Note: Is Westpac funding illegal logging in Solomon Islands?

You don’t have to travel far in Solomon Islands to see environmental damage caused by logging. The country’s forests are being felled unsustainably. Worse, in classic resource curse fashion, logging profits have fed political corruption and have bypassed most Solomon Islanders.

This may seem a domestic issue, stemming from poor governance, but foreign businesses play a major role in financing and undertaking logging in the Solomons. Many of these businesses come from South East Asia, but if allegations made in two recent Sydney Morning Herald articles are correct Australia’s Westpac Bank is also involved:

[Westpac] has provided loans to companies in the Solomon Islands linked to illegal tree felling threatening rare cloud forest, suspected hiring of illegal workers, trespass and causing environmental and social problems including violence…The Herald had found direct loans and long business relationships between at least five of the country’s major logging interests and the bank.

To be fair to Westpac, it is reducing the proportion of its Solomons loans going to logging, but given the logging industry’s well known adverse impact there, the question needs to be asked: why is Westpac lending any money at all to Solomons logging interests?

Terence Wood is a PhD student at ANU. Prior to commencing study he worked for the New Zealand government aid programme.

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Terence Wood

Terence Wood is a research fellow at the Development Policy Centre. His research focuses on political governance in Western Melanesia, and Australian and New Zealand aid.

3 Comments

  • Sorry second to the last paragraph: Lessons must be learned from the effects of logging and government must come up with solutions to these problems and where suitable and appropriate apply them to the emerging industries

  • I believe the logging industry in Solomon Islands is in its phasing out period with no more new logging companies and this can be seen through its declining contribution towards the country’s GDP. As logging a major contributing factor to Solomon Islands Growth declines, the country is expecting the minerals and agriculture and fishing industries to pick up and replace the lost benefits from the declining logging activities. This is good really good but what is the difference between logging and mining? logging and agriculture? logging and large scale fishing? all these industries are economically characterized as primary industries mostly dealing with the extraction of natural resources.

    Hence they all entail environmental degradation, conflict among rural people (who is the rightful landowner), involves huge sum of money – source of corruption, disruption of marine life – harmful fishing practices, clearing of large portions of land for agriculture which in turns causes soil erosion, and so forth u name the rest.

    But yet we need these industries in order for our economy to grow what is the solution here?

    I believe the government really needs to start reviewing the logging sector and identify problems associated with it in terms of landowners, distribution of wealth, percentage of shares, environmental problems, both terrestrial and along the coastlines. Assess all the negative impacts of logging and try to learn from them and apply them to the upcoming industries such as mines and energy, agriculture maybe tourism and so forth so that when these emerging industries head the economy of the country we will not be faced with similar problems as we have in the logging.

    After all they all primary industries extracting natural resources of the country from the people and within customary land.

  • My elder brother broke cartiledge on my neck because he wanted to log our tribal land and I did not agree in a fight. Stop all banking transactions. Logging in Solomon Islands is worse than the ethnic tension.

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