• About Us
    • Fact Checking Policy
    • Ownership & funding information
    • Volunteer
  • Subscribe
  • Letter submission
    • Submissions Policy
  • Contact Us
The Online Citizen Asia
  • Opinion
    • Editorial
    • Commentaries
    • Letters
    • Comments
  • Current Affairs
    • Singapore
    • Malaysia
    • Indonesia
    • China
    • ASEAN
    • Asia
    • International
  • Finance
    • Economics
    • Labour
    • Property
    • Business
  • Community
    • Arts & Culture
    • Consumer Watch
    • NGO
    • Lifestyle
    • Travel
  • Politics
    • Civil Society
    • Parliament
    • Transport
    • Education
    • Environment
    • Health
    • Housing
  • Law & Order
    • Legislation
    • Court Cases
No Result
View All Result
  • Opinion
    • Editorial
    • Commentaries
    • Letters
    • Comments
  • Current Affairs
    • Singapore
    • Malaysia
    • Indonesia
    • China
    • ASEAN
    • Asia
    • International
  • Finance
    • Economics
    • Labour
    • Property
    • Business
  • Community
    • Arts & Culture
    • Consumer Watch
    • NGO
    • Lifestyle
    • Travel
  • Politics
    • Civil Society
    • Parliament
    • Transport
    • Education
    • Environment
    • Health
    • Housing
  • Law & Order
    • Legislation
    • Court Cases
No Result
View All Result
The Online Citizen Asia
No Result
View All Result

Report: Singapore banks financed up to SG$1.9 billion to companies linked with haze-causing fires in Indonesia

by kathleen
11/12/2019
in Current Affairs
Reading Time: 5 mins read
0

Aerial view forest fire and smoke Java, Indonesia. (Image by Alexpukner / Shutterstock.com)

Indonesia has just experienced yet another year of catastrophic fires that have caused immense damage and blanketed the country and its neighbour in a toxic haze. Schools, airports and businesses closed, as six Indonesian provinces declared a state of emergency. This year’s fires blazed over 850,000 ha of land and forest, an area more than 10 times the size of Singapore.
The haze, described by Indonesian President Jokowi as a “national embarrassment” has become a recurrent international environmental and public health crisis. The United Nations (UN) warned that Indonesia was putting 10 million children under five at risk from air pollution. The fires also pose a major climate change risk given much of it involves ancient tropical peatlands that are known to store approximately 2,600 tons of carbon per hectare.
A recent study by the Environmental Study Centre in Riau University estimates that the fires in Riau, one of Indonesia’s worst hit provinces, have resulted in material losses of US$3.6 billion (SG$4.89 billion). At a national level, the World Bank estimated that the fires in 2015 resulted in US$16 billion (SG$21.74 billion) loss and damage nationwide.
On 30 October, Indonesian NGOs Jikalahari, TuK-Indonesia and WALHI Eksekutif Nasional revealed that the Indonesian Ministry of Environment and Forestry (KLHK) has sealed off 64 palm oil, pulpwood and rubber plantations due to this year’s fires.
This means that KLHK has issued a ‘stop work order’ in each of the plantations, preventing any work, processing, or transportation of any goods pending investigations. This is done when the Ministry suspects that companies have been using fire deliberately. The stop work order remains in effect until the investigations are completed, at which point, KLHK will decide if there is any evidence to charge the plantations via administrative sanctions or court action.
While big plantation companies have been quick to blame smallholders, 17 corporate groups were identified as parent companies of the subsidiaries operating the plantations that have been sealed, including major conglomerates with listed entities on the Jakarta, Kuala Lumpur and Singapore Stock Exchanges.
Rainforest Action Network (RAN) is working with Indonesian NGOs TuK-Indonesia, Jikalahari, Walhi and Dutch financial consultancy Profundo to analyse the financiers behind the companies implicated in the 2019 fires and haze crisis. The findings were released on forestandfinance.org and are part of a broader analysis of the financiers behind illegal and unsustainable forest-risk/plantation companies operating in Indonesia.
According to forestandfinance.org, the names of the companies implicated in the fires include Austindo, Batu Kawan, DSN, Cargill, Ganda, IOI group, Musim Mas, Provident Agro, Rajawali, Royal Golden Eagle, Salim, Sampoerna, Sinar Mas, Sime Darby and Tianjin Julong.
Financial data from forestandfinance.org shows that between January 2015 and August 2019, these 17 groups’ palm oil, pulp & paper, timber, and rubber divisions received at least US$19.2 billion (SG$26.09 billion) in corporate loans and underwriting facilities, though RAN notes that this is a conservative estimate as the methodology does not capture all financing due to lack of transparency by financial sector.
RAN stressed that this amount of money illustrates the kind of leverage financial institutions could use to reform client operations, at a time where the Indonesian authorities are clearly struggling to prevent burning through enforcement and civil and/or criminal sanctions.

The data also revealed that, much like the haze itself, this is an international problem, with much of the finance coming from ASEAN and East Asian financial institutions. The report shows that banks from China represent the largest share of financing at US$5.8 billion (SG$7.88 billion), followed by Indonesia at US$4.5 billion (SG$6.12 billion), Malaysia at US$2.3 billion (SG$3.13 billion), Taiwan at US$1.5 billion (SG$.04 billion), Singapore at US$1.4 billion (SG$1.9 billion) and Japan at US$1.0 billion (SG$1.36 billion). Together these countries accounted for 86% of finance to fire-linked groups. On top of that, around 2% came from United States banks and 6% from European Union banks.
In Singapore, the haze has become a major issue with prevailing winds from Sumatra blowing the haze to the island, causing widespread public health concerns due to the abysmal air quality. RAN highlighted that many of the groups implicated in the fires – and the tycoon families that control them – have enormous assets in Singapore or have listed companies on the SGX stock exchange. This includes Sinar Mas, Salim, Royal Golden Eagle, Sampoerna and Genting, as identified by the report.

Singapore bank links to companies implicated in Indonesia fires

In 2014, the Singapore Parliament passed the Transboundary Haze Pollution Act which imposes civil and criminal liability on companies domiciled or operating overseas but which cause or contribute to haze pollution in Singapore. While the government has repeatedly threatened to use the act against errant companies, it has not yet brought any such prosecutions or civil suits, emphasised RAN.

Source: forestandfinance.org
Of the Singapore banks, OCBC (SGX:039) is the fifth largest overall financier of the 17 groups linked to the 2019 fires, providing US$960 million (SG$1.3 billion) in finance, says the report. Nearly of all that was for palm oil operations of Sinar Mas, Austindo Group, DSN Group and Sampoerna Group. On top of that, DBS (SGX:MU7) – whose largest shareholder is Temasek Holdings – provided SG$281 million to palm oil groups Harita Group, LG International and Rajawali Group.
In 2017, The Association of Banks in Singapore (ABS) requires all members to manage haze and fire risks using ‘Haze Diagnostic Toolkit’ which sets out indicators of best practice. However, the strong links between Singapore financiers and fire-implicated companies has RAN calling into question the effectiveness of this approach, which they described as a substitute for actual regulation, with sanction, of banks whose lending has proven to be negligent when it comes to haze prevention.

For just US$7.50 a month, sign up as a subscriber on The Online Citizen Asia (and enjoy ads-free experience on our site) to support our mission to transform TOC into an alternative mainstream press.

Related Posts

AFP

6.0-magnitude quake rocks southern Philippines: USGS

01/02/2023
Myanmar streets empty in protest on coup anniversary
AFP

Myanmar streets empty in protest on coup anniversary

01/02/2023
MOM says labour market for 2022 improved, but many occupations see decrease in real income
Labour

MOM says labour market for 2022 improved, but many occupations see decrease in real income

01/02/2023
Sengkang Town Council is now directly-managed without a Managing Agent
Politics

Sengkang Town Council is now directly-managed without a Managing Agent

01/02/2023
高庭驳回迪哥达索取警方录供的刑事动议
Court Cases

CEO of D1 Racing sues a woman to claim S$3 million for “emotional trauma” suffered from being friend-zoned

01/02/2023
Thai police chief apologises for Taiwanese celebrity’s alleged extortion case by police officers
Thailand

Thai police chief apologises for Taiwanese celebrity’s alleged extortion case by police officers

01/02/2023
Subscribe
Connect withD
Login
I allow to create an account
When you login first time using a Social Login button, we collect your account public profile information shared by Social Login provider, based on your privacy settings. We also get your email address to automatically create an account for you in our website. Once your account is created, you'll be logged-in to this account.
DisagreeAgree
Notify of
Connect withD
I allow to create an account
When you login first time using a Social Login button, we collect your account public profile information shared by Social Login provider, based on your privacy settings. We also get your email address to automatically create an account for you in our website. Once your account is created, you'll be logged-in to this account.
DisagreeAgree
0 Comments
Inline Feedbacks
View all comments

Latest posts

6.0-magnitude quake rocks southern Philippines: USGS

01/02/2023
Myanmar streets empty in protest on coup anniversary

Myanmar streets empty in protest on coup anniversary

01/02/2023
MOM says labour market for 2022 improved, but many occupations see decrease in real income

MOM says labour market for 2022 improved, but many occupations see decrease in real income

01/02/2023
Sengkang Town Council is now directly-managed without a Managing Agent

Sengkang Town Council is now directly-managed without a Managing Agent

01/02/2023
高庭驳回迪哥达索取警方录供的刑事动议

CEO of D1 Racing sues a woman to claim S$3 million for “emotional trauma” suffered from being friend-zoned

01/02/2023
Thai police chief apologises for Taiwanese celebrity’s alleged extortion case by police officers

Thai police chief apologises for Taiwanese celebrity’s alleged extortion case by police officers

01/02/2023
Myanmar town pleads for help as thousands flee fighting

SAC-M calls for a step-up on support for Myanmar’s democratic movement

01/02/2023
Tourism arrivals and tourism receipts to remain weak in 2021 despite development of vaccines: STB

SG scores 5th as least corrupt country but its ranking dropping – illicit financial flows through SG

01/02/2023

Trending posts

Former Singaporean shares change of life in Australia with annual pay of S$80,000 as a plumber

Former Singaporean shares change of life in Australia with annual pay of S$80,000 as a plumber

by Yee Loon
30/01/2023
19

...

Two Indian nationals paid about S$330 and S$730 respectively for forged certificates submitted in their S-Pass application

MOM found issuing EPs meant for foreign PMETs to PRC waitress and general worker

by Correspondent
26/01/2023
41

...

Earning only S$400 a month, delivery-rider turned hawker threw in the towel after two years of running a rojak stall

Earning only S$400 a month, delivery-rider turned hawker threw in the towel after two years of running a rojak stall

by Yee Loon
26/01/2023
24

...

Indian rupee falls 60% since signing of CECA while Singapore becomes top investor in India

by Correspondent
25/01/2023
68

...

Temasek and GIC reportedly in talks with Adani Group accused of “brazen” market manipulation and accounting fraud

Temasek and GIC reportedly in talks with Adani Group accused of “brazen” market manipulation and accounting fraud

by The Online Citizen
26/01/2023
58

...

Ho Ching breaks silence over Temasek’s write down of its US$275 million investment in FTX, says it “can afford to be contrarian”

US regulator questions VCs’ due diligence work prior to investing in FTX; Ho Ching says Temasek can afford to be contrarian

by The Online Citizen
24/01/2023
28

...

December 2019
M T W T F S S
 1
2345678
9101112131415
16171819202122
23242526272829
3031  
« Nov   Jan »

The Online Citizen is a regional online publication based in Taiwan and formerly Singapore’s longest-running independent online media platform.

Navigation

  • Editorial
  • Commentaries
  • Opinion
  • Politics
  • Community

Support

  • Contact Us
  • Letter submission
  • Membership subscription

Follow Us

  • Facebook
  • Twitter
  • YouTube
  • Instagram
  • Fact Checking Policy
  • Privacy Policy

© 2022 - 2023 The Online Citizen Asia

No Result
View All Result
  • Opinion
    • Editorial
    • Commentaries
    • Comments
  • Current Affairs
    • Malaysia
    • Indonesia
    • China
    • ASEAN
    • Asia
    • International
  • Finance
    • Economics
    • Labour
    • Property
    • Business
  • Community
    • Civil Society
    • Arts & Culture
    • Consumer Watch
    • NGO
  • Politics
    • Parliament
    • Transport
    • Education
    • Environment
    • Health
    • Housing
  • Law & Order
    • Legislation
    • Court Cases
  • Lifestyle
    • Travel
  • Subscribers login

© 2022 - 2023 The Online Citizen Asia

wpDiscuz