Wilmar’s top financiers score bad on their labour policies

Two of Wilmar’s top financiers scored zero on the assessment of their child and forced labour policies while four others only got a partial score. This reveals a serious lack of commitment by major financial institutions to uphold International Labour Organization (ILO) Conventions.
A new report by Amnesty International has revealed that Wilmar is involved in systemic labour exploitation practices in its palm oil plantations in Indonesia. The report, entitled “The Great Palm Oil Scandal: Labour Abuses Behind Big Brand Names” identified abuses including forced labour, child labour, gender discrimination and exploitative and dangerous working practices that put the health of workers at risk.
Between 2010 and 2016, Wilmar was financed with over USD 1 billion, by at least 49 different institutions.[1] Its top financiers are HSBC (USD 86 million), Mitsubishi UFJ Financial (USD 84 million), DBS (USD 76 million), Sumitomo Mitsui Financial (USD 71 million), OCBC (USD 70 million), Mizuho Financial (USD 65 million), BNP Paribas (USD 63 million), Commonwealth Bank of Australia (USD 57 million), Westpac (USD 46 million) and Credit Agricole (USD 838 million).
The Forests and Finance website scored the policies of 14 of the top 20 financiers. From this group, 6 scored zero and four got a partial score, showing a clear lack of commitment to protect international labour rights. However, among the top 20 financiers there are also 3 banks that received the highest score for their policies on child and forced labour. These are Rabobank (USD 5 million), Citigroup (USD 5 million) and JP Morgan Chase (USD 5 million). These banks seem to be in clear breach of their own policies by financing Wilmar and need to improve the implementation of their policies.
Wilmar, which controls 43% of the global palm oil trade, is certified by the Round Table of Sustainable Palm Oil. Amnesty International’s investigation shows that implementation and monitoring of the RSPO criteria are extremely weak and based on a superficial assessment system. The report finds that companies that buy from Wilmar overly rely on the RSPO certification system, especially for checking conditions at the plantation level.
This could also be the case for the financial institutions that are involved with Wilmar. Three of the top 10 financiers of Wilmar are RSPO member banks: HSBC, BNP Paribas and Rabobank. But outside the top 10 there are 3 other RSPO member banks: Citigroup (USD 32 million), ING Group (USD 12 million) and ANZ (USD 4 million).
TuK Indonesia calls on all Wilmar financiers to improve their own policies and due diligence procedures, and to actively engage with Wilmar to end any labour rights violations in its plantations. Financial institutions should not use RSPO membership as a proxy for their own due diligence and should commit to respect and uphold ILO conventions.
[1] This includes corporate loans, revolving credits, bond issuance and share issuance. Data retrieved from forstsandfianance.org, on 1 December 2016.

This post is also available in: Indonesian

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