14 DAY TRIAL // Towards the end of this year's May, HSBC (the Hongkong and Shanghai Banking Corporation) announced that it was to rethink its business agenda and quit lending money to companies known to cause damage to the environment. Apparently, all this rethinking is taking way more time than environmentalists expected and wanted it to.
A new report made public by the Environmental Investigation Agency, a London-based green group, says that, green-oriented policies aside, the bank is still lending money to companies Bumitama Agri and Triputra Agro Persada.
According to EIA, Bumitama Agri has received some $420 million (€313.83 million) since 2010. Triputra Agro Persada, on the other hand, was given $470 million (€351.19) in July 2013.
Both these companies are in the business of setting up and operating palm oil plantations, and both have been linked to deforestation in Borneo, Mongabay reports.
More precisely, EIA maintains that Bumitama Agri is guilty of chopping down about 3,200 hectares (8,000 acres) of forest in West Kalimantan.
The region is known to be inhabited by orangutans, many of which had to be rescued by local conservation groups after their homes were destroyed by palm oil plantation workers.
The group also says that, at the time when Triputra Agro Persada received its latest loan from HSBC, the company was getting ready to clear large patches of land and turn them into palm oil plantations.
As far as EIA is concerned, the bank is first and foremost guilty of agreeing to lend money to palm oil companies without checking to see whether or not these companies abide by rules and regulations set in place by the Roundtable on Sustainable Palm Oil (RSPO).
“HSBC is financing members of the RSPO on the assumption that they will abide by its forest policy but without any prior scrutiny or ability to determine whether they have,” the environmentalists write in their report.
“Because neither Bumitama nor Triputra were compliant with HSBC’s forest policy, project finance should only have been extended to them on the condition that they were ‘on a credible path’ to certification. Beyond their membership of the RSPO, however, there remains no evidence that either company was on such a path,” they add.
In light of these findings, EIA urges that HSBC ask that said two palm oil companies halt all activities and no longer clear forested areas until assessments prove that the regions they plan to turn into plantations do not have a high conservation value.
The group also demands that HSBC make sure that the two companies comply with RSPO rules and regulations, and take similar measures for all its other customers.