Religious campaigners (but not C of E) sign letter to Chancellor over RBS

By staff writers
November 30, 2009

Forty leading figures, representing faith groups and church leaders, environmental and anti-poverty campaigners, trade unions, academics, MPs, the author Iain Banks and Body Shop co-founder Gordon Roddick have written to Alistair Darling to call on him to transform RBS (Royal Bank of Scotland) into a Royal Bank of Sustainability.

The Church of England was not represented amongst the signatories to the letter. But Church of Scotland convenor, the Rev Ian Galloway and Miles Litvinoff of the Ecumenical Council for Corporate Responsibility, were among the public figures who accused Westminster of “writing a blank cheque with taxpayers’ money” to fund “destructive” projects round the world, contributing to human rights abuses and climate change.

The Church of England also has a separate £8.5 million investment in the company, which appears to conflict with its commitment to challenge climate change and eradicate human rights abuses.

A year ago, the British public became the majority shareholder in the Royal Bank of Scotland after the Government bailed the bank out.

The group have asked the Treasury to ensure that RBS and other publicly-backed banks help pay for Britain's transition from a high-carbon economy with rising unemployment to a low carbon-society that provides millions of green jobs and better public services.

In the strongly worded letter, the group accused the Treasury of failing to stop taxpayers' money being used by RBS to finance climate change and human rights abuses that span the globe from Wales to India, to the Democratic Republic of Congo.

The World Development Movement, People & Planet and PLATFORM have commissioned a report that sets out the business case for transforming the bank into the Royal Bank of Sustainability.

The report argues that UKFI, the company set up to manage the government's shares in the bailed-out banks, should take an 'active ownership' approach to its investments with respect to environmental and social issues. This is consistent with best practice and legislation which has been developed over a number of years by institutional investors and the government.

The campaigners cite evidence from Bangladesh where a RBS subsidiary, ABN Amro Bank NV has a 4.75 per cent share of GCM Resources, the UK company pushing for an opencast mine in the country. There has been fervent local opposition as it would displace approximately 40,000 people and impact on access to clean water for approximately 100,000 people

Closer to home, RBS has taken part in loaning £115 million to Hargreaves Services, the coal operator. Hargreaves has plans to extract 7 million tonnes of coal by developing one of the largest opencast coal mines in the country at Tower Colliery, near the coal-mine-cum-protest-site Ffos-y-fran in Merthyr Tydfil, south Wales. This type of mining has been likened to a financial hit-and-run, bringing a few jobs for a couple of years but potentially leaving widespread asthma and other public health and environmental effects in the community for years to come.

The World Development Movement also drew attention to the activities of Vedanta mining in India, in which the Church of England also has a direct £2.5 milion stake. RBS was the lead financial adviser to Sterlite, which is 60 per cent owned by Vedanta, after a recent takeover bid. The bank and its ABN Amro subsidiary gave letters of credit worth $100m (£60m) to Sterlite, which is India's biggest copper producer. Vedanta has an appalling record on human rights, say campaigners.

Research from the Rainforest Action Network indicates that since Oct 13, 2008 - when HM Treasury announced its recapitalisation of the Royal Bank of Scotland Group - RBS has extended at least $2.7 billion in debt/equity issuance underwritings to companies that own or are actively involved in building tar sands extraction infrastructure and tar sands oil pipelines in Alberta, Canada.

In March 2009, RBS was also part of a consortium of 14 banks that lent $1,890 million to the Irish company Tullow Oil - providing in the region of $100 million itself. The bank had already helped to raise £402 million by placing shares for Tullow in January 2009. In early 2009, the company announced a major discovery of 400-1000 million barrels by Lake Albert in Uganda, just on the border with the Democratic Republic of Congo (DRC). Tullow also holds oil exploration rights across the border in North Kivu in the DRC, which continues to be torn by strife after more than a decade of resource-driven civil war. The border area has seen some of the fiercest fighting take place as rival armies and militias have struggled for control. An additional 30,000 refugees were displaced in North Kivu during two weeks of fighting in March, adding to the existing 1.4 million internally displaced people in the region.

Julian Oram, head of policy at the World Development Movement said: "This catalogue of harmful bank investments paid for by the UK taxpayer puts the government to shame. Public money pumped into RBS and other bailed-out banks over the last year is paying for some of the most damaging mining and fossil fuel projects around the world. These projects will have untold consequences for some of the world's poorest people, while failing to deliver any long-term benefit to the British taxpayer."

Ian Leggett, director of People & Planet said: "RBS could be a global leader in low carbon financing. But to build that business, two things need to happen. First, social and environmental criteria have to be a key part of RBS's investment decisions. Second, RBS needs to stop funding unconventional and controversial fossil projects immediately."

Kevin Smith, climate and finance campaigner at PLATORM said: "The UK government claims to a 'world leader' on climate change, but it is allowing public money to be used to finance companies that are carrying out climate-trashing projects around the world. We should be using RBS as a public institution to finance renewables, infrastructure and green jobs rather than bankrolling coal, oil and gas all over the world."

The Church of England has come in for sustained criticism for not investing its £5 billion assets in a greener manner. At a time when others are investing in 'green' funds, the Church’s two biggest shareholdings, having a combined value of £200 million, are both in oil companies. It also invests heavily in a number of mining companies causing environmental devastation which has been highlighted by campaigners both inside and outside the Church.

During the last decade, the Church's other major investment decisions have involved pulling out of social housing in favour of several large out-of- town retail parks. Green campaigners have suggested that these encourage people to make longer car journeys, thus increasing carbon emissions.

Read Ekklesia's report on the C of E's investments "Where is the Church of England's Heart Invested?" here

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