An excavator piles natural forest logs at a log pond. Photo © Ulet Ifansasti / Greenpeace
Banking giant Santander says it will not extend further financing to Asia Pacific Resources International Limited (APRIL) due to evidence that the Singapore-based pulp and paper company is continuing to destroy rainforests in Indonesia. The move comes after Greenpeace launched a global campaign against the bank.
In a message sent to customers Tuesday, Banco Santander (NYSE:SAN) admitted to a relationship with APRIL and said it recently requested an audit of the logger’s operations, which raised red flags.
“Our parent company, Banco Santander, through its offices in Asia, has a business relationship with APRIL, a pulp and paper company in Indonesia,” Santander said. “In recent months, Banco Santander requested they undergo an independent audit into their environmental practices. This has been carried out by APRIL’s independent Stakeholder Advisory Committee (SAC) and KPMG, and APRIL has put out an action plan in response to their recommendations.”
“Based on further internal analysis, Banco Santander has decided to not renew the current funding to APRIL and will not be extending further funding at this stage. Any future loans will be conditional on APRIL implementing new sustainability measures which address its involvement with deforestation.”
Active clearance of peatland forest. Photo © Ulet Ifansasti / Greenpeace
Santander’s statement went on to tout the bank’s green credentials.
“Banco Santander’s Social and Environmental Policy sets out how we govern the Bank’s sustainability activity,” it continued. “It specifically refers to the impact of the Bank’s activities on conserving biodiversity and sustainable management of resources, labour rights, prevention of pollution, health and safety in the community and respect for indigenous peoples.”
Santander made no mention of the Greenpeace campaign, which has so far generated more than 145,000 complaints to the bank.
While Santander isn’t APRIL’s largest lender, it has played an important role in brokering recent finance for APRIL, which is expanding its footprint in peatlands and rainforests in Sumatra and Kalimantan. Greenpeace released further documentation of that expansion this week in the form of a video.
APRIL does has established a sustainability policy, but environmentalists say it falls well short of others being adopted by plantation giants operating in Indonesia. For example, when confronted with evidence that it was continuing to clear forest on a peat island off the coast of Sumatra, APRIL said the activity was consistent with its policy.