FOE welcomes Norges Bank’s divestment from Astra International

Friends of the Earth groups welcome Norges Bank’s exclusion of Jardine Matheson, Astra International over environmental and biodiversity impacts

Divestment is latest signal that financiers are prepared to cut ties with palm oil giant Astra Agro Lestari and its parent companies

WASHINGTON – Friends of the Earth groups welcome Norges Bank’s announcement last week that it has excluded Jardine Matheson Holdings, Jardine Cycle & Carriage, and Astra International from the Norwegian Government Pension Fund Global (GPFG) due to negative environmental and biodiversity impacts related to the Martabe Gold Mine in Sumatra, Indonesia, and threats to the critically endangered Tapanuli orangutan and other endangered species. At the end of 2022, the GPFG owned $236 million of shares in the three companies.

Jardine Matheson and Astra International are parent companies of Astra Agro Lestari (AAL) – Indonesia’s second largest palm oil company – which has been subject to international scrutiny from financiers, consumer goods companies, and international civil society due to environmental and human rights violations linked to its subsidiaries’ operations in Sulawesi, Indonesia. These harms include land grabbing, environmental degradation, and criminalization of environmental and human rights defenders. 

“We welcome the decision to stop financing environmentally destructive operations in the Batang Toru ecosystem, which is home to several critically endangered species,” said Uli Arta Siagian, Forest and Plantation Campaign Manager at WALHI National. “The concession for the Martabe mine overlaps with protected forest areas, five important watersheds that provide water for 100,000 people, and critical wildlife habitat for Sumatran tigers and pangolins. Creditors and investors must stop providing financing to companies that threaten our forests, communities, and biodiversity.” 

In its recommendation for exclusion, the Norwegian Council of Ethics references ongoing conflicts between communities and AAL, allegations of environmental and human rights abuses, and decisions by several consumer goods companies to suspend sourcing from AAL and its subsidiaries. To date, 29 financiers have excluded Jardine Matheson and/or its subsidiaries from financing due to climate and environmental concerns according to the Financial Exclusions Tracker. Notably, GPFG divested from AAL in 2011.

“Banks and investors should follow suit and suspend financing to AAL, Astra International, and Jardine Matheson until land that was taken without consent is returned to communities,” said Danielle van Oijen, Forest Program Coordinator at Milieudefensie (Friends of the Earth Netherlands). Accountability requires stopping the flow of money to companies that enable environmental and human abuses. Financiers should adopt agribusiness exclusion policies that cut off financing to destructive companies as part of their climate plans.”

Jardine Matheson (LSEG:JARB, SGX:J36, BSX:JMHBD) is a British conglomerate headquartered in Hong Kong and incorporated in Bermuda. Jardine Matheson is exposed to AAL’s palm oil operations in Indonesia through its 75%-owned subsidiary, Jardine Cycle & Carriage (SGX:C07), which holds 50.1% of shares in Astra International (IDX:AALI), which in turn owns nearly 80% of shares in AAL.

“Jardine Matheson should read the writing on the wall and understand the serious financial and reputational risks posed by AAL’s conflict palm oil,” said Gaurav Madan, Senior Forest and Land Rights Campaigner at Friends of the Earth US. “The dominant model of industrial agriculture is responsible for widespread deforestation, human rights abuses, and climate chaos. Increased regulation is required to catalyze a just transition away from monoculture plantations toward community forestry and agroecology.”

Norges Bank’s exclusion of Jardine Matheson and Astra International comes at a time of increasing pressure on AAL and its parent companies. To date, ten consumer goods companies have suspended sourcing from AAL in some capacity due to environmental and human rights violations in Sulawesi.

Communications contacts:
Brittany Miller, Friends of the Earth U.S., [email protected], +1 202 222-0746
Uli Arta Siagian, WALHI, [email protected], +628 2182 61 9212

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