French lenders finance companies linked to deforestation: analysis
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French banks have provided nearly two billion euros in financial support to agribusiness groups involved in deforestation despite a law prohibiting companies from financing environmental damage, according to a new analysis seen by AFP.
Three years after France passed landmark legislation requiring companies to identify and prevent human rights violations and nature degradation throughout their supply chain, analysis showed how large lenders fund nevertheless projects linked to deforestation in the Brazilian Amazon, the Congo Basin and Papua New Guinea.
The survey conducted by the watchdog Global Witness concluded that BNP Paribas, Natixis and Crédit Agricole “have all put in place policies or commitments on agricultural commodities that risk causing deforestation”.
AFP has contacted the three banks for comment.
“The rapid deterioration of our climate is of concern to many, including bank customers,” said Laurence Duprat, Global Witness campaign advisor who wrote the analysis.
“It is therefore not surprising that banks and investors proudly tout ethical investment and lending policies. But there is a glaring contradiction,” she said.
“The same French financial institutions are bending their own policies at will. Many of their virtuous promises are barely worth the paper they are printed on.”
Deforestation in the Brazilian Amazon soared 85% in 2019, according to official data released by a Brazilian government institute last month.
Rainforests soak up huge amounts of the global warming carbon dioxide and are vital biodiversity sanctuaries, but every year an area the size of England and Wales is cut down.
According to Global Witness, Natixis last year contributed $ 50 million (€ 45 million) to a credit facility for Olam International, one of the world’s largest agribusiness groups.
A 2016 report by the environmental campaign group Mighty Earth concluded that Olam had cleared 20,000 hectares of forest in Gabon to make way for oil palm plantations.
A spokesperson for Olam said: “We strongly refute any allegations of irresponsible deforestation or land conversion.
He told AFP that Olam is working closely with the government of Gabon “to carefully balance Gabon’s development needs with the imperative to conserve the country’s unique forests”.
– ‘Principal banker’ –
According to Global Witness, Crédit Agricole is listed as a “senior banker” in the 2018 annual report of Halcyon Agri, a Singapore-based company also involved in deforestation.
A 2018 Greenpeace report said the group took control in 2016 of rubber plantations in Cameroon that had a history of deforestation, and cut an additional 2,300 hectares over the next two years.
In 2017, Crédit Agricole acted as lead manager of a $ 300 million bond for Halcyon’s majority shareholder, Sinochem, according to the Thomson Eikon database.
In July of the same year, the bank provided $ 10 million in underwriting services to Sinochem, Global Witness said.
Halcyon and Sinochem did not respond to requests for comment.
– Certification process –
Despite signing a commitment in 2015 to align its investments to create “net zero deforestation”, BNP Paribas in 2019 was still one of many banks operating a $ 500 million bond for Brazilian beef trader Marfrig, according to the analysis.
The bond supports Marfrig’s cattle buying chain of indirect suppliers, which sees the agribusiness giant buying cattle that have not been raised on a single property, making it difficult to trace.
Daniel Brindis, director of forests at Greenpeace US, said that Marfrig “does not have the constant assurance that farms that sell to their direct suppliers are free from deforestation”.
A consulting firm reviewing the bond said it could only give “moderate” assurance that it was not contributing to forest loss, the analysis found.
Marfrig did not respond to AFP’s request for comment.
BNP Paribas was a major underwriter of a billion dollar bond issued in May 2019 to Marfrig subsidiary NBM US Holdings, according to the Thomson Eikon financial database.
He also managed bonds worth $ 1 million in Sinochem International, according to Global Witness analysis.
The bank told Global Witness that all of its customers in the Amazon “are either already certified or undergoing a certification process” to ensure responsible practices.
© 2020 AFP