Norway urged to dump shares of other forest-destroying companies
Norway's Climate and Forests Initiative, which has set aside billions of dollars for efforts to reduce deforestation, should work with the country's Ministry of Finance to divest the Government Pension Fund from companies that destroy forests, says the Environmental Investigation Agency (EIA), an environmental group.
EIA is making a push on the issue just four days after the pension fund announced it had sold all of its shares in Malaysian logging conglomerate Samling Global after an investigation found evidence of illegal logging in Sarawak, a Malaysian state of the island of Borneo. While the sale represented less than 1 percent of Samling's outstanding shares, the action sent a strong signal.
Now EIA is calling upon the Ministry of Finance to evaluate another $437 million in shareholdings in major forestry, agriculture, and related commodities companies that operate in Indonesia, Papua New Guinea, and Malaysia.
"Many have been linked to deforestation and other severe environmental damage," read a statement from EIA. "Some have been accused of illegal logging and land clearance, rights and labor abuses, corruption, and significant tax fraud. All such activities would contravene the Ethical Guidelines of the Pension Fund if confirmed."
Among the questionable holdings cited by EIA:
- $39 million worth of shares in Hong Kong-based Noble Group, which recently purchased a largely forested 32,000 hectare oil palm plantation license in Sorong, West Papua. When EIA visited the plantation in April 2009 investigators met a four-year-old child who had been forced to sign a multi-decade land release contract. Landowners reported receiving equivalent to $2.50 per hectare, and complained that promised benefits had not materialized. Forest clearance is ongoing.
- $1.2 million of shares in LG International Corp, and further shares in Medco Energi International, which together control 170,000 hectares and seek a total of one million hectares of forest in Papua for pulp and wood chip production. The land is part of a controversial food and “green energy” estate project in Merauke where 1.6 million hectares is targeted, but local and international opposition is becoming widespread.
- $17.8 million of shares in the controversial Singapore-listed Golden Agri Resources, which controls Indonesia's oil palm and pulp plantation giant, Sinar Mas Group. A recent independent assessment of Sinar Mas' operations concluded that in one Indonesian province "all concessions examined were found to have carried out land clearance before the EIA [environmental impact assessment] was approved." Sinar Mas is also clearing forests Lereh, Papua.
Norway's Climate and Forests Initiative is the largest single source of funds for efforts to reduce tropical deforestation. In May, Norway pledged $1 billion toward forest conservation in Indonesia, which followed an earlier $1B commitment to Brazil and hundreds of millions in funds for Guyana, Tanzania, and Congo Basin countries.
"Norway and other nations are undermining their good intentions by paying countries like Indonesia to protect their forests, with one hand, and investing in deforestation without environmental or social safeguards with the other," Andrea Johnson of EIA said in a statement.