Singapore Bank accused of funding Borneo rainforest destruction

United Overseas Bank (UOB) agreed to lend USD 31.775 million to Malaysian oil palm company Radiant Lagoon

(SINGAPORE) A major Singapore bank is facing allegations of funding the destruction of tropical rainforests in Sarawak, a state in Malaysian Borneo.

According to official records, the Malaysian branch of Singapore-headquartered United Overseas Bank agreed to lend up to USD 31.775 million to Radiant Lagoon, an oil palm plantation firm currently involved in a major controversy with indigenous Penan and Berawan communities over the destruction of tropical forests in Sarawak’s Mulu region.

The charges are guaranteed by two lots of land comprising 4400 hectares of tropical rainforests in the Tutoh and Apoh land district in the immediate vicinity of the UNESCO-protected Mulu National Park.

Two legal charges under the Sarawak land code were registered in Malayisan Ringgit with an amount of MYR 54.6 million (USD 13.4 million). Two further foreign currency charges were registered over the same lands with a principal sum of USD 18.375 million. All charges were registered in mid-October 2018, only weeks before Radiant Lagoon started logging the Mulu rainforest.

Last month, Penan and Berawan communities staged blockades to protest the destruction of their forests over which they claim Native Customary Rights. The communities had not been properly consulted by the Sarawak state government nor by Radiant Lagoon before their forest lands were given away for logging.

Malaysian Minister "very concerned"

The events led Malaysian Primary Industries Minister Teresa Kok issue a statement that she was “very concerned“ on the issue and that her ministry would ne presenting a paper “on “stopping the oil palm expansion“ in an upcoming meeting with state leaders.

"As land is a state matter, I am counting on the [Sarawak] state government to take the appropriate measures to resolve the matter in the interest of the state, the indigenous people and our national sustainability agenda," she said.

The Bruno Manser Fonds calls on UOB to immediately withdraw all loans granted to Radiant Lagoon. “It is shameful for a Singapore bank to fund the destruction of one oft he world’s most biodiverse habitats“, the Swiss NGO said in a statement.

Mulu National Park is one of Sarawak’s major tourist attractions and has been recognized in 2000 as a UNESCO World Heritage Site for its immense biodiversity.