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Former governor Arnold Schwarzenegger will be at the United Nations Climate Summit, COP20, in Lima, Peru on December 10 as part of World Climate Limited, a consortium of businesses, financiers, philanthropists and governments taking action on climate. But while the former movie-star-turned-governor-turned-climate-action-hero grandstands on climate, behind the scenes, Mr. Schwarzenegger is profiting from environmental destruction through his million dollar investment and five-percent ownership stake in Dimensional Fund Advisors, a U.S. fund manager with close to a billion dollars in some of the most destructive palm oil, pulp and timber companies in the world.
Dimensional Fund Advisors, has significant shareholdings in some of the most environmentally destructive companies in the world, including tropical logging companies and the world’s largest palm oil growers and traders. Here’s how the financial gears of forest destruction work:
Institutional investors account for about 6 percent of the financing for palm oil in Southeast Asia, and DFA is among the largest palm oil shareholders in the US, with at least $775 million spread across 80 palm oil companies. This is not, of course, DFA’s money — as one of the world’s biggest investment firms, DFA manages hundreds of billions of dollars for clients worldwide, including Pepsi, Kellogg’s and Boeing; the J. Paul Getty Trust; many public investors, such as the California Public Employees’ Retirement System and the cities of Seattle, San Diego, San Francisco, and Kalamazoo; and numerous universities and labor unions.
So, what is all this money financing? Among the companies the DFA holds are:
– Sime Darby (DFA held U.S. $27.4 million in shares as of April, 2014), a company under fire in Liberia for 760,000 acres of land concessions that violate several Liberian laws and human rights principles ratified by the Liberian government. Communities in the region allege that the Sime Darby’s destruction of their farmlands by the company in order to plant palm oil “is leaving them destitute.”
– Ta Ann (U.S. $4.15 million in shares as of April 2014), a Malaysian timber and forest resource company that was blacklisted by the Norwegian Government Pension Fund “due to an unacceptable risk of the company being responsible for severe environmental damage.” The Norwegian fund also found in December 2012, that Ta Ann was in the process of clearcutting at least 250,000 acres of tropical forest in Sarawak, and determined that “there can be no doubt that [this destruction] will have serious, irreversible consequences for biodiversity and the ecosystem services delivered by the forest.”
– Wah Seong Corporation (U.S. $2.30 million in shares as of April 2014), from Malaysia owns 51 percent of Atama Plantation, which is developing the largest oil palm plantation in the Congo Basin, in an area of pristine forest populated by endangered species including chimpanzees and gorillas in the Republic of Congo. Officials have found numerous breaches of regulations including altered records and illegal forest clearing.
– Kuala Lumpur Kepong (U.S. $12.26 million in shares as of April 2014) has a 750,000 acre land bank in Malaysia and Indonesia and has recently made acquisitions in Papua New Guinea and Liberia, where its operations face strong community opposition. Investigations on two KLK plantations in East Kalimantan revealed horrific working and living conditions, gross violations of basic labor rights, use of child labor, and conditions amounting to modern day slavery. The allegations were featured in Bloomberg Businessweek article, “Indonesia’s Palm Oil Industry Rife with Human-Rights Abuses,” which documented modern day slavery and extreme abuse of workers on KLK’s PT 198.
We don’t want billions in public and private money financing these companies, and we suspect you don’t either. By getting Arnold to take action, we can get #DFAoutofpalmoil. So, on December 10, join us on Twitter to #tellarnoldgohome.
Find our social media toolkit here.