More Condemnation Of Taib As WTK Is Labelled The Guilty Party In Record Log Jam

Ecological disaster caused by WTK in the Rajang River October 2010

The UK’s top selling paper the Daily Mail has also taken up the recent report condemning HSBC for bank-rolling Taib’s greedy destruction of Sarawak’s rain forests.

The NGO Global Witness has released a major analysis showing how the bank, which claims to apply ‘green’ principles to its lending criteria, has nevertheless provided lending to such companies as Shin Yang, Ta Ann, WTK and Sarawak Oil Palm.

These are all Taib crony companies which have done untold damage to Sarawak, with little benefit at all going to the people or the state economy.

WTK caused the log jam

The report confirms Taib’s status as a world class eco-criminal and it also pin points the proof that WTK was indeed the guilty party behind the record 30 mile log jam in the Rajang River that sparked headlines the world over in 2010.

Sarawak’s Forest Department has released scarcely any information on the disaster and put it down to unlicensed logging up river.  However, Global Witness says that analysis of satellite information puts the blame squarely on WTK’s logging of the area for which the company has received no punishment or reprimand.

“the overwhelming majority of landslides occurred in the logging concession T/3476 issued to Interglobal Empire, a subsidiary of the WTK group. Most of the landslides originate where WTK have cut logging roads across steep slopes, have excessively cleared to the side of roads, and have cleared down to rivers”.[Global Witness report]

Shareholder in eco-destruction and the Rajang River logjam disaster – Jamilah Taib has become one of Canada’s wealthiest socialites, thanks to exploiting Sarawak

Global Witness points out that Taib’s two daughters are major shareholders in WTK as is his brother Tufail, as was revealed last year by Sarawak Report.

Could this be the reason why the Sarawak Government has never published its probe into the logjam disaster?

WTK has also been found breaking the rules in Papua New Guinea and the Amazon, where the greedy company and its Taib family shareholders are further expanding their operations.

Because of the involvement of Taib’s daughters and Tufail Mahmud in WTK, Global Witness points out that by lending to the company HSBC is violating money-launding regulations against investing in so-called Politically Exposed Persons (PEPs).  The same goes for investments in Ta Ann, because chairman Hamed Sepawi (Taib’s cousin) is similarly a PEP:

“At least two of HSBC’s current Sarawak clients are partially controlled by or owned by members of Taib’s family. By providing banking services to a sector notorious for endemic corruption and high-level political links, HSBC is at serious risk of violating international money laundering regulations, which require HSBC to carry out extra checks on PEPs in order to avoid handling suspicious funds”.

Destruction by Shin Yang of the largest single area of primary forest to be lost in anywhere in Borneo

Shockingly, the report describes how Shin Yang’s logging concession in Ulu Belaga is in an area that had been set aside for a National Park in the Heart of Borneo area, but has since 2005 been completely destroyed thanks to Taib’s issuing of licences to the company.

“investigations into Shin Yang’s operations in the Ulu-Belaga region reveal ShinYang subsidiaries are currently logging, clear felling and planting oil palms over one of Sarawak’s last pockets of pristine primary forest, inside an area that has been formally proposed by Sarawak’s authorities as a national park and lies within the flagship multilateral conservation initiative, the “Heart of Borneo”. As of February 2012, less than ten per cent of the 135,000 ha of this proposed national park remained unlogged and satellite measurements indicate that during 2005-2010, this concession was the largest single area of intact primary forest to be lost anywhere in Borneo”

Shin Yang is ripping out the last remaining area with a major supply of primary timber in Sarawak and dragging them to this plywood factory in Bintulu

Intimidation by gangsters linked to Shin Yang

The report also documents extensive intimidation of local people by timber companies operating in their area, such as Shin Yang, and also relates evidence that the same timber companies were bribing and threatening locals into voting BN at the last election in a clear determination to keep Taib in power to protect their destructive rampages in the jungle.

Multiple independent sources, including former Shin Yang staff and communities affected by the company’s operations, provided testimony to Global Witness alleging various abuses carried out by Shin Yang. Global Witness was told that Shin Yang supervisors routinely bribed and intimidated local communities so that they would vote for Chief Minister Taib’s coalition at elections. Former staff also told Global Witness that “armed gangsters” had assaulted Shin Yang staff suspected of speaking out against company operations. One villager told Global Witness that “armed gangsters” visited their village and shot livestock following complaints by the community to company management about logging operations.[Global Witness Report]

And yet the report points out that HSBC has provided the Ling family with a $3.6million loan to invest in these operations. In an example of the corruption that plagues Sarawak, Global Witness points out that none other that Sarawak’s former Director of Forestry Leo Chai has been given a fat chunk of one of Shin Yang’s major subsidiaries, thereby benefitting from all the concessions handed to it.

Profile of corruption – Shin Yang and how ‘green’ HSBC has profited

“The Shin Yang subsidiary logging the proposed Danum-Linau National Park is five per cent owned by Leo Chai, who should be considered a PEP as being the former Director of the Sarawak Forestry Department, under whose tenure it is likely the Danum-Linau National Park was proposed”, explains the report.

Sarawak Oil Palm

Taib’s hangers on. Of the native leaders who betrayed their peoples for money none come worse than DCM Alfred Jabu and his family

Another company highlighted by the Report as particularly destructive to Sarawak is Sarawak Oil Palm, a company run by Alfred Jabu’s son Gerald Rentap in another clear conflict of interest.

Global Witness details the appalling extent of the destruction carried out by Sarawak Oil Palm in the past very few years, thanks to concessions handed to the company by Taib Mahmud:

Yet Sarawak Oil Palms Bhd, an HSBC client, has, over the last five years been clearing, draining and planting oil palms on a “globally significant” peat dome that is 12 metres thick at its deepest point having formed over 4,500 years. Satellite images show that much of the area was in a pristine or largely undisturbed state as recently as 2003. The area was considered high conservation value by departments of both the Sarawak and Federal Malaysian Government, and approximately 1,400 ha of the estate overlapped with the proposed Mud Volcano National Park, which was hometo thousands of threatened ramin trees and was referred to as a conservation area and protected catchment in a 2008 report presented by Malaysia to the Convention of International Trade in Endangered Species. Satellite images show almost all of the oil palm concession was cleared and drained between 2005 and 2009, including the area of overlap with the proposed National Park”.

Sarawak Oil Palm’s destruction is clearly shown by the pink area’s expansion between 2005-2009

Sarawak Oil Palm is another recipient of loans from HSBC.  HSBC notably bankrolled the major Environment and Media conference that was held in Kuching in 2005.  Was this a genuine attempt at improving Sarawak’s ‘green’ image or just another good networking opportunity for the bank which it can be seen has made millions from helping Taib grab and destroy Sarawak’s once unparalleled natural environment?

Global Warming

In terms of Global Warming caused by the carbon emissions created by Sarawak Oil Palm’s destruction of this area the report is uncompromising.

“After the initial release of an estimated 2 million metric tones of C02 from clearing the forest itself, vast quantities of C02 will continue to be released into the atmosphere as the peat dome continues to be drained for oil palm development.”

The world has Taib Mahmud’s greed, assisted by HSBC, to thank for this extra boost to global warming.

‘Cautious approach’ to destroying peat swamp? HSBC helped bankroll SOP’s destruction of this area in the past few years. An betrayal against his people by Taib crony Gerald Rentap Jabu in return for vast wealth for himself.

Ta Ann is not eco-compliant and should be investigated for money-laundering

Global Witness also reveals that Ta Ann benefits from further loans from HSBC even though this company (controlled by Taib cousin Hamed Sepawi) has no acceptable eco-credentials.  Nevertheless Ta Ann is battling to continue to source logs in Tasmania’s wild forests and to describe its products as ‘eco-friendly’.

“Ta Ann’s 2011 annual report shows that HSBC remains a “principal banker” yet HSBC’s Forest Policy states that, by 2009 it requires its clients to have 70 per cent of their operations certified as sustainable to Forest Stewardship Council (FSC) or equivalent standards. Ta Ann has no operations in Sarawak that are independently certified to FSC or equivalent standards and has failed to obtain full independent verification of legality for its concessions in Sarawak. It would be impossible for most of Ta Ann’s timber concessions to be certified sustainable since they are overlapped by licences issued to Ta Ann for clearfelling. Ta Ann has one subsidiary in the Australian state of Tasmania, certified to the weaker PEFC standard, but this subsidiary is itself a controversial operation owing to its logging in areas of Tasmania’s old growth forest that the government believes meet criteria for World Heritage status.”

The report also notes that because Sepawi is a politically exposed person investors like HSBC should also be considering the issue of money-laundering, which is a matter that should also be of concern to the Tasmanian State Government which has been doing business with the company.

Indeed the Global Witness report summarises the full extent to which Taib Mahmud and his immediate family can and should be recognised as one of the greatest single menaces not just to the environment and people of Sarawak, but also a threat to every other forested region on earth.

As Taib enters the forum of Japan’s International Tropical Timber Organisation (ITTO) meeting next week he deserves to be treated according to the growing, in belated, international recognition of his pariah status on the environment.

The Daily Mail article follows:

Allegations: HSBC has made nearly £100m through 'bankrolling' forestry companies who have destroyed vast swathes of the Malaysian rainforestAllegations: HSBC has made nearly £100m through ‘bankrolling’ forestry companies who have destroyed vast swathes of the Malaysian rainforest

Global banking giant HSBC has raked in nearly £100m by bankrolling Malaysian logging companies who cause widespread rainforest destruction and abuse human rights, a watchdog has claimed.

The bank is also providing financial services to companies widely suspected of systematic bribery and corruption in Sarawak, Malaysia, according to an investigation by The Global Witness.

The region exports more tropical timber than South America and Africa combined and HSBC’s loans and services to logging conglomerates have generated at least £80m in interest and fees.

The watchdog claim that these companies have devastated Malaysian Borneo’s rainforests and carried out abuses against indigenous peoples.

These companies are currently logging in an area three times the size of Norway.

‘HSBC has bankrolled some of the world’s worst logging companies and in some cases got them off the ground with their first commercial loans,’ said Tom Picken, Global Witness Forest Campaign leader.

‘The destruction they have caused simply couldn’t have happened without the services and kudos the bank provided.’

The Global Witness report, entitled ‘In the Future There Will Be No Forests Left’, also suggests that HSBC is at risk of violating international anti-money laundering regulations because of its links to Malaysia’s ‘corrupt’ forestry sector.

Because Sarawak is headed by Chief Minister Abdul Taib Mahmud, currently under investigation by Malaysia’s Federal Anti-Corruption unit, HSBC could fall foul of regulations requiring extra checks on clients linked to senior politicians.

Taib is widely believed to use his complete political control over the region’s forestry licensing to benefit his family and associates, says the report.

Global Witness say they have obtained strong evidence showing Taib and members of his family are engaged in systemic corruption and money laundering.

Destruction: The report claims that four Malaysian logging companies are being bankrolled by HSBC while in breach of the company's own regulationsDestruction: The report claims that four Malaysian logging companies are being bankrolled by HSBC while in breach of the company’s own regulations

‘In light of recent money-laundering scandals, HSBC and its financial regulators urgently need to find out whether the bank is handling illegal transactions from this notoriously corrupt and destructive sector,’ added Picken. 

The report names four forestry companies linked to HSBC who have violated the bank’s 2004 forestry regulations, which state that operations must be certified to the Forest Stewardship Council (FSC). None of the four had any FSC certification.

They include:

  • The Shin Yang group, which is allegedly logging and clearing pristine rainforest in an area with designated national park status. Affected communities and former staff say the company has hired armed gangsters to intimidate those who speak out about their activities.
  • Sarawak Oil Palms, who are allegedly clearing high conservation value peat forests for oil palm plantations, releasing vast quantities of greenhouses gases.
  • WTK Group have been logging destructively in the ‘Heart of Borneo’ – triggering a series of catastrophic landslides that blocked a 50km stretch of Sarawak’s largest river in 2010.
  • Ta Ann Group has been clearing rainforest which is home to the critically-endangered orangutan.
Endangered: Global Witness say at least one of the logging companies is devastating the habitat of orangutangs in Malaysia Endangered: Global Witness say at least one of the logging companies is devastating the habitat of orangutangs in Malaysia

Picken added: ‘In 2004 HSBC brought in progressive world-wide forest policies designed to avoid precisely these sorts of commercial relationships and make the bank a market leader on sustainability.

‘It has consistently traded on these commitments in public, yet failed to meet them in practice. The bank should hold its hands up, drop these clients immediately and compensate the victims for the mayhem it has helped cause.’

A HSBC spokesman said: ‘HSBC cannot discuss current or former clients, whether individuals or corporates, for reasons of confidentiality – in fact to do so would be against the law.’

‘HSBC remains committed to sustainable banking, working with interested parties and undertaking responsible engagement with clients to ensure they meet and continue to comply with its sector-specific policies. 

‘We value the information that NGOs can provide us to help us improve our Sustainability Risk Policies over time and also to help us assess the commitment, capacity and track record of our customers to implement them.

‘We look forward to reading your report on forestry in Sarawak and will follow up on credible evidence of social or environmental impact and will take action where necessary.

Your views are valuable to us, but Sarawak Report kindly requests that comments be deposited in suitable language and do not support racism or violence or we will be forced to withdraw them from the site.


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