In the last eight years, two finance companies and one equipment retailer have provided financing to at least 15 companies that are logging in PNG’s rainforests, new research by Act Now! and Jubilee Australia reveals.
These loans are likely to have helped companies buy the bulldozers and trucks used to destroy millions of hectares of tropical rainforest. Over this time, multiple government reviews, court judgments and non-government reports have also raised red flags about widespread illegality in PNG’s logging sector.
Filings on PNG’s Personal Property Securities Registry (PPSR) show that two loan companies – Moni Plus and First Investment Finance – have provided financing for logging trucks, 4x4s and other equipment, as well as property mortgages in Port Moresby and East New Britain. The value of this financing is estimated at around 11 million kina.
PNG’s official Cat equipment distributor, Hastings Deering, has also done business with at least six companies involved in tropical rainforest logging. PPSR filings suggest they have provided equipment on credit to companies logging the forests of Central, Western and West New Britain Provinces.
Across the country, landowners are watching bulldozers destroy sacred sites and logging trucks cart off their forests. Often, they are reporting this is being done without their consent or without following the law. Companies who provide the equipment risk being complicit in illegal activity. It’s time for legitimate businesses to stop supporting this illegitimate industry.
Act Now! and Jubilee Australia are calling on lenders to stop financing forest logging and to develop strong, clear policies committing not to finance it in the future. They are also challenging lenders to report on their exposure to logging and offer compensation for communities whose forests they have helped destroy.
Act Now! and Jubilee Australia also call on Hastings Deering to make a public commitment to ensure its Cat machines and spare parts are not sold to companies who will use them to log PNG’s tropical rainforests.
Hastings Deering has trumpeted its commitment to sustainability, human rights and environmental responsibility. Providing equipment on credit to PNG’s notorious logging industry is the opposite of sustainable business.
In 2017, a Bank of PNG National Risk Assessment concluded that illegal logging poses a significant money laundering threat. The assessment argued that “there are strong indicators of large-scale corruption and illegal logging in the forestry sector in PNG, which result in high levels of proceeds of crime”, and that “it is widely accepted that the problem is widespread and the lost revenue is extensive”.
Lending companies’ exposure to the logging sector is a risk for them, their customers and PNG’s financial system. All lenders, whether they are banks, mortgage companies or vehicle lenders, need to comply with their duties and responsibilities under PNG’s anti-money laundering laws. We call on the regulator to ensure that all companies are doing due diligence to avoid financing illegal logging activity.
Read the full report: Lending to the Loggers