Westpac loans linked to destructive island logging


Rory Callinan

For years the Solomon Islands has been the scene of vastly unsustainable logging practices, now experts are predicting the demise of the country’s natural timber industry possibly as early as 2015.

THE Australian bank that promotes itself as being among the world’s greenest, most ethical and sustainably aware is financing some of the Pacific’s most unsustainable and destructive logging operations, an investigation has found.

Westpac, which has awards and memberships to associations relating to ethical business practices and environmentally responsible investing, has provided loans to companies in the Solomon Islands linked to illegal tree felling threatening rare cloud forest, suspected hiring of illegal workers, trespass and causing environmental and social problems.

The operations are part of a logging industry considered so unsustainable that the Solomon Islands Finance Ministry has warned of its exhaustion by 2015. The nation has the highest percentage loss of forest in the Pacific, according to a United Nations emission reduction program, and the World Bank notes that in one month in 2010, 50,000 logs were exported.

Researchers have also linked the industry to community conflict and the exploitation of women and children while Australian advisers say officials lack the resources to police loggers.

Westpac has confirmed 9 per cent of its loans in the islands relate to the logging industry with a spokesman saying the loans had been reduced from 35 per cent in 2009 as part of a ”strategy to reduce exposure”.

The Saturday Age had found direct loans and long business relationships between at least five of the country’s major logging interests and the bank. In one case, a manager for loggers, Success Company Limited, confirmed it had received a Westpac loan as recently as this year. Success manager John Parsad said the loan was represented to the bank as being for earth moving but would be used for logging as the earth moving machines cut logging roads through the forest.

The same company, which is part-owned by former Solomons forestry minister Bodo Dettke, was issued an injunction in 2010 to stop logging on Kolombangara Island after it was alleged to be trying to log above 400 metres, threatening rare cloud forest without appropriate approvals. It is fighting the injunction.

Another prominent logging business owner, Hii Yii Ging, has confirmed one of his Solomon Island logging-related businesses has a Westpac loan.

The bank declined to comment on specific loans for privacy and confidentiality reasons but a spokesman said logging contributed to a considerable portion of the Solomon Islands’ economy and ”while our strategy has been to reduce our exposure, we remain committed to the country, our customers and staff”.

Read more: http://www.smh.com.au/national/westpac-loans-linked-to-destructive-island-logging-20120727-22zuv.html#ixzz21sPdM4nZ

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