Research and advocacy organisations Act Now! and Jubilee Australia Research Centre have welcomed news that Papua New Guinea's largest bank has closed the accounts of 30 logging companies operating in the country.
A report, Logging high risk industry (The National, 8 April 2022) outlined concerns by the PNG Forest Industry Association, a group representing commercial logging interests, that Bank of South Pacific (BSP) has closed the logging company bank accounts due to its anti-money laundering best practices.
Eddie Tanago, Campaign Manager at Act Now! commented: “We welcome any move by banks in PNG to restrict financing to the logging sector, which has been identified by the Bank of PNG as a high-risk sector for money laundering.”
A December 2021 report by Act Now! and Jubilee Australia, The Money Behind the Chainsaws, detailed how PNG’s commercial banks have provided at least $144 million (K300 million) in available credit to the country’s five largest exporters of tropical logs since 2000. The report highlighted evidence of illegal activity and human rights abuses in the sector and called on all commercial banks in PNG to commit to ending all financing to companies involved in tropical forest logging.
“Over the past decades, Act Now! and its partners have detailed numerous examples of illegal activity in the sector which have led to the theft of vital forest resources from customary landowners. When banks provide services to logging companies, they help to prop up this destructive industry. No bank should be providing financial support to companies engaged in tropical forest logging”, said Mr Tanago.
The move by BSP to close the accounts of logging companies places the spotlight on PNG’s second largest bank, Kina Bank. Kina has yet to confirm if it is taking action to cut ties with its logging company customers or to rule out offering its services to new logging clients.
Act Now! and Jubilee's 2021 research identified that the remaining two commercial banks operating in PNG – Westpac and ANZ – had policies or practices that restricted their financing to the logging sector.
“We call on all banks to ensure that they do not bring on new customers involved in tropical forest logging, and take steps to close the accounts of existing customers in this sector”, said Eddie Tanago.