ITEM #1

Title:  Developed Countries Helped Deforest Indonesia, Report

  Claims 

Source:  Copyright 2001 InterPress Service

Date:  February 21, 2001   

Byline:  Danielle Knight

 

WASHINGTON, Feb 21 (IPS)  Indonesian pulp and paper facilities,

supported in the 1990s by financial institutions in Europe, Japan and

North America, have caused widespread deforestation and human rights

abuses, according to a new report released here.

 

Hundreds of thousands of hectares of Indonesia's remaining forests

were clear-cut in order to feed the nations rapid expansion of pulp

and paper production during the last decade, says a report released

this month by Bioforum, an Indonesian environmental group and

Environmental Defense, based in New York.

 

Export credit lending agencies based in industrialised nations that

backed these production facilities failed to require even minimal

environmental standards, says Stephanie Fried, a scientist at

Environmental Defense that co-authored the report.

 

Most of the internationally financed pulp and paper mills in

Indonesia have been accompanied by destruction of local peoples'

rights to land and livelihood and the armed suppression of dissent,

she says.

 

''As a result, massive public protests occurred against the forced

seizures and clear-cutting of community forests, against air

pollution, and against the pollution of major waterways by paper

and pulp mills and factories,'' she says.

 

The report is part of an international campaign by human rights

and environmental organisations to get government-backed export

credit agencies that are designed to promote investment overseas

to develop social and ecological guidelines for project funding.

 

Most of these institutions do not have environmental and human

rights standards and therefore end up competing with each other to

fund destructive projects that other institutions that have such

guidelines, will not touch, say activists.

 

The report describes the environmental impact of several large

Indonesian pulp and paper manufacturing plants, such as one facility

known as the Tanjung Enim Lestari pulp mill, or TEL, located in

the Benakat region of the island of Sumatra.

 

TEL's sister company, Musi Hutan Persada, was designated to prepare

massive pulp plantations to feed the mill. According to the report,

however, in 1992 Persada began illegally logging, despite protests

by local villagers.

 

''Inhabitants of Benakat were threatened by local authorities and

security forces who insisted that they give up 1,250 hectares of

their productive rubber gardens, upon which their livelihoods

depended,'' says the report.

 

Local officials, according to the report that was partially based

on testimony by villagers, threatened protesters with being accused

of ''hindering development'' a charge of subversion that could lead

to a prison sentence.

 

Despite outcries from the local community, in 1994 a 1.5 billion

dollar finance package was approved for the mill by Canadian,

Finnish, German, Japanese, and Swedish export credit agencies.

 

Three years later an additional 1.3 billion dollar finance package

was approved for the mill by the same governments.

 

Last year the authors of the report visited a village located on

a portion of a river near the mill's wastewater disposal site. They

said that adults and children who bathed in the river developed

skin ulcers after TEL had started its operations.

 

Villagers ''described the forced land seizures carried out by the

company under military guard and the heavy-handed way in which the

security forces had terrorised them when they had dared to voice

their opinions'', says the report.

 

Another pulp mill in Sumatra, known as Indah Kiat consumes 200

square kilometres of old-growth tropical forest per year because

its accompanying tree plantations are not yet mature, it says.

 

Over the past 12 years, Indah Kiat has deforested 278,000 hectares,

an area the size of Luxembourg, according to a recent report by

the Centre for International Forestry Research (CIFOR), an

organisation

based in Bogor, Indonesia that is part of the Consultative Group

on International Agriculture Research.

 

''It is clear that Indonesian pulp and paper producers have assumed

a high degree of financial risk by developing large-scale processing

facilities without first securing a legal and sustainable fibre

supply,'' says Chris Barr, a researcher with CIFOR.

 

The Bioforum and Environmental Defense Report says the mill has

been ''embroiled'' in conflicts pertaining to the sources of its

timber for pulping and was fined 1.4 million dollars for using

illegal timber.

 

Indonesia's main environmental coalitions, WALHI, documented the

mill polluting a river downstream, noting dead fish near the

factory's waste outlet and complaints of skin rashes by local

villagers.

 

The Indah Kiat mill, which is owned by the company Asia Pulp and

Paper, was financed through a 500 million dollar investment package

supported by Canadian, Finnish, Swedish, and Spanish export finance

institutions, according to the report.

 

German and US agencies also provided million dollar loans and

guarantees to the project under separate financial arrangements.

 

Export credit agencies ''must begin to correct their shameful record

of environmental and social negligence,'' says Bruce Rich, senior

attorney with Environmental Defense.

 

He says wealthy countries have failed so far to adopt common

environmental and social guidelines that are at least as rigorous

as existing standards for other publicly-backed lending institutions,

like the World Bank.

 

''This is financial and environmental folly,'' he says.

 

 

ITEM #2

Title:  Time And Forest Running Out For The Orangutan

Source:  Copyright Environment News Service (ENS) 2001

Date:  February 26, 2001

 

NEW YORK, New York, February 26, 2001 (ENS) - The world's largest

natural orangutan population will be extinct in about a decade unless

poaching and habitat destruction are stopped. That is the finding of

research funded by the Wildlife Conservation Society (WCS), based at

the Bronx Zoo.

 

The study appears in the current issue of the journal Oryx. It

documents the decline in orangutans - the only great ape found in

Asia - throughout their range.

 

The situation is worst in the Leuser Ecosystem in northern Sumatra,

Indonesia. Despite being home to Sumatra's largest protected area,

Leuser National Park, logging is rampant.

 

As a result, the number of orangutans living in the Leuser Ecosystem

has fallen from 12,000 in 1993 - the largest population in the world

- to about 6,000 last year. In 1998 and 1999, losses occurred at

around 1,000 animals per year.

 

"The alarming decline in Leuser's orangutan numbers implies that the

world's largest natural orangutan population will be extinct in a

decade or so, unless the current trend is stopped," said the study's

lead author, Dr. Carel van Schaik, a WCS research associate from Duke

University. Van Schaik has studied wild orangutans for more than 20

years.

 

"All remaining forests that are accessible by road or river are

subject to a seemingly unstoppable pandemic of illegal logging,

regardless of their protection status," van Schaik said, adding that

the logging is backed by the Indonesian military and police.

 

Van Schaik found that in areas that have been selectively logged, the

number of orangutans decreased by more than 60 percent. A decline in

trees that produce fruit - a critical food source for orangutans - as

well as the loss of canopy trees used by orangutans for travel, was

to blame she said.

 

Selective logging has been followed rampant illegal logging, said van

Schaik. In these areas orangutan population densities dropped by as

much as 90 percent. Many areas have been turned into agricultural

estates, and do not regenerate into forest.

 

"Unfortunately, selective logging is rarely followed by the 30 to 40

year rest period prescribed by law. Instead, timber removal

continues, illegally now, until just about all of the timber sized

trees of commercially valuable species are gone," said van Schaik.

 

In Borneo, the only other island where orangutans are found, the

situation is just as bad. Ethnic violence between the indigenous

Dayak population and Madurese settlers is adding to the region's

political instability, which in turn increases pressure on the

island's rainforest.

 

Illegal logging is widespread in Borneo where a wave of forest fires

in 1997 and 1998 killed off one third of the island's orangutans.

 

The WCS is calling for a moratorium on logging in old growth forests

until the political situation has stabilized. It wants a renewed

commitment to national parks.

 

"The documented, long term decline in orangutan numbers is both

depressing and a call to action," said Josh Ginsberg, WCS director

for Asia programs.

 

"We applaud the U.S. government for its leadership in providing $1.5

million in emergency aid for orangutan conservation in the coming

fiscal year, and for the establishment of a fund, under the Great

Apes Conservation Act of 2000, which will provide financial

assistance in years to come.

 

"But tough changes in natural resource management, and protection of

remaining habitat, are equally as critical to ensuring a future for

the orangutan," said Ginsberg.

 

Van Schaik said the orangutans' survival in the wild could provide a

unique window on the kinds of conditions that favored the origins of

human culture.

 

"Losing the wild orangutan would forever close that window," said van

Schaik. "If we act now, we can still save enough populations from

oblivion, but we cannot afford to waste any time."

 

The WCS has worked from its Bronx Zoo headquarters in New York since

1895 to save wildlife and wild lands throughout the world. The

organization works in 53 nations across Africa, Asia, Latin America

and North America, protecting wild landscapes that are home to a vast

variety of species from butterlies to tigers.

 

 

ITEM #3

Title:  Focus on Finance Newsletter - March 2001

Source:  AIDEnvironment and Profundo

Date:  March 5, 2001

 

Focus on Finance Newsletter 

 

Volume 1, Issue 1 - March 2001    

 

Introduction 

 

AIDEnvironment and Profundo are happy to announce the release of the

first issue of the Newsletter of the Focus on Finance initiative. In

this newsletter we highlight four case studies where forest issues

and financial institutions meet. The summaries of the first case

studies are presented below. Please visit our website

(http://www.focusonfinance.org) for the full stories and background

information on Focus on Finance. 

 

1. Boise Cascade 

 

Boise Cascade is a large American forestry company, with annual sales

of US$ 7.8 billion in 2000. To fulfil Boise's fibre demand, an area

the size of a small country must be logged, each year. A coalition of

environmental groups in the US clashes with Boise Cascade over old

growth forest logging and human rights violations. The coalition

calls upon Boise Cascade to innovate its forest management

practises and fibre purchasing policies.

 

Boise Cascade is listed on the New York Stock Exchange, and its

shareholders mainly are American institutional investors. The largest

are: Forstmann-Leff Associates, Dodge & Cox, Prudential Insurance

Company, and Franklin Mutual Advisers.

 

A significant part of Boise Cascade's activities is financed by bank

loans, especially by two large syndicated loans arranged by Bank of

America National Trust and Savings Association, Chase Manhattan Bank,

National Westminster Bank and Morgan Guaranty Trust. 

 

Read the full story at:

http://www.focusonfinance.org/Boisecascade.htm 

 

 

2.    Oil and gas industry in Russia 

 

"Thirty years of intensive energy resource exploitation has caused

great damage to the nature of the Russian Federation, especially to

the northern parts", a World Bank study concluded last June.

The environmental devastation has a great impact on the lives of the

local inhabitants of the Siberian tundra and boreal forests. 

 

Since the demise of the Soviet empire, many Russian as well as

Western oil companies have increased their efforts to exploit the

Siberian natural resources. And foreign banks - like Dresdner Bank,

Cr‚dit Lyonnais, Chase Manhattan and Commerzbank - have been co-

financing these  investments on a massive scale, especially between

the re-election of Boris Jeltsin in June 1996 and  the onset of the

Russian financial crisis of August 1998. Led by the activities of

some public institutions - the US Export-Import Bank and the EBRD - a

new wave of private bank loans seems to have started at the end of

last year. Some of the banks involved are HypoVereinbank, Cr‚dit

Agricole Indosuez,  WestLB, ING Barings and Soci‚t‚ G‚n‚rale.

 

While the West has now gained access to Russia's oil and gas

reserves, the Siberian environment and its inhabitants are still in

the same deplorable state as they were under the Soviet regime.  

 

Read the full story at: http://www.focusonfinance.org/Siberia.htm 

 

 

3.     Citigroup 

 

NGOs are all too familiar with the controversial Three Gorges Dam in

China, redwood logging in California's Headwaters Forest and the

Chad/Cameroon oil pipeline. Citigroup, America's biggest private

banking group is involved in all these megaprojects. Citigroup

"believes that working to conserve and enhance the environment is a

good business practise". Rainforest Action Network (RAN) argues that

Citigroup's believes are not put into practise and launched a massive

campaign against Citigroup. Because Citigroup's activities not only

affect forest ecosystems, a broad alliance of concerned

environmentalists, human rights activists and economic justice

advocates from all over the world is building up. As a first step,

the activists want Citigroup to impose social and environmental

criteria integrated throughout all aspects of their financing,

lending and trading businesses. 

 

Read the complete story at:

http://www.focusonfinance.org/Citigroup.htm 

 

 

4.    Dutch banks and Indonesian palmoil 

 

Indonesia plans to become the leading palm oil producer in the world.

A total area of at least 9 million hectares of forestland is

therefore slated for conversion into plantation monocultures. Between

1995 and mid-1999, hundreds of domestic and foreign plantation

companies invested over US$ 20 billion to develop their oil palm

estates. European, American and Asian banks provided the bulk of the

capital required to enable the plantation industry to expand their

estates. Among them were all major Dutch commercial banks: ABN-Amro,

Rabobank, ING Bank, MeesPierson (Fortis).  The expanding oil palm

industry brought about extensive deforestation, widespread social

conflict, illegal land clearing, economic vulnerability and

destructive forest fires.

 

The Indonesian economic crisis has temporarily slowed the rate of

conversion, but the plantation companies will again approach foreign

creditors to enable them to continue expansion. NGOs in Indonesia and

the Netherlands are concerned that this will aggravate the

environmental destruction and social unrest. They call upon the Dutch

banks to apply strict policies and criteria for their financial

services.  

 

Read the complete story at:

http://www.focusonfinance.org/Dutchbanks.htm 

 

 

Focus on Finance Newsletter 

March 2001 

 

Research and editing:  

Jan Willem van Gelder (Profundo): janwillem@profundo.nl 

Eric Wakker (AIDEnvironment): wakker@aidenvironment.nl   

 

Please let us know if you want to receive this newsletter.  The first

issues of the Focus on Finance Newsletter are realised with a grant

from the Ministry of Housing, Spatial Planning and Environment (VROM)

in the Netherlands. The contents of the newsletter do not necessarily

represent the position of the Ministry.