17 Multinational Brands and Banks Fail to Stop Deforestation and Exploitation

BNI, CIMB, and ICBC, get the worst bank reputation while Procter & Gamble, Mondelēz, and Nissin Foods brands still lag behind their peers.
Gamble, Mondelēz, and Nissin Foods brands are still lagging behind their peers

Thursday, June 16, 2022. Giant multinational brands and banks are failing to stop
deforestation and human rights abuses in their business practices, according to a new
Rainforest Action Network’s (RAN) latest report. The report evaluates the public policies and
commitments issued by brands and banks that use and finance commodities at risk to tropical rainforests.
commodities that put the world’s last tropical rainforests at risk in their production. The results
evaluation found that none of the 17 multinational brands and banks had taken adequate action to reduce their
to reduce their contribution to forest destruction, land grabbing, and violence against Indigenous Peoples and local communities,
and violence against Indigenous Peoples and local communities.

Bank Nasional Indonesia (BNI), Malaysian Bank CIMB, and Chinese-owned multinational bank ICBC,
received the worst reputation with an ‘F’ grade in the evaluation. While corporate brands
brand companies such as Procter & Gamble, chocolate manufacturer Mondelēz, and Japanese food manufacturer
Nissin Foods also lagged behind their peers in realizing policies to
ending deforestation and human rights abuses in the supply chains of forest-risk commodities.

“These companies’ NDPE policies do not apply to all suppliers, investees, and clients with which they have business relationships.
and clients with whom the companies have business relationships, and do not include all forest-risk commodities purchased.
all forest-risk commodities purchased or financed by the company and only applies to one commodity.
apply to only one commodity. This is a big gap that needs to be fixed,” said Fitri Arianti
as RAN’s Forest Campaigner.

“The lack of action taken, including methods of implementing policies that are not credible, are also
is also the basis for the assessment of these companies getting a bad score. We assess that these companies
brands and banks do not have clear benchmarks in implementing this policy,” Fitri added.
added. RAN also cautioned that the claims that have been made by many of the companies
brands and banks about the elimination of deforestation or human rights violations committed to date are not credible as there is no
to date are not credible because there is no credible independent verification mechanism
used to ensure that NDPE policies are adhered to.

While many of these brands and banks have adopted various NDPE commitments and policies and are
uphold human rights and Indigenous Peoples in their business practices after COP26. However,
since the adoption of the Paris Agreement, these giant global banks are shown to have provided
at least USD 22.5 billion to forest-risk commodity companies operating in the three largest
largest tropical forest regions in Indonesia, the Congo Basin and the Amazon. JPMorgan Chase
was the largest, providing USD 6.9 billion, while MUFG followed with USD 4

BNI, CIMB and ICBC are still lagging behind as they have no NDPE policies at all, though
in recent years other banks such as MUFG issued partial NDPE policies for palm oil.
policy for palm oil. However, MUFG does not require palm oil traders to comply with this policy, and fails to regulate the provision of
this policy, and fails to regulate its lending to other commodities such as pulp & paper and beef, which are also risky.
& paper and beef that also pose forest risks.

MUFG, on the other hand, continues to fund Indofood, Indonesia’s largest food company which was
expelled from the Roundtable on Sustainable Palm Oil (RSPO) certification scheme over labor abuses by one of its palm oil subsidiaries, PT London Sumatera (Lonsum).
(Lonsum). Whereas banks such as Citigroup, Standard Chartered, and the brand name PepsiCo have all cut ties with the company.
PepsiCo, have all severed business ties with Indofood, while MUFG has continued to
continues to fund it, despite recently pledging to clean up its palm oil investments.

“Since being expelled from the RSPO, labor conditions on Lonsum plantations have continued to deteriorate. Although
MUFG’s huge injection of funds, Lonsum still does not give severance pay to more than 1,000 workers.
give severance pay to more than 200 workers they laid off during the pandemic.
The injection of funds received by the company is not used to improve the rights of palm oil workers.”
said Herwin Nasution, Director of the Organization for the Strengthening and Development of People’s Businesses (OPPUK).

OPPUK, SERBUNDO and local legal aid organization LBH Palembang are currently
filing two lawsuits on behalf of almost 200 Lonsum workers in South Sumatra
for their severance pay. If they are won, Lonsum will have to pay an additional
USD 960,000 in severance pay to the workers, meaning that Lonsum is now
facing a severance debt for workers of more than one million dollars.

Procter & Gamble is also the worst rated brand company for still receiving
palm oil from one of the subsidiaries of Indonesia’s largest rainforest destroyer, the Royal
Golden Eagle group (RGE) under the control of Sukanto Tanoto. Not only connected
with Procter & Gamble, Sukanto Tanoto also controls the Pinnacle Company Limited which
Toba Pulp Lestari (TPL), a pulp and paper company. TPL has a
a track record of human rights violations and land conflicts with the Toba Batak Indigenous Peoples in North Sumatra that have not been resolved to date.
North Sumatra that has not been resolved to date.

PT TPL began destroying forests in the customary territory of the Pargamanan-Bintang Indigenous Community
Maria around 2003, the community was not consulted and not informed at all about their company’s HTI development plans.
about their company’s HTI development plan. At that time, TPL’s activities were always escorted by
security forces and local law enforcement – an obvious form of intimidation to quell dissenting Indigenous Peoples
suppress dissenting Indigenous Peoples.

Study and Advocacy Coordinator of the Community Initiative Development Study Group (KSPPM),
Rocky Suriadi, revealed how PT TPL began to seize the frankincense forest of the
Pargamanan Bintang-Maria Indigenous Community. “The Pargamanan-Bintang Maria frankincense forest which is
source of livelihood, and the community’s life is threatened to be deforested to plant eucalyptus by PT.
eucalyptus by PT TPL, while the community is still waiting for state recognition of their customary territories and forests,” Rocky said.
and their customary forests,” Rocky explained.

All banks and brands evaluated failed to require proof of Free, Prior and Informed Consent (FPIC).
of Free, Prior and Informed Consent (FPIC) from their clients, suppliers and investees.
of their investments. To date, not a single bank or brand has published the procedures they will use to ensure the rights of Indigenous Peoples.
procedures they will use to ensure Indigenous Peoples’ and local communities’ rights to refuse
development on their customary lands are respected.

Some brands have made improvements to their policies over the past year,
including Colgate-Palmolive, Ferrero, and Kao, although they still lag behind their peers.
Unilever is the only brand that has adopted a credible policy to address its impacts and risks from its commodity supply chain.
impacts and risks from its commodity supply chain. Nestlé remains the only
brand committed to disclosing its forest footprint worldwide. CIMB Bank
Malaysia did announce its NDPE policy, but the announcement did not clarify the
the scope of the policy and did not specify which commodities would be included and the timing of the policy.
implementation of the policy.

Edi Sutrisno of TuK INDONESIA called on banks that are left out of this evaluation
to immediately cease funding companies with proven links to deforestation and human rights abuses and to encourage banks operating in Indonesia
to align their funding portfolios with the newly issued Green Taxonomy
by the Financial Services Authority (OJK) this year.


Note to editors:
The brands evaluated are: Colgate-Palmolive, Ferrero, Kao, Mars, Mondelēz, Nestlé,
Nissin Foods, PepsiCo, Procter & Gamble; and Unilever. Meanwhile, banks that support
financing of the above brands include: ABN Amro, Bank Negara Indonesia (BNI), CIMB,
DBS, Industrial and Commercial Bank of China (ICBC), JPMorgan Chase, and Mitsubishi UFJ Financial Group (MUFG).
Financial Group (MUFG). For the full report and to find out the methodology used to
the performance of multinational brands and banks, you can read the summary of the Evaluation of Brands and
Banks Driving Deforestation and Human Rights Violations 2022 through the following link.

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