Despite ongoing rainforest clearance, APRIL and its affiliate companies in the Royal Golden Eagle group do not seem to have any problems in finding money to support their activities.
UPDATE: On 26th February, Santander announced that it would stop financing APRIL until the company implemented “new sustainability measures which address its involvement with deforestation”.
UPDATE 2: On 6th March, ABN Amro made a similar announcement.
Greenpeace last week launched a major campaign against Santander for its role in financing APRIL (Asia Pacific Resources International Limited), the Indonesian pulp and paper producer described by Greenpeace as “Indonesia’s biggest forest destroyer”. Santander has been singled out for good reasons, but it is not alone in financing the company.
Between December 2011 and April 2014, APRIL and its affiliate companies secured at least $1.87 billion in financial support through three syndicated loan deals, which involved 22 known banks.
In January 2014 APRIL, Indonesia’s second largest pulp and paper company released its new “Sustainable Forest Management Policy”, in which it committed, among other things, to immediately stop sourcing from high conservation value forests. It also declared a moratorium on logging in concession areas throughout APRIL’s fibre supply chain where High Conservation Value (HCV) assessments have not been completed.
But APRIL has continued to break its own already weak sustainability promises. There is ample evidence from Greenpeace, Indonesian coalition Eyes on the Forest and elsewhere that the company has continued to clear high conservation value and protected forests in violation of its commitments. Indeed a KPMG audit at the end of 2014 found that none of its plantations were compliant with its own policies. In addition, the company has a long history of social conflicts, which we have detailed in a discussion with the company.
APRIL’s deforestation record led the company to lose its interim FSC certification back in 2010. It has also lost important clients like Fuji-Xerox and in January 2014 had its membership of the World Business Council for Sustainable Development put on probation. Yet despite these widely recognized problems, banks seem disinclined to break ties with the company.
Last year, Banktrack and the Environmental Paper Network (EPN) wrote to nine banks known to have recently financed APRIL. Among these were six Chinese banks, which are the company’s biggest funders. They are expected to respect the China Banking Regulatory Commission’s Green Credit Guidelines, following which they should “effectively fend off environmental and social risks”. Unfortunately, the guidelines do not yet seem that effective, and Chinese Banks remain unwilling to discuss their implementation. No responses have yet been received.
The three European Banks – Santander, ABN Amro and Credit Suisse – did respond, although Credit Suisse did nothing more than point out that it has a publicly available policy on forestry issues. ABN Amro, which also has a forestry policy, was more responsive and is willing to discuss the issue but has so far not decided to divest. Both banks need to improve their due diligence process to make sure that their clients are compliant with their policies.
Santander, however, claims to have a forest policy but keeps it secret. In calls between the bank and NGOs including Greenpeace, BankTrack and EPN, they did not commit to any changes. The company has shown it has the furthest to go among all the European banks to improve its approach to this sector. However, all banks financing APRIL are contributing to the destruction of Indonesia’s rainforests, and we will continue campaigning them to drop the company from their loan books until it has made real and lasting changes.