Indonesia: HSBC accused of supporting environmental destruction by financing companies linked to unsustainable palm oil; HSBC responds


This report highlights the alleged role of HSBC in deforestation in Indonesia due to its financial relationships with six palm oil companies, described in the report as “some of the most damaging companies in the sector.”

HSBC’s statement is linked below. Business & Human Rights Resource Centre sought responses from three companies that did not respond to Greenpeace's request for comment, based on the published text. Indofood Agri Resources’ response is linked below. IOI Group and Posco have not responded.

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20 February 2017

HSBC tightens standards on lending to the palm oil industry following Greenpeace report on its links to environmental destruction in Indonesia

Author: Emiko Terazono and Martin Arnold, Financial Times

“HSBC tightens standards on lending to palm oil industry”, 20 Feb 2017

HSBC has tightened its standards on lending to the palm oil industry, pledging that it would cut ties with companies linked to the destruction of rainforests in key production areas.

The new standard, which aligns the UK-based bank with the “no deforestation, no peat, no exploitation” policy adopted by leading palm oil growers, traders and buyers, follows a recent report by Greenpeace which highlighted HSBC’s links with palm oil companies alleged to have been behind deforestation.

In its announcement, which comes a day before the bank releases its annual results...HSBC offered certain deadlines for its clients to make stronger commitments to protect natural forests and peatlands. The bank said it would not “finance unacceptable impacts in this potentially high-risk sector”, adding that it wanted to “ensure that our customers operate in accordance to good international practice” and said it would close relationships with companies which did not meet its standards…

Greenpeace said the bank’s new policy was “a good first step”.

It added: “This also sends a clear signal that other global banks must follow suit.”…

Read the full post here

14 February 2017

Dirty Bankers: How HSBC is Financing Forest Destruction for Palm Oil

Author: Greenpeace International

17 Jan 2017

HSBC, headquartered in the UK, is currently one of the largest providers of financial services to the palm oil industry. HSBC has detailed policies on forestry and agricultural commodities (including specific sections on palm oil). It claims these policies 'prohibit the finance of deforestation', but a new Greenpeace report shows many of the companies it funds are destroying forests.

Since 2012, HSBC has been involved in arranging loans and other credit facilities totalling US$16.3bn for the six companies profiled in Greenpeace's Dirty Bankers report, as well as nearly US$2bn in corporate bonds. In some cases, details of contributions made by each lender (including HSBC) are accessible, but for many deals this information is not available.

As these case studies show, not only are HSBC's policies inadequate, but it is providing services to companies that breach them. Its links to some of the most damaging companies in the sector leave HSBC exposed to serious reputational risk, in addition to the financial risks associated with the palm oil industry…

Read the full post here

13 February 2017

HSBC statement on Indonesian deforestation

Author: HSBC

17 Jan 2017

…HSBC has no interest in financing customers involved in: illegal operations; land clearance by burning; the conversion of high conservation value areas; harmful or exploitative child labour or forced labour; the violation of the rights of local communities, such as the principle of free prior and informed consent; and operations where there is significant social conflict…

…We are not aware of any current instances where customers are alleged to be operating outside our policy and where we have not taken, or are not taking, appropriate action

…We are not complacent and continue to monitor these sectors closely, and will publish more information later this year. We do not consider closing a relationship a success, as we lose influence to promote higher standards, although we have no doubt that our policies benefit from having a bar, below which relationships will be ended…

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Company response
3 February 2017

Indofood Agri Resources response

Author: Indofood Agri Resources

…We have engaged several times with the NGO's who have made the allegations, but they have not provided us with any evidence to substantiate these allegations. We have provided evidence to counter these allegations to RSPO, which can be viewed as follows:

… Based on the November 2016 RSPO audit report, we had a positive result and we are in compliance with RSPO Principles and Criteria for sustainability…

Attachment 1: Reply to Rainforest Action Network, 28 June 2016

Attachment 2: Reply to Rainforest Action Network, 2 August 2016


Download the full document here

17 January 2017

Greenpeace slams HSBC for funding destructive Indonesian palm oil firms

Author: Kanupriya Kapoor, Reuters

Environmental group Greenpeace International...slammed HSBC Holdings Plc for allegedly funding palm oil companies in Indonesia that it says have destroyed tropical rainforests.

HSBC and other banks lent to palm oil companies that are "responsible for unacceptable activities", Greenpeace said in a report, highlighting loans worth hundreds of millions of dollars given out by the London-based bank since 2012 to six companies allegedly responsible for deforestation in Indonesia.

The report, which also alleges violations of labor laws and operating licenses, follows a trend of increasing pressure being brought to bear by green groups on corporations in Europe to clean up their supply chains in countries such as Indonesia and Malaysia…

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