HSBC forest policy has loopholes you could drive a bulldozer through

Posted by jamie — 19 May 2010 at 12:04pm - Comments

Given we've turned our sights away from Nestle towards HSBC, a few more details might be in order about why we've gone from chocolatey giant to banking colossus as the next stage in our campaign to stop Indonesia's rainforests being replaced with palm oil and paper plantations. It's a lateral step but then our intent has always been to tackle the palm oil industry at every level, from production to consumption and all points in between.

As the lady once sang, money talks. It's sad but true, and very little happens in our civilisation without a liberal lubrication of cold, hard cash. Companies like Sinar Mas make their profits by selling raw materials to consumer companies like (until recently) Nestle, but to dig their claws even deeper into the natural resources of Indonesia they also need investment. This comes from a variety of sources, including funds operated by HSBC.

Now, HSBC has a whole policy-setting criteria which projects dealing with forest lands and products should meet. Sinar Mas doesn't come anywhere near meeting these criteria, and HSBC has a history of investing in other companies with appalling track records. So does this mean HSBC is ignoring its own policy?

To our collective astonishment, the most recent communications we've had with HSBC reveal that, to the contrary, HSBC has been operating within its own guidelines and the forest policy doesn't apply to Sinar Mas. Why? Because apparently it only applies to certain bits of HSBC's operations, ie the bits which don't involve buying shares in forest annihilating machines like Sinar Mas.

It's a wonderful piece of double-speak spin (or to use the technical term, utter bollocks) which allows HSBC to present a caring, ethical face to the world while simultaneously banking on devastated forests, loss of biodiversity and accelerated climate change. The effects are pretty much like saying you'll give up smoking but only while you're asleep.

So while we thought HSBC was perhaps forgetting it had a forest policy, it seems that loopholes enable  it to continue in parts of their operations with business pretty much as usual. If you think that's bizarre and ludicrous, you can email the CEO Michael Geoghegan and put your thoughts to him.

In the meantime, let's see which parts of HSBC's forest policy Sinar Mas breeches. Of course, it's just a bit of fun because of course the policy doesn't apply to companies like Sinar Mas. Silly to think otherwise, really.

"HSBC will not provide financial services which directly support... operations in wetlands on the Ramsar List
Just a few weeks ago, we published research which shows that as recently as March, Sinar Mas has been digging drainage canals in areas around the Danau Sentarum national park in West Kalimantan, Borneo which is recognised by the intergovernmental Ramsar Convention on Wetlands. Sinar Mas wants to drain the peatland so it can be cleared for agriculture which, given the carbon emissions associated with this, is bad enough in itself. But the drainage will also affect the protected wetlands and the communities that depend on them.

"HSBC will not finance plantations converted from natural forest since June 2004..."
Again, we know that Sinar Mas has been doing exactly that, and the same report mentioned above details how natural peatland and dryland forests are being cleared for plantations in West Kalimantan.

"Logging and harvesting activities must respect permits; quotas; concession areas; local laws on taxation and corruption; protected species; the legal rights of communities and areas defined as High Conservation Value Forest"
Dear oh dear. There's plenty of documentation to show Sinar Mas is not one to respect permits, quotas or laws: it's been destroying orang-utan habitats, threatened the livelihoods of local communities, and has repeatedly broken Indonesian laws.

"We recognise that commercial activity on peatlands can have negative local impacts on biodiversity and communities, as well as wider impacts on climate change due to the significant levels of carbon dioxide captured in pear. We therefore take a cautious approach to business proposals in this sub-sector"
I think not. Last year, Unilever conducted an audit of Sinar Mas's activities which showed that the company has cleared peatlands and established plantations there. Unilever then dropped Sinar Mas as a supplier. Plus, Fauna and Flora International conducted their own assessment of a Sinar Mas-owned concession in Kalimantan which revealed that it contained peat deeper than three metres (it's illegal to disturb peat deeper than three metres) and that clearance was already happening. It's all in the dossier we released last December.

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