Citigroup requires Southeast Asian timber client to obtain independent, third party certification.
Forest protection advocates, human rights activists and socially responsible investors (SRI) today commended Citigroup (NYSE:C) for its proactive constructive engagement to help end endangered forest destruction, rampant illegal logging and related human rights abuses in Southeast Asia. During an “Environmental and Social Risk Management Briefing” at Citigroup’s New York headquarters this week, CEO Chuck Prince told stakeholders that client Rimbunan Hijau, a Malaysian logging giant with a well-documented history of human rights abuses and illegal logging activities, must comply with a set of progressive new environmental policies adopted by the bank last year. Mr. Prince affirmed that Citigroup will require Rimbunan Hijau to obtain credible, independent, third party certification for its Papua New Guinea operations and specified the Forest Stewardship Council program by name during his comments.
The environmental and SRI communities are awaiting formal targets and timelines from Citigroup for Rimbunan Hijau’s certification process. In January 2004, Rainforest Action Network and Citigroup announced that Citigroup had adopted a comprehensive environmental policy including initiatives on endangered ecosystems, illegal logging, ecologically sustainable development and climate change. During the implementation process, Rainforest Action Network alerted Citigroup to investigations into Rimbunan Hijau by London-based Environmental Investigations Agency, Greenpeace Australia Pacific and Dateline, Australia’s longest-running international current affairs television program.
A recently released report on Rimbunan Hijau prepared by the Papua New Guinea Department of Labour and Employment found widespread corruption, bribery and human rights abuses. The investigation revealed that Rimbunan Hijau employees were treated like slaves by the company’s privately paid police squad and forced to live in appalling conditions in company-controlled logging camps.
A November 2004 news program entitled “Jungle Justice,” produced by Dateline for SBS-TV in Australia, exposed a culture of violence and cover-up at the heart of Rimbunan Hijau’s logging operations in Papua New Guinea.
A January 2004 Greenpeace report, “The Untouchables: Rimbunan Hijau’s world of forest crime and political patronage,” also documented allegations that the Malaysian cartel was trafficking unlawfully harvested rainforest timber for export to the global marketplace, destructively logging vast areas of ancient forest in defiance of national laws, local customs and the rights of resource owners, and using the protection of political elites to impoverish local people. The report concluded that Rimbunan Hijau is “a transnational corporation that represents everything that is wrong with the way in which forest resources are being managed. Rimbunan Hijau presents the perfect test against which to judge the resolve of the international community to deal effectively with the problems of forest crime and the trade in illegal timber.”
“Citigroup’s aggressive constructive engagement with Rimbunan Hijau sets a precedent for changing business-as-usual to business as it should be,” said Ilyse Hogue, director of the Global Finance Campaign at Rainforest Action Network. “While Washington continues to ignore the will of its constituents on environmental issues, Citigroup is evidence that good leaders on Wall Street are recognizing the imperative to work with civil society and confront the global humanitarian and environmental challenges before us.
Citigroup is leading the global banking sector on integrating principles of sustainability into its core business practices. This week’s announcement by Chuck Prince is further proof that well-implemented initiatives can play a role in making the lives of the struggling communities better tomorrow than they are today. The rest of Wall Street now faces a clear choice to move toward environmental and social leadership or risk losing consumer confidence.”
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