Bank turns its back on April
The fourth-biggest lender to Asia Pacific Resources International has cut off the giant paper manufacturer’s line of credit, citing destruction of Indonesian rainforests as the reason.
Spanish-based bank Santander says it has decided to ‘not renew the current funding to April, and will not be extending further funding at this stage’.
“Any future loans will be conditional on April implementing new sustainability measures which address its involvement with deforestation,” the bank says.
The bank has lent April more than US$150m in the past four years, and in 2012 won Trade Finance Magazine’s ‘deal of the year’ award, along with four other banks, for brokering a five-year US$600m loan to the company.
Santander has been under heavy pressure from environmental group Greenpeace, which accuses April of rampant deforestation in Indonesia.
It is a similar tactic to the one Greenpeace successfully used against Asia Pulp & Paper (APP), which eventually led to many of APP’s big clients bailing over PR and environmental concerns.
While most Australian paper merchants abandoned APP and are only now starting to return, many are said to still be stocking April paper.
The NGO is hailing Santander’s decision as a major victory in its campaign against April, saying that while the company has plenty more backers – 22 banks have current loans – Greenpeace ‘can and will affect its access to international markets and financial services’.
Greenpeace UK forests campaigner Richard George says: “April will always claim to be able to get the money elsewhere, but the cost of doing so will go up each time another customer or financier walks away.”
Greenpeace says it will put enormous pressure on other international banks to make similar commitments, and claims big clients are already jumping ship.
Other top lenders include China Development Bank, which has given out twice as much as Santander, Bank of China, Citic, and ABN Amro.
April a year ago launched its Sustainable Forest Management Policy (SFMP) saying it will only source fibre only from forest which does not have a high conservation value, and only use plantations by 2019.
It says of it concession areas have been developed as plantation forests, while an additional 250,000 hectares are conserved and protected, and is also restoring a further 40,000 hectares of previously degraded land.
Greenpeace says the commitments are a long way off, are not well defined, are weakly enforced by suppliers, and that April has a history of not following through.
It says in the first six months of last year April pulped 1.3 million cubic metres of natural forest in just one of its Sumatran mills.
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