It happened through their investment in Indonesian banks that financed palm oil companies allegedly responsible for the cases.

The report revealed that several large banks and pension funds — including the Norwegian Government Pension Fund Global (GPFG), Nordea and the Swedish AP-fonderna — owned shares in six of the largest banks in Southeast Asian –including Bank Central Asia (BCA), Bank Mandiri, Bank Negara Indonesia (BNI) and Bank Rakyat Indonesia (BRI) — that support palm oil firms. The GPFG alone contributed US$1.3 billion to the banks.

The report also found that Indonesian banks had failed to take necessary measures to mitigate and prevent social and environmental impacts. None of them required palm oil companies they funded to avoid human rights violations, rainforest destruction and greenhouse gas emission before approving their credit applications.

None has safeguard policies and procedures to force customers and debtors to respect environmental and human rights. The message from the report is clear that Nordic banks should push their Indonesian counterparts to better respect the environment and human rights.

Following the report, concern over the banks’ liability for human rights violations and rainforest destruction by palm oil companies is rising. But the question is not only whether national banks are liable but also how to push financial institutions to develop adequate policies and mechanisms that ensure that similar cases do not recur.

There is sufficient evidence that several large palm oil companies were involved in the crime.

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