over-sized industry, is wiping out habitat for wild orangutans,
which may be extinct in the wild in 10 years. It is critical that
Indonesia implements a moratorium on logging in old growth forests
and renews its commitment to national parks.
If there is to be any natural World left standing, private and
government financiers must develop social and ecological guidelines
for project funding. Increasingly groups such as Rainforest Action
Network, which is targeting Citigroup, are drawing much needed
attention to financial institution's impacts upon rainforests and the
well being of local communities. Below you will find AIDEnvironment
and Profundo'a first issue of "Focus on Finance initiative". The
newsletter highlights four case studies where forest issues and
financial institutions meet - drawing attention to the relation
between private capital flows and forest destruction.
g.b.
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RELAYED TEXT STARTS HERE:
ITEM #1
Title: Developed Countries Helped Deforest Indonesia, Report
Claims
Source: Copyright 2001 InterPress Service
Date: February 21, 2001
Byline: Danielle Knight
WASHINGTON, Feb 21 (IPS) Indonesian pulp and paper facilities,
supported in the 1990s by financial institutions in Europe, Japan and
North America, have caused widespread deforestation and human rights
abuses, according to a new report released here.
Hundreds of thousands of hectares of Indonesia's remaining forests
were clear-cut in order to feed the nations rapid expansion of pulp
and paper production during the last decade, says a report released
this month by Bioforum, an Indonesian environmental group and
Environmental Defense, based in New York.
Export credit lending agencies based in industrialised nations that
backed these production facilities failed to require even minimal
environmental standards, says Stephanie Fried, a scientist at
Environmental Defense that co-authored the report.
Most of the internationally financed pulp and paper mills in
Indonesia have been accompanied by destruction of local peoples'
rights to land and livelihood and the armed suppression of dissent,
she says.
''As a result, massive public protests occurred against the forced
seizures and clear-cutting of community forests, against air
pollution, and against the pollution of major waterways by paper
and pulp mills and factories,'' she says.
The report is part of an international campaign by human rights
and environmental organisations to get government-backed export
credit agencies that are designed to promote investment overseas
to develop social and ecological guidelines for project funding.
Most of these institutions do not have environmental and human
rights standards and therefore end up competing with each other to
fund destructive projects that other institutions that have such
guidelines, will not touch, say activists.
The report describes the environmental impact of several large
Indonesian pulp and paper manufacturing plants, such as one facility
known as the Tanjung Enim Lestari pulp mill, or TEL, located in
the Benakat region of the island of Sumatra.
TEL's sister company, Musi Hutan Persada, was designated to prepare
massive pulp plantations to feed the mill. According to the report,
however, in 1992 Persada began illegally logging, despite protests
by local villagers.
''Inhabitants of Benakat were threatened by local authorities and
security forces who insisted that they give up 1,250 hectares of
their productive rubber gardens, upon which their livelihoods
depended,'' says the report.
Local officials, according to the report that was partially based
on testimony by villagers, threatened protesters with being accused
of ''hindering development'' a charge of subversion that could lead
to a prison sentence.
Despite outcries from the local community, in 1994 a 1.5 billion
dollar finance package was approved for the mill by Canadian,
Finnish, German, Japanese, and Swedish export credit agencies.
Three years later an additional 1.3 billion dollar finance package
was approved for the mill by the same governments.
Last year the authors of the report visited a village located on
a portion of a river near the mill's wastewater disposal site. They
said that adults and children who bathed in the river developed
skin ulcers after TEL had started its operations.
Villagers ''described the forced land seizures carried out by the
company under military guard and the heavy-handed way in which the
security forces had terrorised them when they had dared to voice
their opinions'', says the report.
Another pulp mill in Sumatra, known as Indah Kiat consumes 200
square kilometres of old-growth tropical forest per year because
its accompanying tree plantations are not yet mature, it says.
Over the past 12 years, Indah Kiat has deforested 278,000 hectares,
an area the size of Luxembourg, according to a recent report by
the Centre for International Forestry Research (CIFOR), an
organisation
based in Bogor, Indonesia that is part of the Consultative Group
on International Agriculture Research.
''It is clear that Indonesian pulp and paper producers have assumed
a high degree of financial risk by developing large-scale processing
facilities without first securing a legal and sustainable fibre
supply,'' says Chris Barr, a researcher with CIFOR.
The Bioforum and Environmental Defense Report says the mill has
been ''embroiled'' in conflicts pertaining to the sources of its
timber for pulping and was fined 1.4 million dollars for using
illegal timber.
Indonesia's main environmental coalitions, WALHI, documented the
mill polluting a river downstream, noting dead fish near the
factory's waste outlet and complaints of skin rashes by local
villagers.
The Indah Kiat mill, which is owned by the company Asia Pulp and
Paper, was financed through a 500 million dollar investment package
supported by Canadian, Finnish, Swedish, and Spanish export finance
institutions, according to the report.
German and US agencies also provided million dollar loans and
guarantees to the project under separate financial arrangements.
Export credit agencies ''must begin to correct their shameful record
of environmental and social negligence,'' says Bruce Rich, senior
attorney with Environmental Defense.
He says wealthy countries have failed so far to adopt common
environmental and social guidelines that are at least as rigorous
as existing standards for other publicly-backed lending institutions,
like the World Bank.
''This is financial and environmental folly,'' he says.
ITEM #2
Title: Time And Forest Running Out For The Orangutan
Source: Copyright Environment News Service (ENS) 2001
Date: February 26, 2001
NEW YORK, New York, February 26, 2001 (ENS) - The world's largest
natural orangutan population will be extinct in about a decade unless
poaching and habitat destruction are stopped. That is the finding of
research funded by the Wildlife Conservation Society (WCS), based at
the Bronx Zoo.
The study appears in the current issue of the journal Oryx. It
documents the decline in orangutans - the only great ape found in
Asia - throughout their range.
The situation is worst in the Leuser Ecosystem in northern Sumatra,
Indonesia. Despite being home to Sumatra's largest protected area,
Leuser National Park, logging is rampant.
As a result, the number of orangutans living in the Leuser Ecosystem
has fallen from 12,000 in 1993 - the largest population in the world
- to about 6,000 last year. In 1998 and 1999, losses occurred at
around 1,000 animals per year.
"The alarming decline in Leuser's orangutan numbers implies that the
world's largest natural orangutan population will be extinct in a
decade or so, unless the current trend is stopped," said the study's
lead author, Dr. Carel van Schaik, a WCS research associate from Duke
University. Van Schaik has studied wild orangutans for more than 20
years.
"All remaining forests that are accessible by road or river are
subject to a seemingly unstoppable pandemic of illegal logging,
regardless of their protection status," van Schaik said, adding that
the logging is backed by the Indonesian military and police.
Van Schaik found that in areas that have been selectively logged, the
number of orangutans decreased by more than 60 percent. A decline in
trees that produce fruit - a critical food source for orangutans - as
well as the loss of canopy trees used by orangutans for travel, was
to blame she said.
Selective logging has been followed rampant illegal logging, said van
Schaik. In these areas orangutan population densities dropped by as
much as 90 percent. Many areas have been turned into agricultural
estates, and do not regenerate into forest.
"Unfortunately, selective logging is rarely followed by the 30 to 40
year rest period prescribed by law. Instead, timber removal
continues, illegally now, until just about all of the timber sized
trees of commercially valuable species are gone," said van Schaik.
In Borneo, the only other island where orangutans are found, the
situation is just as bad. Ethnic violence between the indigenous
Dayak population and Madurese settlers is adding to the region's
political instability, which in turn increases pressure on the
island's rainforest.
Illegal logging is widespread in Borneo where a wave of forest fires
in 1997 and 1998 killed off one third of the island's orangutans.
The WCS is calling for a moratorium on logging in old growth forests
until the political situation has stabilized. It wants a renewed
commitment to national parks.
"The documented, long term decline in orangutan numbers is both
depressing and a call to action," said Josh Ginsberg, WCS director
for Asia programs.
"We applaud the U.S. government for its leadership in providing $1.5
million in emergency aid for orangutan conservation in the coming
fiscal year, and for the establishment of a fund, under the Great
Apes Conservation Act of 2000, which will provide financial
assistance in years to come.
"But tough changes in natural resource management, and protection of
remaining habitat, are equally as critical to ensuring a future for
the orangutan," said Ginsberg.
Van Schaik said the orangutans' survival in the wild could provide a
unique window on the kinds of conditions that favored the origins of
human culture.
"Losing the wild orangutan would forever close that window," said van
Schaik. "If we act now, we can still save enough populations from
oblivion, but we cannot afford to waste any time."
The WCS has worked from its Bronx Zoo headquarters in New York since
1895 to save wildlife and wild lands throughout the world. The
organization works in 53 nations across Africa, Asia, Latin America
and North America, protecting wild landscapes that are home to a vast
variety of species from butterlies to tigers.
ITEM #3
Title: Focus on Finance Newsletter - March 2001
Source: AIDEnvironment and Profundo
Date: March 5, 2001
Focus on Finance Newsletter
Volume 1, Issue 1 - March 2001
Introduction
AIDEnvironment and Profundo are happy to announce the release of the
first issue of the Newsletter of the Focus on Finance initiative. In
this newsletter we highlight four case studies where forest issues
and financial institutions meet. The summaries of the first case
studies are presented below. Please visit our website
(http://www.focusonfinance.org) for the full stories and background
information on Focus on Finance.
1. Boise Cascade
Boise Cascade is a large American forestry company, with annual sales
of US$ 7.8 billion in 2000. To fulfil Boise's fibre demand, an area
the size of a small country must be logged, each year. A coalition of
environmental groups in the US clashes with Boise Cascade over old
growth forest logging and human rights violations. The coalition
calls upon Boise Cascade to innovate its forest management
practises and fibre purchasing policies.
Boise Cascade is listed on the New York Stock Exchange, and its
shareholders mainly are American institutional investors. The largest
are: Forstmann-Leff Associates, Dodge & Cox, Prudential Insurance
Company, and Franklin Mutual Advisers.
A significant part of Boise Cascade's activities is financed by bank
loans, especially by two large syndicated loans arranged by Bank of
America National Trust and Savings Association, Chase Manhattan Bank,
National Westminster Bank and Morgan Guaranty Trust.
Read the full story at:
http://www.focusonfinance.org/Boisecascade.htm
2. Oil and gas industry in Russia
"Thirty years of intensive energy resource exploitation has caused
great damage to the nature of the Russian Federation, especially to
the northern parts", a World Bank study concluded last June.
The environmental devastation has a great impact on the lives of the
local inhabitants of the Siberian tundra and boreal forests.
Since the demise of the Soviet empire, many Russian as well as
Western oil companies have increased their efforts to exploit the
Siberian natural resources. And foreign banks - like Dresdner Bank,
Cr�dit Lyonnais, Chase Manhattan and Commerzbank - have been co-
financing these investments on a massive scale, especially between
the re-election of Boris Jeltsin in June 1996 and the onset of the
Russian financial crisis of August 1998. Led by the activities of
some public institutions - the US Export-Import Bank and the EBRD - a
new wave of private bank loans seems to have started at the end of
last year. Some of the banks involved are HypoVereinbank, Cr�dit
Agricole Indosuez, WestLB, ING Barings and Soci�t� G�n�rale.
While the West has now gained access to Russia's oil and gas
reserves, the Siberian environment and its inhabitants are still in
the same deplorable state as they were under the Soviet regime.
Read the full story at: http://www.focusonfinance.org/Siberia.htm
3. Citigroup
NGOs are all too familiar with the controversial Three Gorges Dam in
China, redwood logging in California's Headwaters Forest and the
Chad/Cameroon oil pipeline. Citigroup, America's biggest private
banking group is involved in all these megaprojects. Citigroup
"believes that working to conserve and enhance the environment is a
good business practise". Rainforest Action Network (RAN) argues that
Citigroup's believes are not put into practise and launched a massive
campaign against Citigroup. Because Citigroup's activities not only
affect forest ecosystems, a broad alliance of concerned
environmentalists, human rights activists and economic justice
advocates from all over the world is building up. As a first step,
the activists want Citigroup to impose social and environmental
criteria integrated throughout all aspects of their financing,
lending and trading businesses.
Read the complete story at:
http://www.focusonfinance.org/Citigroup.htm
4. Dutch banks and Indonesian palmoil
Indonesia plans to become the leading palm oil producer in the world.
A total area of at least 9 million hectares of forestland is
therefore slated for conversion into plantation monocultures. Between
1995 and mid-1999, hundreds of domestic and foreign plantation
companies invested over US$ 20 billion to develop their oil palm
estates. European, American and Asian banks provided the bulk of the
capital required to enable the plantation industry to expand their
estates. Among them were all major Dutch commercial banks: ABN-Amro,
Rabobank, ING Bank, MeesPierson (Fortis). The expanding oil palm
industry brought about extensive deforestation, widespread social
conflict, illegal land clearing, economic vulnerability and
destructive forest fires.
The Indonesian economic crisis has temporarily slowed the rate of
conversion, but the plantation companies will again approach foreign
creditors to enable them to continue expansion. NGOs in Indonesia and
the Netherlands are concerned that this will aggravate the
environmental destruction and social unrest. They call upon the Dutch
banks to apply strict policies and criteria for their financial
services.
Read the complete story at:
http://www.focusonfinance.org/Dutchbanks.htm
Focus on Finance Newsletter
March 2001
Research and editing:
Jan Willem van Gelder (Profundo): [EMAIL PROTECTED]
Eric Wakker (AIDEnvironment): [EMAIL PROTECTED]
Please let us know if you want to receive this newsletter. The first
issues of the Focus on Finance Newsletter are realised with a grant
from the Ministry of Housing, Spatial Planning and Environment (VROM)
in the Netherlands. The contents of the newsletter do not necessarily
represent the position of the Ministry.
###RELAYED TEXT ENDS###
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