Four banks backed destructive logging

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Four banks backed destructive logging

01 December 2021

Westpac, ANZ, Bank South Pacific and Kina Bank have questions to answer about their ties with illegal logging practices in PNG

KEITH JACKSON

NOOSA – Banks operating in Papua New Guinea - including Westpac and ANZ - have provided the country’s five largest exporters of logs with at least K300 million in credit over the last 20 years.

But gaps in company reporting and murky funding processes mean the true amount could be three times as high, reaching close to a billion kina.

This has been revealed in a report released today by advocacy organisations Act Now and Jubilee Australia.

Even as the money flowed from banks to loggers, there were multiple government reviews, court judgments and reports exposing illegal practices in PNG’s logging sector.

The report finds that PNG’s Bank South Pacific (BSP) and Kina Bank, and Australia’s Westpac and ANZ have all provided financing to one or more of the top five logging companies.

Westpac and ANZ said they have ended their financial relationship with logging companies that lack appropriate certification, but BSP and Kina Bank failed to provide the same assurances, although BSP is believed to have made policy steps in this direction.

Despite this, however, BSP appears to be currently providing K64.8 million in credit to subsidiaries of logging giant Rimbunan Hijau.

Two subsidiaries, Wawoi Guavi Timber Co Ltd and Gilford Ltd, have been implicated in environmental destruction and named in reports of police violence against landowners.

Satellite images have also shown Wawoi Guavi logging in areas where it is not legally allowed to harvest.

Kina Bank said it has no current financing relationship with Rimbunan Hijau but did not give a clear answer on whether it is financing other logging companies or will do so in future.

In 2017, the country’s central bank, Bank of Papua New Guinea, stated in a risk assessment that illegal logging posed a significant money laundering threat.

The central bank stated:

“There are strong indicators of large-scale corruption and illegal logging in the forestry sector in PNG, which result in high levels of proceeds of crime [and] it is widely accepted that the problem is widespread and the lost revenue is extensive.”

Act Now campaign manager Eddie Tanago said:

“For decades there has been overwhelming evidence of widespread illegalities in the logging sector in PNG.

“It is completely unacceptable that high street banks should be facilitating and profiting from the destruction of vital tropical forest resources.

“We are calling on all the commercial banks operating in PNG to end all banking services to companies involved in large-scale tropical forest logging.

“In addition, they must publish information on current banking relationships with the sector.

“They should also commit to providing redress to communities affected by logging operations where the banks have been directly or indirectly linked to human rights abuses.”

Jubilee Australia policy director Fyfe Strachan said:

“Any bank that chooses to finance PNG’s tropical forest logging risks being complicit in illegal activity associated with that sector.

“Investors in BSP and Kina Bank, including their Australian shareholders, should be asking some tough questions right now about where their money is going, and what risks they might be exposed to.”

The Act Now/Jubilee report calls on the Bank of PNG to allow its Financial Analysis and Supervision Unit to investigate potential money laundering and other illegal activity associated with PNG’s commercial banks and the logging sector.

The report also wants to see appropriate enforcement action taken wherever breaches are identified.

Link here to download the full research report, ‘The Money behind the Chainsaws’

Posted in Business, resources & economy, Environment, health & human rights, Research | Permalink | Comments (4)

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Here is a link to an interesting article entitled "Critical Exposés Everywhere as the Corporate State Worsens" by Ralph Nader on Counterpunch:

https://www.counterpunch.org/2021/12/06/critical-exposes-everywhere-as-the-corporate-state-worsens/

All the usual suspects get a mention.

Posted by: Bernard Corden | 07 December 2021 at 03:42 PM

Good on yer, Wally, going downstream processing of logs.
On second thought, "not on yer nelly", ought any round log be exported.
National treasure each log a triumph of flora, to the pipl of PNG all a godly gift.
As swiftly as a pandemic invaded, businesses wanting round logs can learn to adapt.
See: https://www.looppng.com/png-news/mp-focuses-downstream-processing-107385
Gradualism is only as a sop to those souls siphoning sideline sustenance from the trade.

Posted by: Lindsay F Bond | 03 December 2021 at 06:58 PM

It's not just banks, it's insurers and, as Judge Tos Barnett said a long time ago: “Without educated elites in PNG the corruption in PNG's forest industry couldn't happen.”

Kavieng Open was the only electorate to see its MP dismissed for being found to have acted corruptly as a result of that forest inquiry; generally ignored for over two decades by the caterpillars of the forests.

Other spivs were able to avoid the chop and some have continued to this day. I feel friendly ministers and MPs of all ilk have kept companies safe from the courts.

I note how the avowed cry, "End export of round logs!", despite all the evidence of corruption, keeps having the cut off date moved further into the future.

You may have noted too that the cancellations promised for the vastly illegal SABL excuse used for clear-felling all over PNG has been missing from this 'Take back PNG' government.

So the chainsaws screech and the jinkers roll while undersized logs and even protected species (illegal under normal forestry law) are loaded onto overseas ships ripe for transfer pricing scams before reaching their destination.

Everyone in government and the timber trade knows about this practice but no minister or MP seems to have guts to investigate and stop it.

The wheels of justice roll slowly or even fall off. Here is a corrupt case going back 10 years.

It was alleged that in October 2011, the Finance Department allocated K6 million to South Fly under the supplementary budget for construction of health workers’ houses in the district.

That money was allegedly misappropriated.

It is not clear if there is any connection whatsoever to the timber industry but at this moment Kiriwina-Goodenough MP Douglas Tomuriesa, an ex-Forest Minister along with his New Ireland wife and others, face similar charges of misappropriation and applying to their own use some of K6 million between 1 July 2012 and 30 January 2013.

The case was first registered in 2014, but was recently been brought to court again after the cases had been struck out in 2019 because police had failed to present their file to the court within the allowed time.

The married couple were again arrested on 8 February 2020 after police finally managed to complete their case.

Election fever has arrived and several high profile alleged criminals of all sorts are doing everything they can to reach that target date.

Hoping for a change of government or possibly to enhance their pension, golden farewells etc. and or avoid justice if they are MPs or putative ones.

Posted by: Arthur Williams | 02 December 2021 at 12:05 AM

If you get the drift, this is with apology only to:
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'Slogs of Asia'

Of some parts Asia I was born
Heave away haul away
For banks of Asia to adorn
Bound for banks of Asia