Victory: Deutsche Bank divests from Bumitama after civil society pressure
Our partners at Friends of the Earth Europe announced yesterday that Deutsche Bank has sold its shares in the Indonesian palm oil supplier Bumitama, an important supplier to palm oil giant Wilmar International. Friends of the Earth U.S. works closely with Friends of the Earth Europe to pressure financiers to make problematic palm oil companies clean up their act, and this news from Europe signals a major victory in our efforts.
Last November we produced a report on Bumitama’s abuses. Despite numerous promises to clean up its act, the palm oil supplier continues to produce illegal palm oil, as we’ve documented in a recent brief, Bumitama’s diary of destruction.
Bumitama supplies palm oil to one of the largest global traders in palm oil, Wilmar International, and received financial support from well-known European banks including HSBC, Deutsche Bank and Rabobank, as well as numerous U.S. financiers. Deutsche Bank’s announcement was made during its Annual General Meeting on Thursday, May 22, after the German NGO Rettet den Regenwald (Rainforest Rescue) presented 87,900 signatures from German citizens calling on Deutsche Bank to divest from Bumitama.
Rettet den Regenwald spokesperson Mathias Rittgerott, who presented the signatures to Anshu Jain and Juergen Fitschen, the CEOs of Deutsche Bank, commented, “It is high time that a financial institution like Deutsche Bank listens to the voices of both its customers and German citizens. We do not support palm oil production, and we do not want Deutsche Bank to give any support to destructive palm oil companies.”
Friends of the Earth Europe and Walhi-Friends of the Earth Indonesia have led campaigns against Deutsche Bank’s investments since October 2013. On its website, Deutsche Bank says, “Deutsche Bank´s holdings of Bumitama Agri Group were … reduced close to zero. The responsible investment managers in the respective business units are aware of the issues in respect of Bumitama Agri Group…and their findings will of course influence any investment decision.”
Anton P. Widjaya, director of Walhi-Friends of the Earth West Kalimantan, said, “Deutsche Bank’s divestment from Bumitama is a good start towards cleaning up the mess of Bumitama and this step must be followed by other banks and investors who wish to invest responsibly.”
Friends of the Earth Europe presented participants at the Deutsche Bank shareholder meeting in Frankfurt with numerous cases of land-grabbing by Wilmar in Africa and Indonesia, including cases by Bumitama. Mr. Fitschen responded that Deutsche Bank is in dialogue with Wilmar but is not ready to divest from palm oil companies in general because there is as of yet no alternative to palm oil.
Anne van Schaik, sustainability campaigner at Friends of the Earth Europe said, “Deutsche Bank has taken a positive first step. Now it must continue along this path by divesting from Wilmar, who despite promises to improve its behavior, have not solved its problems in the countries where they operate. The palm oil sector has so many cases of land grabbing, deforestation and environmental degradation that there is no excuse for responsible financiers to invest in it.”
American and European financiers hold $505 million USD worth of shares in Wilmar, and have $1.5 billion USD in loans outstanding to Wilmar. U.S. financiers that continue to finance or hold shares in Bumitama include Van Eck Associates ($186.02 million USD), Blackrock ($99.56 million USD), JP Morgan Chase ($43.16 million USD), Dimensional Fund Advisors ($18.60 million USD), CalPERS ($20 million USD, TIAA-CREF ($11.62 million USD) and Bank of America ($110 million USD).
Above photo: Deforestation for palm oil, Indonesia. Photo credit: Anouk van Baalen