Financial Titans, Top Brands Implicated in Probe of 'Devastating' Palm Oil Industry Abuses

 

"Papua New Guinean communities… are being sold out by their own government and global financial institutions in favor of a small number of highly destructive companies."

JESSICA CORBETT

October 8, 2021

From the use of child labor and beatings of locals to the destruction of "climate-critical rainforest," an investigative report published Thursday exposes how the abuse of people and the planet by Papua New Guinea's palm oil sector has direct ties to global financiers and major household brands.

"It is increasingly urgent that governments legislate to prevent supply chains and global financiers bankrolling deforestation and human rights abuses."

For its news report—entitled The True Price of Palm Oil: How global finance funds deforestation, violence, and human rights abuses in Papua New Guinea—the international NGO Global Witness conducted a two-year investigation into Bewani Oil Palm Plantations Ltd., East New Britain Resources Group (ENB), and the Rimbunan Hijau Group. What it found implicates some of the world's most profitable corporations.

Global Witness examined cargo shipments, company records, and satellite imagery, and interviewed people in the rural communities directly affected by plantations in Papua New Guinea (PNG). Undercover investigators also secretly recorded conversations in which ENB executives and a business partner bragged about using "schoolchildren" to pick the oil palm fruits, bribing local ministers, and paying off police to "brutalize villagers."

The United Kingdom's Channel 4 News, which exclusively reported on some of Global Witness' findings, noted that ENB denied the bribery and using child labor, and both ENB and its business partner Tobar Investment denied any involvement in police brutality. All the companies contacted by news outlet said they have severed ties with ENB.

According to Global Witness, "Tainted palm oil and its derivatives from Papua New Guinea plantations were sold on to well-known big brands including Kellogg's, Nestlé, Colgate, Danone, Hershey, and PZ Cussons and Reckitt Benckiser, the parent companies of Imperial Leather and Strepsils."

The report also points out that PNG palm oil operations have received direct and indirect financing from international institutions including BlackRock, California Public Employees' Retirement System, Maybank, and Norges Bank Investment Management—which manages Norway's sovereign wealth fund—OCBC Bank, and Robeco Institutional Asset Management B.V.

"Papua New Guinean communities have managed and protected their forests sustainably for countless generations," Global Witness senior investigator Lela Stanley said in a statement. "This investigation shows they are being sold out by their own government and global financial institutions in favor of a small number of highly destructive companies, with devastating human rights and environmental consequences."

"This investigation is yet further confirmation that the global financial system is broken—the business-as-usual, voluntary approach of past years has led us into climate crisis," she continued. "Firms like BlackRock talk a big game on their commitment tackling climate change and protecting human rights, yet our revelations show its money is ultimately financing the destruction of climate-critical forests, the use of child labor, and other human rights abuses."

Stanley added that "it is increasingly urgent that governments legislate to prevent supply chains and global financiers bankrolling deforestation and human rights abuses."

Palm oil, which comes from the fruit of the oil palm tree, is used in various food products, detergents, and cosmetics. While the new report focuses on operations in PNG—an island nation north of Australia home to the world's third-largest remaining rainforest—the industry has long faced criticism for driving deforestation and endangering workers and wildlife.

The report includes recommendations for the PNG government as well as those of the European Union, United Kingdom, United States, and other nations with involved financial institutions and businesses importing palm oil. There are also recommendations for the palm oil companies named in the report, global buyers, and banks as well as their shareholders and investors.

"PNG stands on a precipice," the report warns. "Rural communities and the forests and biodiversity they depend on are in the path of a massive expansion of the palm oil industry. This would be catastrophic if allowed to proceed in the same reckless, irresponsible, and unethical way as exposed in this report."

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