Japanese Bank's Involvement in Environmental Destructions

Thursday, January 1, 2015

Japan - Table 1 below shows the name, country of origin, investing companies, and summary of negative impacts of five development projects that environmental NGOs and researchers have pointed out contain environment violations.

Table 1: Five Cases Overview

Project Name

(Country)

Investing Companies

Summary of Environment Issues

New South Wales’ Deforestation (Australia)

Nippon Paper, ITOCHU

Deforestation, woodchip production, and export have happened in the High Conservation Value area (where includes endangered species such as Ninox strenua, sooty owl, swift parrot, tiger car, etc., koala, and wombat).

Tasmania’s Deforestation (Australia)

Mitsui & Co., LTD., Sumitomo Corporation

Deforestation, woodchip production, and export have happened in the High Conservation Value area (where includes endangered species such as Tasmanian Devil, epidemic species, or native bush).

Llurimagua Project (Ecuador)

Codelco

Sewage water (including drugs used for experimental drilling and heavy metal of lands) has caused negative impacts on health of local people and their livestock. In addition, native bush of HSV will be deforested.

Nam Ngiep 1 Hydropower Project (Laos)

Kansai Electric Power Company

7,600ha of land and forest around Nam Ngiep river have submerged. Such ecological rapid change has caused negative impacts on biodiversity (e.g. endangered species such as Northern white-cheeked gibbon and rare species such as Giant barb).

Lynas Rare Earth Plant (Malaysia)

Lynas, Sojitz

The rare earth plant began its operation without a sufficient countermeasure against runoff of tailings dam that holds waste products including radioactive materials. Now it has been a year and the soil analysis result implies that land pollution such as including thorium and uranium has happened in the plant area.

 

Table 2 below shows seven Japanese banks’ amounts of loans and investment in eight companies that invest in the projects listed in Table 1.

Table 2: Japanese Private Financial Institutions’ investment amount list

 

Loan

Issuance

Shareholding

Bondholding

Mitsubishi UFJ FG

12,360

1,763

1,305

 

Mizuho FG

14,141

1,499

1,040

25

Sumitomo Mitsui FG

10,196

834

233

 

Resona HD

67

 

 

 

Sumitomo Mitsui Trust HD

1,402

 

691

1

Japan Post Bank

132

 

 

 

Norinchukin Bank

3,105

 

1

 

Total

41,403

4,096

3,270

26

Unit: 100 million Yen

According to our research, Mitsubishi UFJ FG, Mizuho FG and Sumitomo Mitsui FG have not implemented proper investments in terms of prevention of the “High Conservation Value (HCV)” area, prevention of negative impacts against animal species on the IUCN Red List of Threatened Species, and encouragement of making an environmental impact assessment. This is clear break between their own policy and its implementation. Regrding Resona HD and Sumitomo Mitsui Trust HD, they have not implemented proper investments as well while they have policy of encouragement of making an environmental impact assessment and of integrating criteria on nature into their procurement and operational policies, respectively. Finally, due to the fact that Japan Post Bank and Norinchukin Bank did not perform well enough in policy assessment level to receive a score whatsoever, they have no gap between poicy and its implementation.

READ THE FULL REPORT

 

Therefore we recommend each financial institution establish or enhance policies on environmental consideration, due diligences, divestment, and engagements with the companies they invest in. In particular, Japan Post Bank and Norinchukin Bank should establish their policies and disclose them.

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