Two of the UK’s leading high-street banks are funding a company involved in land-grabbing in Uganda, green campaign group Friends of the Earth (FoE) have claimed.
According to new research, carried out by financial research consultancy Profundo on behalf of FoE, both HSBC and Barclays, along with UK investment firm Schroder, are funding Wilmar International, which is one of the world’s largest palm oil plantation owners and refiners.
Land grabbing involves the large scale acquisition of land in developing countries that displaces local communities and often violates their rights. A subsidiary of Wilmar in Uganda is linked to violations of land laws and environmental legislation in land purchases in the east African country.
Research from Uganda reveals that:
• Communities living and working on the land acquired by Wilmar for palm oil plantations have been displaced, often with no compensation or alternative work options.
• Approximately 3,600 hectares of forest have been destroyed to make way for palm oil plantations, affecting the environment and livelihoods of local people.
• Communities have complained of rising food insecurity in the country since large areas that formerly produced food crops for local consumption have been converted to palm oil plants.
HSBC is one of the largest financers of Wilmar, lending £777 million since 2009. Barclays has loaned more than £85 million, while UK investment firm Schroder holds £14 million worth of shares in the company.
Other major European financiers of Wilmar International in Europe are BNP Paribas (£203 million) and Deutsche Bank (£20 million).
Friends of the Earth’s International Food Campaigner Kirtana Chandrasekaran said:
“Investment in farmland is a major cause of land-grabbing, which wrecks the lives of thousands of communities overseas.
“The financial sector must take responsibility for its activities and ensure the companies they invest in respect human rights and abide by local environmental regulations.”
The Ugandan Government and UN agency International Fund for Agriculture and Development also back palm oil development in Uganda but, say FoE, have failed to adequately assess its consequences for local people.
Friends of the Earth Uganda campaigner David Kureeba said:
“Investors must push Wilmar to clean up its act or put their money elsewhere.
“Wilmar and its subsidiaries, backed by European money, are forcing communities from their land in Uganda.”
Friends of the Earth is now calling on investors and financiers of Wilmar to put pressure on the company to clean up its operations, or consider divestment. In 2012, the Norwegian Government Pension Fund Global (GPFG) divested from Wilmar, along with 22 other palm oil companies, because GPFG believed these companies were producing palm oil unsustainably.
FoE have insisted that Wilmar must bring an immediate end to land-grabbing, ensure adequate compensation, and any future development should obey national law and ensure free, prior and informed consent from affected communities.
According to the environment charity, European banks and pension funds should not contribute to land conflicts with local communities, deforestation or to companies which violate national laws.
Palm oil is commonly used in agrofuels, which are putting major and growing pressure on our land, food and forests. European countries have set targets and subsidies for agrofuels, to meet EU renewable energy goals, but these targets have driven the expansion of plantations overseas.
Legislation on agrofuels is currently being debated in the European Parliament and Council: the organisation is urging the EU to cap and then reduce to zero such fuels, as well as introduce full carbon accounting to prevent high carbon fuels like palm oil biodiesel from being sold in Europe.