VICTORY!

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FOREST CONSERVATION NEWS TODAY

Dutch Banks Commit to Rainforest Conservation

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Forest Networking a Project of Forests.org, Inc.

http://forests.org/ -- Forest Conservation Portal

http://forests.org/links/ -- Forest Conservation Links

11/07/01

OVERVIEW & COMMENTARY by Forests.org

Three of the top Dutch banks have decided to stop or substantially

restrict the financing of oil palm plantations where tropical

rainforests have recently been cleared for their planting.

Rainforest destruction from oil palm monocultures has been

particularly problematic in Indonesia, but is a growing threat to

many rainforests elsewhere as well. This is a landmark break-through

in NGO efforts to engage business in forest conservation. ABN Amro

Bank developed the most far-reaching policy that limits logging, pulp

and paper, mining and oil & gas development in either primary or High

Conservation Value forests. They have rightly concluded that

companies that engage in poor environmental management will suffer

financially.

The era of financial institutions enabling the destruction of nature

with impunity is drawing to a close. It is critical that all

remaining forest wildernesses (call them what you may; primary

forests, ancient old-growth, High Conservation Value forests, large

areas of big honking old trees) are strictly protected and allowed to

expand. The only management activities that should be allowed are

small-scale community based certified forestry, eco-tourism and other

benign and non-ecologically diminishing uses. These management

activities must be placed within a landscape matrix of large strictly

protected areas if landscape level sustainability is to be achieved.

Commercial forestry, Forest Stewardship Council certified or not, is

not consistent with maintenance of values associated with High

Conservation Value forests and is ecologically unsustainable.

g.b.

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RELAYED TEXT STARTS HERE:

Title: Dutch Banks Commit to Forest Conservation

Source: Focus on Finance News

Special issue, November 2001

Date: November 7, 2001

Three of the Dutch top-four banks - ABN AMRO Bank, Rabobank and

Fortis Bank - have decided to stop or substantially restrict the

financing of the development of oil palm plantations for which

purposely tropical rainforest is destroyed. This is the result of a

joint campaign by Sawit Watch Indonesia, Milieudefensie (Friends of

the Earth Netherlands) and Greenpeace Netherlands.

The 1997/98, 10 million hectares of forestland were burned in

Indonesia. The haze that covered the continent for several months

affected the health of some 70 million people in Southeast Asia.

Rather than calling for greater fire fighting capacity in Indonesia,

environmental NGOs sought a fundamental solution to combat the fires.

The NGOs went after the financial backers of the oil palm plantation

industry in Indonesia, the sector that was widely held accountable

for causing the forest fires.

All major Dutch banks have financial ties with several of the main

plantation company groups in Indonesia and these banks are frequently

in a solid position to influence the environmental policies of their

clients. In a series of meetings and actions that started last

January, Greenpeace Netherlands and Friends of the Earth Netherlands

demanded that the banks adopt sustainability criteria for investments

in the oil palm sector.

Last October 31, ABN-Amro Bank, Rabobank and Fortis Bank declared

that they subscribe to the investment criteria as put forward by the

NGOs. Oil palm plantation companies submitting investment proposals

to these banks should:

1. Not be involved in burning forestland

2. Not be clearing tropical rainforest

3. Respect the rights and wishes of local communities

4. Respect Indonesia's law and relevant international conventions.

The decision of the banks is a landmark break-through in NGO efforts

to engage business in forest conservation and management. It is

comparable to the decision of the major Do-It-Yourself chains such as

B&Q (UK), Intergamma (Netherlands) and Home Depot (USA) to phase out

the sales of non-certified lumber. The decision of the banks is also

timely, as many experts believe that the drought of El Ni¤o and

subsequent forest fires will hit Indonesia again in 2002.

Sawit Watch, the Indonesian NGO-network that is campaigning against

large-scale expansion of oil palm plantations, called upon all banks

in the world, including Indonesian banks, to follow the steps taken

by the Dutch banks. Sawit Watch' policy researcher Joko Waluyo

stated: "the investment criteria not only guarantee the safety of

bank credits, even more important is the conservation of Indonesia's

forests."

The campaign is already beginning to spread to other European

countries, where environmental and conservation groups approach

investors and importers to justify their involvement in plantation

companies. Indonesia's pulp and paper companies such as Asia Pulp &

Paper (APP) and Riau Andalan Pulp and Paper (PT RAPP) are already

high on the agendas of NGOs in Switzerland and the United Kingdom.

Of the Dutch banks that have committed to new investment policies,

ABN Amro Bank developed the most far-reaching policy. Its policy

applies to all sectors that might affect forests, including logging,

pulp and paper, mining and oil & gas development. Mr. Herman Mulder,

head of ABN Amro's Risk Management division believes that the new

credit practise will be widely adopted quickly. "Companies that

manage their environment poorly will suffer financially. Clients and

shareholders walk away, employees will seek another boss" he was

quoted as saying in the Volkskrant.

ABN Amro will "no longer finance projects or operations, which will

result in resource extraction from, or the clearing of, either

primary or High Conservation Value forests". The bank will consider

exceptions only "where extraction is part of a carefully planned,

responsible national forest management program or where the company

is FSC certified for operations in that forest."

To avoid that plantation companies clear forests first and then apply

for credits, ABN Amro Bank will not invest in plantation projects in

forestlands that have been cleared less than 5 years ago. Rabobank

maintains a 3-year limit.

One of Rabobank's key criteria is that "no financial assistance is

given for the development or operation of oil palm plantations if the

related party is directly or indirectly (within the context of a

larger group) involved in illegal logging and/or commercial logging

of primary or High Conservation Value forests in the area designated

for the plantation". Rabobank will "not work with clients who do not

meet its investment criteria. If a client violates the criteria, the

bank will discuss the situation and if improvements are not made, the

relationship will be reviewed ('review' = possibly terminate)."

The NGOs have not yet come to an agreement with ING Bank. This bank

is not prepared to go beyond local government regulations. In the

Belgian newspaper De Morgen an ING representative was quoted today as

saying: "Illegal logging is not possible, but if forest clearing is

government approved, we are still prepared to finance."

For further information see:

http://www.focusonfinance.org/Dutchbanks2.htm

Focus on Finance Newsletter

November 2001

Research and editing:

Jan Willem van Gelder (Profundo): janwillem@profundo.nl

Eric Wakker (AIDEnvironment): wakker@aidenvironment.org

###RELAYED TEXT ENDS###

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