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Conning the Congo
Posted by saunvedan on 30 July 2008.
As if Carving
up the Congo wasn't enough, logging companies are also evading paying taxes
and cheating the Democratic Republic of Congo (DRC) out of millions of euros in
revenue. A new report we have released today called Conning the Congo shows
how the logging company Danzer has avoided paying approximately €8 million in
tax from its logging operations in the DRC and the Republic of Congo. Just to put €8m in context in this
part of the world, that is more than fifty times the DRC Ministry of Environment's
annual operating budget.
The Congo rainforests of Central Africa form the second largest rainforest block on Earth after Amazon. They are of great importance for the global climate, the planet's biodiversity and the forest-dwelling communities who depend on them for resources and livelihoods.
World Bank ditches shares in Congo-trashing company
Posted by jamie on 10 December 2007.
There have been some great developments around our Congo rainforest campaign, as the FT reported on its website this morning that one of the arms of the World Bank will offload the shares it owns in a company known to be destroying the forest of the Democratic Republic of Congo (DRC).
The International Finance Corporation (IFC) has announced that it will divest its holdings in Olam International, a Singapore-based company which has operations in the DRC. The Congo report we released earlier this year showed how Olam was holding forest land granted in breach of the current moratorium which the World Bank itself helped establish and that it was also trading in dodgy timber. As a result, Olam has since given back its forest holdings to the DRC government, but it still buys illegal timber cut by local companies.
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World Bank Group finances company involved in the illegal destruction of the Congo rainforest
The World Bank's International Finance Corporation (IFC) is financing a Singapore-based trading group, Olam International Ltd, which has been involved in trading illegal timber in the rainforest of the Democratic Republic of Congo (DRC). The world's 'local bank', HSBC, is also providing financial services to the company, in breach of its environmental policy. Olam is today expected to report much improved profits in its half yearly financial results.
Nearly three weeks ago, the DRC provincial authorities seized illegal timber shipments from Olam International in the remote province of Bandundu. The area's Forestry Minister, Coco Pembe, accused the company of trading illegal timber, cut by local companies whose logging permits have expired.
These seizures of illegal timber follow revelations in Greenpeace's report earlier this year 'Carving Up the Congo' showing that in 2005, Olam was awarded three logging titles covering over 300,000 hectares, in violation of a 2002 moratorium which was supposed to stop the allocation of new logging titles in the DRC. Whilst Olam claims to have since handed back one title, the other two are subject to a legal review expected to report later this year. The report also revealed that Olam trades in timber from third parties whose destructive logging operations cause social conflicts, massive environmental damage and significant loss or state revenue.(1)
Olam is funded by the World Bank Group, whilst HSBC and Royal Bank of Scotland (RBS) are providing financial services to the company.
In December 2003, the IFC invested US$15 million in Olam and during 2004, a partial guarantee of a further $US50 million was also approved.(2) As of Fiscal Year 2006, the IFC held US$11.2 million in Olam loans and guarantees.(3) Despite this, the World Bank denies any IFC involvement in the DRC forest sector, stating on its website that "the Bank does not fund logging anywhere in Africa and our main advice to the Government of DRC is not to expand industrial logging". (4)
Forest campaigner Sarah Shoraka said, "This is an example of the World Bank's appalling double standards. While the left hand of the Bank claims to be saving the Congo rainforest, its right hand is helping finance its destruction. Rather than financing the plunder of the world's second largest rainforest, the World Bank should invest in strengthening forest law enforcement in the DRC, to control the wanton and illegal destruction being perpetrated by logging companies."
HSBC and Royal Bank of Scotland are two of Olam's principle bankers.(5) HSBC's forest sector guidelines prohibit it from providing financial assistance for commercial logging operations in "primary tropical moist forest" or in "violation of local or national laws in respect of illegal logging". The company claims to only support customers in this sector that are operating forests moving towards certification by the Forest Stewardship Council (FSC).(6) RBS does not even have a policy in regard to this.
Shoraka continued: "HSBC and RBS should stop facilitating the carve up of the Congo by cutting all links with Olam immediately."
Olam's operations have already faced legal issues elsewhere in Africa, and in 2004 it was fined $20,000 by the US Commodity Futures Trading Commission for illegal practices in the US market.(7)
The Congo forest is the world's second largest rainforest after the Amazon. In the DRC alone, an estimated 40 million people depend on the forests for their livelihoods. Greenpeace is calling for the cancellation of all logging titles issued since May 2002 and for the moratorium on new logging titles to be extended and enforced until the sector is under control and a land-use plan that includes the participation of local communities is fully in place.
Contact: Greenpeace Press Office on 0207 865 8115
NOTES TO EDITOR
1. The Greenpeace report 'Carving Up The Congo' can be downloaded at http://www.greenpeace.org.uk/media/reports/carving-up-the-congo
2. IFC Summary of Project Information, project numbers 20929 and 22659
3. IFC, letter to Greenpeace, July 31, 2007
4. World Bank website
5. http://www.listedcompany.com/ir/Olam/misc/Olam_ar2006.pdf (page 69)
6. HSBC Forest Land and Forest Products Sector Guidelines (pdf)
7. Commodity Futures Trading Commission, Release 4914-04 (CFTC Docket No. 04-13)
How the World Bank and HSBC are investing in deforestation
Posted by jamie on 29 August 2007.
Back in April, at the World Bank's spring meeting, there was much talk about the plight of the Congo rainforest. We'd just published a big report detailing how in the Democratic Republic of Congo (DRC) logging titles were being granted in breach of a moratorium that the bank had been instrumental in establishing. The report launch was so high profile, we were able to force DRC's rainforest high onto the agenda of the World Bank meeting and have also managed to secure another session at the upcoming autumn meeting.
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Congo timber ship blocked
Posted by jamie on 6 July 2007.
Right now, a group of Greenpeace climbers are perched on top of a set of cranes in the port of La Rochelle on the French Atlantic coast. They've been there since Wednesday night and as well as admiring a no-doubt magnificent view, they're also preventing a ship unloading its cargo of timber which has come from the Democratic Republic of Congo (DRC).
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What you can do to help protect the Congo rainforest
We need your help to protect the Congo rainforest. It's the second largest rainforest on Earth (only the Amazon is bigger), supporting millions of people as well as being stuffed full of unique and engandered species, including gorillas, chimpanzees and bonobos. And like all large forests, it is crucially important for regulating the local and global climate.
Gorillas in their midst
Posted by jamie on 6 June 2007.
The BBC have published a gallery of images focusing on the work of the rangers in Virunga National Park. Found in the Democratic Republic of Congo, it's the oldest reserve in Africa and home to the DRC's remaining mountain gorillas.
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Documentary evidence from the Congo
Posted by jamie on 30 May 2007.
If the testimonies of our two Congolese visitors weren't enough to convince you that there's trouble of the arboreal variety brewing in the Democratic Republic of Congo, try this film for size.
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Caterpillars and contracts: first-hand reports from the Congo rainforest
Posted by jamie on 21 May 2007.
Adrien Sinafasi Makelo (left) and René Ngongo (right) address MPs, civil servants and campaigners
On Thursday, I found myself at Portcullis House, an imposing edifice that sits across the road from the main Houses of Parliament building. The occasion was a panel discussion hosted by Greenpeace and (deep breath) the All-Party Parliamentary Group (APPG) on the Great Lakes Region of Africa, to discuss the crisis in the Congo rainforest. As the name suggests, it's a collective of MPs from all parties with a special interest in that part of the world who try to make sure issues affecting the region remain on the political agenda.
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When is a moratorium not a moratorium?
Posted by jamie on 4 May 2007.
Forest officials in the Democratic Republic of Congo are woefully under-resourced
It's not a trick question, and the answer is simple: when a moratorium is failing to stop the problem it was originally designed to address, then it's not much of a moratorium at all. There's one in place right now in the Democratic Republic of Congo (DRC) that is supposed to help prevent the destruction of the country's rainforest, and yet it has been repeatedly breached until the moratorium itself is practically worthless.
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