Banking giant HSBC have been getting bad press recently, with allegations of provision of bank services to criminals in the tax haven of Jersey under scrutiny. The scandal of the bank’s involvement in permitting extensive money laundering in the USA also continues. Another example of HSBC’s impressive grubbiness has received much less media attention, but shows a similar relaxed ethical attitude – the bank has been investing in rainforest destruction in the Malaysian territory of Sarawak, on the world’s third largest island of Borneo.
A report by campaign group Global Witness claims HSBC has provided financial services to companies linked to large-scale deforestation and “widely suspected of systematic bribery and corruption”, earning some $130 million in the process. Four companies in particular – Shin Yang, Sarawak Oil Palms, WTK and Ta Ann – are using HSBC investment to finance clearance of biodiverse forest in Sarawak. Several of the companies implicated have links to the family of the corrupt First Minister Abdul Taib Mahmud.
Borneo is one of the most important areas for tropical forest in the world, but its ancient forests have taken a brutal battering over the last few decades. Nowhere is this more obvious than in the Sarawak region of the island. The Malaysian state has only 0.5% of the world’s forest area, but exports nearly half the world’s tropical plywood, and, incredibly, more tropical timber logs than all Latin American and African countries combined. This onslaught has predictably dire consequences for both biodiversity and the quality of life of indigenous people.
Trashed forests and logging roads in Sarawak, intact forest over the border in Brunei…..
HSBC’s involvement is significant beyond the actual money they supply to the logging mafia; their backing gives dodgy firms an undeserved legitimacy that comes in very handy in attracting other business and investment. Global Witness estimate that the Sarawak firms have expanded to pursue similar operations in a dozen other countries.
HSBC spend a lot of time in cultivating a responsible image, for example co-opting conservation giant WWF into helping present a green face to the world. Of course, the bank hopes we’ll take this at face value and won’t ask too many awkward questions about what they do with their (our?) money – presumably WWF also share this hope, despite, ironically, having explicitly criticised Ta Ann’s corrupt practices last year. However, the recent wave of scandals assailing HSBC mean this image is wearing extremely thin, and their involvement in the devastation of Sarawak speaks more truth about the bank than their green rhetoric will ever reveal. There’s also a lesson here about the sort of company to which WWF are happy to lend their prestigious panda; if HSBC get to use it, what value as a conservation icon does it really have?