GLOBAL FINANCE ENABLING DESTRUCTION OF PAPUA NEW GUINEA RAIN FORESTS

A new investigation from anti-corruption NGO Global Witness has uncovered how global financial institutions – including the likes of Blackrock and the Norway Government Pension Fund – are backing Malaysian banks linked to a hugely destructive logging project in Papua New Guinea, that are likely to be illegal. 

• This has not only destroyed swathes of highly biodiverse climate-critical forest, but is linked to exploitation of local communities and alleged human rights abuses.
• The NGO uncovers how Chinese companies buying timber from Maxland could be subject to stronger restrictions under revisions to China’s Forest Law. 
• Findings also expose how the activities of the company at the centre of these claims – Maxland – is aided and abetted are enabled by a complex global web of companies. 

Located in the south-western Pacific Ocean, north of Australia, Papua New Guinea contains some of the world’s most climate-critical rainforests, and is one of the planet’s largest and most vital biodiversity hotspots. 

The International Union for Conservation of Nature, a global authority on the natural world, considers the island to contain two key biodiversity areas. Its endemic species—those found nowhere else on earth – include a brilliant green tree snail used to make jewelry and the Manus chauka, a friarbird that adorns the provincial flag. Manus’ biodiversity includes the Admiralty cuscus, unique to the archipelago and the Manus masked owl. From the air, the forests that shelter these animals look almost unscathed. However, close up, the red of logging roads carves up the green.

Despite the urgent need to preserve biodiversity and forests in the fight against climate breakdown, Papua New Guinea continues to see catastrophic levels of deforestation, which carries a huge impact on local communities too. 

The new Global Witness investigation exposes how a Malaysian company, Maxland, is using a seemingly fraudulent rubber plantation on Manus Island in Papua New Guinea apparently as a front for illegal logging. 

The investigation found Maxland is not only destroying thousands of climate-critical trees for profit – but also failing to honour promises of a new road and rubber plantation, in return for access to the forests in the first place. 

Even more worrying are villager concerns about the project and apparent human rights abuses as a result of Maxland’s activities – in one case with a protest against the logging allegedly leading to a violent beating of a protestor. 

The money trail that funds Maxland’s operations also reaches across the world, via Malaysian banks that lead back to investment bank Blackrock, Norway’s Government Pension Fund, the Vanguard Group, Inc., J.P. Morgan Asset Management (Singapore) Limited, T. Rowe Price Associates, Inc., Dimensional Fund Advisors of Texas and the California Public Employees’ Retirement System (CalPERS).

Maxland has a mother company with a track record of destroying forests with bogus promises of development. Against this backdrop, the NGO is calling for stronger regulation to stop the flow of financing of projects like these. 

A damaging lack of regulation, coupled with little effort from the actors involved to undertake due diligence on the environmental impacts of their financing, means that protections of forests, communities and biodiversity have been immensely weakened. 

Lela Stanley, Global Witness

Additional concerns have been raised about Maxland’s owner – international businessman Thomas Hah. The report reveals how his shadowy web of business interests encompasses firearms and cryptocurrency, spreading out from China and Hong Kong to secrecy jurisdictions such as the Cayman Islands – and now apparently illegal logging in Papua New Guinea. 

Global Witness can now reveal that Maxland is controlled by the Joinland Group, a conglomerate with interests ranging from firearms to cold storage to agriculture and forestry.

“Financiers and companies can take responsibility, and apply more robust checks on their supply chains and financing, to stop players like Maxland and Thomas Hah getting the upper hand over our planet and its people,” Stanley added.  

Global Witness recommends that China should clarify that the revised Forest Law applies to timber imports and ensure that it is effective in tackling the imports of illegal timber from countries like PNG. And The PNG government should immediately place a moratorium on issuing all new logging and forest clearance permits.

The report from Global Witness can be accessed here